A Rather Dull Congress

The latest Vietnamese Congress held few surprises. Locals were anyway more worried about the economy.

Following is a guest entry from Diplomat contributor Bridget O'Flaherty.


So, what’s been the most noticeable change in Vietnam since the 11th Party Congress ended and the new appointments were announced earlier this month? Facebook has apparently become ‘un-blocked.’ That is, users can now go back to accessing the popular social networking site after the block on it was stepped up around the new year, apparently in another crackdown in the lead up to the five-yearly event that concluded last Wednesday.

The congress, a 1,400-strong event that decides key positions within government and outlines the direction of the nation for the next five years, came at a bleak time in the capital. Hanoi’s been undergoing a painful cold snap, which only adds to people’s frustrations about inflation (which is in double digits) and the general state of their economy.

The leading news item, in fact almost the only one to come out of the eight-day event, was the announcement of the new leadership troika. The prime minister, Nguyen Tan Dung, kept his job. His counterparts, General Secretary of the Communist Party Nong Duc Manh and President Nguyen Minh Triet, both retired, being past the official retirement age of 65.

The Facebook block was stepped up around the New Year. As with the previous, easy-to-circumvent block, it went officially unacknowledged, but analysts speculated it was very likely due to the impending Congress, an event for which security is always tight and the sessions of which are very secretive.

In the end, the lead up to the event was far more colourful than the Congress itself. Most ‘crackdowns,’ whether upon activists and bloggers or stray foreigners, have been interpreted as having something to do with a spring clean prior to the meet.

Last year, The Diplomat reported that regulations for visas for foreigners in the country were being tightened, with those found without the hard-to-get working permits liable to be thrown out of the country. At the time, this was interpreted by many analysts as a move against Chinese migrant workers rather than say, hard-drinking young English teachers.

Chinese migrant workers, usually working for Chinese companies, ‘taking’ Vietnamese jobs, were seen as a divisive issue in the lead-up. Thousands of Chinese workers in the ‘sensitive’ Central Highlands, working at the Chinese-run bauxite mines, were one of the main things opponents of the mine pointed out, as well as the potential for horrendous environmental degradation.

It was also thought that the controversial mining issue, which has caused an outcry of a strength rarely heard in Vietnam, could have been used to unseat Dung.

As Vietnam analyst Gavin Greenwood, of Allan and Associates in Hong Kong, noted some months ago: ‘With the CPV Congress due to be held in January now is the time for those wishing to apply pressure on the Party and its leadership to do so. The outcome of the Congress will determine whether the project goes ahead or not. In the unlikely event Prime Minister Nguyen Tan Dung and his immediate faction are ousted, then the project may well be scrapped.’

Of course, Dung survived, and the project hasn’t been scrapped. Neither has the idea for a bullet train linking the two major cities. Though the old Reunification Express takes some two days to creak and rattle the length of the countryside, many thought that the billions could be better spent improving basic infrastructure, such as roads or power supply. But possibly the biggest issue for Dung in the past year has been the ongoing saga surrounding state-owned ship building company Vinashin and its collapse.

Executives were reporting to the premier, and he reportedly wanted to model Vietnam’s state owned enterprises on Korea’s ‘chaebol’ system; but one of Vinashin’s main problems was its diversifying into areas where it had no prior experience, such as hospitality.

These issues were ultimately swept under the carpet, or at least kept within the secretive Congress meetings, rather than aired publicly as criticisms leveled at the prime minister. The bullet train in particular came in for a drubbing from some National Assembly members, such as the deputy for Lang Son Province in the north, who said jokingly, ‘To be honest with the assembly, my IQ is low, so I’m definitely not supporting the project.’

Such ‘fiery’ debate was unusual in Vietnam and the local press took obvious enjoyment in reporting it. But the Congress stuck to a narrower script, focusing on reconfirming legitimacy in the one-party state and setting out a roadmap for the next five years.

Departing Party Secretary General Manh did apologise for the economic woes of the country, such as high inflation and recent currency devaluations. At the beginning of the Congress he was quoted by media as saying, ‘Quality, efficiency and competitiveness remain low. Bureaucracy, corruption, wastefulness, social vices and moral and lifestyle degradation have not been prevented.’

But overall, it’s what happens post-Congress that’s of more interest now. Dung and Sang are both market-oriented, and Dung especially is pushing for an industrialized nation by 2020; his implacable stance on the bauxite mine reflects this.

Fixing inflation, which has soared to double digits, addressing the trade imbalance and currency issues might be at the top of the list. Real action will come only after Congress has finished and the 1,400 comrades have dispersed back to their stations around the nation.

Aside from that, wider economic management in the coming years must be looked at. The government has always liked to link Vietnam’s one-party ‘stability’ with its relatively recent, but strong, economic growth.

As Martin Gainsborough of Bristol University, who recently authored a book debunking much received wisdom about the past 20 years of economic growth in Vietnam, says, ‘Congresses only set out the broad parameters of policy direction.’

Gainsborough has previously said the government’s ability to control macro- and micro-economic issues is weaker than it appears. He told The Diplomat, ‘Political elites are often reluctant to take action in terms of managing the economy,’ as they are liable to upset the powerful, or their own, interests. ‘The general direction is a gradual process of liberalisation of the economy but with an instinctive tendency towards higher state involvement than other economies,’ he added.

Gainsborough argues that the government’s policy statements regarding the economy are less important than watching what actions are, or are not, taken. Implementation, in any area of law or policy in Vietnam can look very different to whatever’s on paper. For example, he says outcomes from policy blueprints can diverge in ways ‘not exactly as intended.’

Greenwood’s analysis of Vietnam’s larger macro-economic problems is that: ‘The government has very little room for maneuvering in terms of balancing the need for economic growth and meeting the growing demands that they rein in inflation and lower food and other staple prices.’

But right now, for most people, the important things are those staples, rather than what the Congress has just passed.