In this webinar, Ms Linh Nguyen and Dr Nguyen Khac Giang discussed the reasons behind Vietnam’s recent leadership changes and their implications for the country’s domestic and foreign policy. They also provided an initial assessment of potential further developments and the nation’s economic and political prospects in the lead-up to the 14th National Congress of the Communist Party of Vietnam (CPV), slated for early 2026.
VIETNAM STUDIESPROGRAMME WEBINAR
Tuesday, 18 April 2023 – ISEAS – Yusof Ishak Institute hosted a webinar on “Vietnam’s Leadership Reshuffle: Dynamics, Implications and Prospects”, presented by Ms Linh Nguyen, an Associate Director at Control Risks, and Dr Nguyen Khac Giang, a Visiting Fellow at the Vietnam Studies Programme of the ISEAS – Yusof Ishak Institute.
Ms Linh gave an overview of the recent leadership reshuffle, particularly the forced resignations of Deputy Prime Minister (DPM) Vu Duc Dam, DPM Pham Binh Minh, and President Nguyen Xuan Phuc. She suggested that these resignations were likely due to two major corruption scandals: the government-sponsored rescue flights scheme to repatriate Vietnamese citizens during the Covid-19 pandemic and the Viet A Covid-19 test kits scandal. Ms Linh further argued that the crackdown was also politically motivated, designed to eliminate potential threats to those seeking to advance within the political system. She also noted that the timing of the crackdown, which was just before the long Tet holiday, gave the targets very little time to respond or take counteraction.
Ms Linh then discussed the new appointments. While some speculated that the new president, Vo Van Thuong, may be promoted to more senior positions and even to party chief in the future, Ms Linh believed that his chances would be slim. In her view, Thuong’s election as president was likely a strategic move to block other Southern or more senior politicians from taking the position in the future. Nonetheless, it is still early to predict Thuong’s political prospects. The two new DPMs, Tran Hong Ha and Tran Luu Quang, are new faces to observers, but their decisions will have important implications for businesses and the economy. Unlike their predecessors, the three new leaders lack experience in foreign policy and international affairs.
According to Ms Linh, there would be more crackdowns leading up to the Party Congress in 2026, with Prime Minister Pham Minh Chinh rumoured to be the next target. However, she warned that removing him in the next couple of months might harm public confidence, business sentiment, and ultimately undermine Vietnam’s biggest comparative advantage: political stability.
Ms Linh also discussed the implications of the crackdowns, including a deterioration in business sentiments and the economy, and delays in policy implementation. Data from the first quarter of this year shows that there was a 2% decrease in the number of newly registered companies, and nearly 20% more companies suspended compared to the same period of last year. Furthermore, a recent survey by Control Risks found that 70 per cent of their clients were concerned about the regulatory and policy environment in Vietnam, leading them to consider whether they should remain in the country or not.
Ms Linh encouraged the audience to pay attention to Vietnam’s political calendar and watch for potential crackdowns, with five key milestones to look out for: pre-mid-term Congress Politburo meeting in early May 2023, the mid-term Congress in mid-May 2023, the 15th National Assembly’s 5th session from 22 May to 20 June 2023, the CPV Central Committee’s plenums and National Assembly’s sessions from 2023 to 2025, and the 14th National Party Congress in early 2026.
Despite the recent political shakeup, Ms Linh emphasised that the general situation in Vietnam has not changed, and investors should not wait until 2026 to make decisions, as they would miss out on many opportunities.
Dr Giang discussed the increasing dominance of the CPV over other branches of state power, referring to this as the “party-isation” of Vietnamese politics. In the past decade, the party-isation of Vietnamese politics can be observed through four key phenomena.
First, the Party has come to dominate the state through two mechanisms. Party bureaucracy has taken precedence over state bureaucracy, particularly in regards to anti-corruption efforts, as seen in the re-establishment of several Central Committee organs. Additionally, loyalty to the Party has become a more important factor than expertise when it comes to personnel policy, which is evidenced by provincial personnel changes and the composition of the CPV Central Committee over the past decade.
Second, there has been a revitalisation of ideology, as reflected in ideological training for party members, which includes study sessions on General Secretary Nguyen Phu Trong’s books. It also manifests in the tightening of control over the public sphere and the preference for rewarding party loyalists over technocrats.
Third, repressive institutions have gained significant power, largely thanks to their role in the anti-corruption campaign. This is reflected in the Central Committee membership, as four out of ten “special exemptions” in the 13th Party Congress came from repressive institutions. The Ministry of Public Security, the main executor of the anti-corruption campaign, has seen a steady budget increase, and the Central Internal Affairs Commission has become the specialised agency responsible for overseeing the anti-corruption campaign. Additionally, the Central Inspection Commission has become much more powerful and instilled fear among party members.
Finally, party-isation has been accompanied by the repatrimonialisation of the state. This is a shift from institutionalised governance to a patrimonial system, where personal relationships, cronyism, and corruption become more prominent in the allocation of resources and the exercise of power. Dr Giang noted that this trend began during the tenure of former Prime Minister Nguyen Tan Dung. When General Secretary Nguyen Phu Trong came to power in 2011, he attempted to reverse this by consolidating power, but has consequently increased the risk of repatrimonialisation. Signs of repatrimonialisation are already apparent, such as the formation of close-knit factions and the emergence of new crony capitalists. This has made corruption harder to detect and harder to eliminate.
Dr Giang suggested that the process of party-isation will continue with key repressive leaders being strong contenders for leadership succession. He also noted that the prospect of Vietnamese politics after the Party Congress in 2026 is still uncertain. We could see the return of the collective leadership, or even a new period of reform, but we might also witness the rise of a new strong leader.
In the Q&A session, Ms Linh and Dr Giang answered questions on a variety of issues, including the delays in policy implementation, the potential for the Vietnamese political system to become more personalised like China’s, when the crackdowns will end, the long-term legacy of the anti-corruption campaign, Vietnamese leadership’s view on the negative impacts of the anti-corruption campaign, the impact of the rise of repressive institutions on civil society, and how the leadership changes might affect Vietnam’s foreign policy.