What a difference a year can make. In 1995 Vietnam was being hailed as Asia's next economic miracle. The economy was in its fourth year of steady 8%-to-9% annual growth. Economists were trumpeting the country's potential, and investors were pouring bil lions of dollars into small-scale manufacturing projects, oil exploration and even automobile plants. The Association of Southeast Asian Nations invited Vietnam to join its ranks, and Washington and Hanoi finally normalized relations, bringing Vietnamese exporters one step closer to the world's single biggest consumer market. At last Vietnam had arrived on the world stage, and its leaders were making ambitious plans to double per capita GDP, to $400, by the year 2000.

Now much of that heady optimism has gone flat. When they gather in Hanoi this weekend for the eighth Communist Party Congress, Vietnam's politicians, soldiers and bureaucrats will be fretting over their future, not celebrating it. Their main task is to install a new generation of party leaders to navigate the shoals between socialism and an open-market economy. Lightning progress has brought the country's Communist leadership face to face with contradictions for which it wasn't prepared: rising crime a nd corruption, a yawning gap between urban rich and rural poor, plus demands by foreign institutions and anxious investors to open further, faster. In the meantime, economists are increasingly nervous that Vietnam's growth could peter out in several years if Hanoi doesn't reform institutions and change trade and investment regulations. Says Bradley Babson, Vietnam representative for the World Bank: "They have entered a stage where deepening reform is going to require more complex political trade-offs ."

The real challenge for Hanoi is surrendering enough control to keep growth alive. The country's leadership seems to be in agreement that reform must proceed. Yet Hanoi's party chiefs are at the head of a culture in which secrecy and mistrust of outside rs has persisted since the early days of Ho Chi Minh's revolution after World War II. No longer confronting an obvious outside threat, many of them are still reminding one another that there must be an adversary out there somewhere. "Too many of thes e men have not adjusted to the real world," says a delegate to the congress. "They are still arguing over who are their friends and enemies."

The more the political race has deepened, the more confused are the signals out of Hanoi about the country's priorities. No sooner had Vietnam and the U.S. normalized relations last year than ideologues in the military and the party began circulating d ocuments charging that Washington's real aim was to bring Hanoi to its knees. At the same time, however, Prime Minister Vo Van Kiet issued a long memo insisting that the party needed to open even further and that Vietnam had to develop a system in which t he rule of law, not loyalty, prevailed. The ensuing debate between those two camps has intensified in recent months, largely in secret, leaving the hardiest Vietnamese bureaucrats uncertain about which policies they could push without being reprimanded. & quot;They have always had a collegial leadership, but that has broken down with generational change and new people moving up," says Carlyle Thayer, head of the School of Politics at Australia's National Defense Force Academy.

Since the beginning of the year, the confusion has created a public relations disaster for Hanoi. In February the government launched a campaign against "social evils," directed mainly at attacking vices such as prostitution, drugs and pornog raphy. But the most obvious manifestation of the campaign was a binge to obliterate all foreign-language signs and billboards, including corporate logos. Though officials denied any jingoist intent, the drive sent tremors through the foreign community. Vi etnam's opaque investment regulations and often corrupt bureaucracy make doing business there difficult at best, but the suggestion that Hanoi was now targeting the same foreigners it had been wooing so ardently a year earlier caused many companies to won der if they shouldn't just withhold further deals until the political scene quieted.

The sense of unease has built as the congress neared. This month Vietnam's embassies abroad were instructed not to issue tourist visas until the congress is over. Representatives of the country's principal aid donors, which have pledged more than $5 bi llion in assistance over the past four years, are complaining that their diplomatic shipments are being tampered with by customs officials. When foreign journalists began suggesting that there were leadership divisions between "reformers" and &q uot;conservatives," authorities warned privately that if they wrote too many "negative" stories, their visas could be revoked.

International aid workers feel especially beleaguered. They say they came to Vietnam to help, whether that meant modernizing the health-care system or starting credit programs for the rural poor, who constitute 80% of the country's 74 million people. W hile some of these organizations have flourished, many are being worn down by bureaucratic roadblocks and extortionist officials. This month, for example, the representative for Australia's Fred Hollows Foundation, which spends nearly $1 million a year in training and equipment for cataract surgery, was practically forced to leave the country because the foundation refused to give the Ministry of Public Health control over proceeds from lens sales intended for Vietnam's destitute.

Do such tales mean Vietnam has changed its mind about opening to the outside world? Probably not. Outsiders will not be reassured by politics as usual. "Vietnam's much vaunted unity and secrecy just don't work in an open economy," says Thayer . In the first quarter of this year, foreign direct investment declined 42% compared with the same period last year. Such trends could spell trouble in the long run. "The economy can keep growing at 8% for some years, even if nothing changes," s ays a top Vietnamese financial expert. "But if foreign investment and exports both level off, we could drift."

Hanoi cannot afford to lose its newly won support from the international community. The government has said it needs $42 billion in aid and investment to double per capita income in the next four years. That money would cover the cost of the massive in frastructure projects and sweeping social programs Vietnam desperately needs to support growth. Half of it is supposed to come from foreign investors and aid donors. Domestic investment and government bond issues are needed for the rest. But Vietnam's tra de deficit has ballooned to $2 billion, and the economy lumbers under an external debt of at least $8 billion, 54% of GDP. But measures such as privatizing state-owned companies and allowing businesses to function unhindered have been stonewalled by intra nsigent officials who fear losing their access to government subsidies and tax breaks.

Strong leadership could break the bureaucratic logjam. And once the congress is over, much of the tension that has blocked progress for the past year will recede, leaving the new generation of party faithful an opportunity to pick up where the reform p rocess stalled. Still, few Vietnamese expect the congress to yield dramatic results anytime soon. The latest prediction is that although the politburo will change dramatically, the ruling triumvirate--President, Prime Minister and party secretary--will no t because no consensus could be reached on their replacements. "The next year," says a congress delegate, "will be a period of uncertainty for us." The good news is that the bulk of Vietnam's leaders see clearly the need for change. Th e question is whether they can.