A parade with about 31,000 participants, including the Vietnam People’s Army, will be held in the morning of Oct. 10 at Ba Dinh Square, where Ho Chi Minh read the Declaration of Independence in 1945. Festivities will include fireworks displays at 29 venues in the city and the building of a 6,950- square-meter ceramic mural touted as the world’s largest.

“Hanoi is on its way to becoming a thoroughly modern city,” said Peter Ryder, who runs $2 billion of property developments as managing director of Indochina Capital and has lived in Hanoi since 1992. “But right now it is in an awkward place whereby a lot of forces of development, specifically construction, are taking place on a haphazard basis.”

For Hanoi’s 6.5 million residents, living standards have risen for the past two decades. That brought in foreign shops and brands including Germany’s Metro AG and France’s LVMH Moet Hennessy Louis Vuitton SA, as well as the urban headaches of traffic and construction. Vietnam’s capital will probably post the fastest average economic growth of any city globally between 2008 and 2025, PriceWaterhouseCoopers said in a November report.

After suffering rations and shortages during its attempt to follow strict Marxist economic policies during and after the war, Hanoi’s renaissance began with the ruling Communist Party’s shift toward a market-based economic system in 1986.

Incomes Surge

Vietnam’s per-capita income has jumped more than fivefold in the past 15 years to $1,068, according to the International Monetary Fund. In 1993, Vietnam was the world’s fifth-poorest country by per-capita income after Mozambique, Tanzania, Ethiopia and Sierra Leone, according to the World Bank. By 2009, it ranked ahead of 36 countries.

For now, Hanoi’s focus is on commemorating the year 1010, when Ly Thai To, the founder of the Ly Dynasty, abandoned Hoa-Lu, about 50 miles to the south, and moved the capital to a site along the banks of the Red River.

This shift marked the first time the city had been at the head of an independent Vietnamese entity no longer under the control of China, said Keith Weller Taylor, a professor of Vietnamese studies at Cornell University in Ithaca, New York.

Hanoi is Vietnam’s biggest metropolis after Ho Chi Minh City in the south, the financial hub. In the 1940s and 1950s, Hanoi was known mainly as the center of resistance to French rule. Forces led by Ho Chi Minh tussled for control of the city that they had named as the capital of a newly independent Vietnam, after Hue had claimed the seat of government in the 19th century.

American Bombings

In the following two decades, Hanoi became the focus of U.S. attempts to prop up the government of southern Vietnam, and was consequently bombed during the winter of 1972.

Vietnam’s economic renaissance has led to some high-profile projects in the city. In 2007, Keangnam Enterprises Ltd. began building what the South Korean company has said will be Vietnam’s tallest skyscraper. A $265 million convention center was built in the west of Hanoi, to host global summits such as Southeast Asian Nations meetings this year.

“Of course the government wants to take advantage of this anniversary as an opportunity to promote the country,” said Le Quoc Vinh, Hanoi-based chief executive of the Le Group, which operates magazines and a television channel. The number of foreign visitors to Vietnam has increased 34 percent this year through September, according to the government statistics office.

By Jason Folkmanis & Diep Ngoc Pham - Bloomberg - October 8, 2010