Vietnam’s New Cabinet

The cabinet announced by Vietnamese Prime Minister Nguyen Tan Dung looks strong on continuity.

By Ernest Bower and Greg Poling for

The world is about to meet the real Nguyen Tan Dung. The prime minister of Vietnam was formally elected to his second term at the end of last month by the country’s legislative branch, the National Assembly. His new cabinet was elected last week. It’s a lineup that looks substantially loyal to its boss, strong on continuity, and focused on making existing policies work.

Some analysts argue that Dung is a staunch conservative in a reformer’s clothes. Others see a strong nationalist dedicated to economic reforms and social controls. At the end of his last five-year term, the results will define who is right about Nguyen Tan Dung.

At 64 years-old, Dung, the former medical officer and decorated war veteran from his country’s most southern province, Ca Mau, has survived a rigorous review process within the Communist Party of Vietnam, and has been given the opportunity to pick his team. The country’s success or failure rests on his shoulders now. That was less true in his first term, when he was given much more guidance and forced to try to manage some more established deputies and ministers. After two cabinet reshuffles in 2006 and 2007, and now the ability to name his team, Dung has essentially consolidated bureaucratic power and is accountable for Vietnam’s policy direction through 2015.

The party, ever cautious and conscious of the need to maintain control, has carefully organized leadership to ensure that if Dung falters, levers can be pulled to guide him, primarily through positioning Truong Tan Sang as president.

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The other check on power is the political evolution of the National Assembly. The legislature has become more powerful over the last decade, but its role is to influence, caution, and recommend. It doesn’t wield decisive power and has yet to contest any ministerial or leadership candidate put forward by the party.

On August 3, the National Assembly confirmed by vote the appointment of four deputy prime ministers and 22 cabinet ministers. Much like the election of the senior leadership a week earlier, there were no surprises. A close look at the new ministers reveals a great deal about the priorities of Dung and the government.

The most important characteristics of the new cabinet are streamlining, continuity, cohesion, and youth. This is Dung’s team. The prime minister was able to make his selections with far more freedom than when he was first elected in 2006, suggesting a continued strengthening of the prime minister’s office. While General Secretary Nguyen Phu Trong of the Communist Party remains constitutionally the most powerful figure in the country, the dominance of the prime minister’s office in the day-to-day affairs of government is set to continue.

Expect the new cabinet to demand the economy and state-owned enterprises to tighten fiscal controls and reform in its own image. The number of deputy prime ministers was cut from five to four and the number of ministries from 26 to 22. The stated purpose of these changes was to streamline the bureaucracy and eliminate redundancy among offices. These changes all reflect the government’s goal of creating a more efficient and responsive executive branch.

Continuity suggests a strong commitment to following through with existing policies dominated by economic reform, social control, and in foreign policy, strengthening regional organizations in Southeast Asia while deepening ties with strategic partners, such as the United States, India, and Europe.

Of the four deputy prime ministers, two are incumbents and two were promoted from posts as cabinet ministers in the previous administration. Seven of the ministers are incumbents and eight were promoted from the position of deputy minister. The remaining seven are anything but fresh faces. Five have moved from Communist Party posts to government positions, one was shifted from one ministry to another, and new transportation minister Dinh La Thang, 51, served most recently as chairman of state-owned PetroVietnam.

This is also the youngest cabinet in recent Vietnamese history, with an average age of 56. In his last term, Dung was among the younger half of the cabinet. While still relatively young, relative to his new team, he’s now an elder.

A look at three key ministers—Thanh at Defence, Hue at Finance, and Minh at Foreign Affairs—reveals the pillars of Vietnam’s policies going forward.

Incumbent minister of defense General Phung Quang Thanh, 63, received the highest vote total in the National Assembly with a resounding 97.4 percent. This support emphasizes an institutional deference to the armed forces and mandates a national resolve to take a strong stand on sovereignty issues in disputes with China in the South China Sea. Advancing defence and security ties with the Association of Southeast Asian Nations (ASEAN) and enhancing those linkages with the United States will be priorities. Vietnam has also just announced groundbreaking on a US naval research facility, the first new US military facility in Vietnam since the war.

Another theme is the National Assembly’s growing concern with Vietnam’s rising inflation and slowing economic growth. Legislators’ anxiety was on display in the confirmation of former Finance Minister Vu Van Ninh, 56, as deputy prime minister with only 81.8 percent of the vote. This total was almost 10 percent lower than the next lowest candidate for deputy prime minister. Ninh’s replacement at the Ministry of Finance, Vuong Dinh Hue, 54, received a strong 90.2 percent. As the former head of the Office of the State Audit, Hue is a no-nonsense leader, armed with facts and figures, mandated to correct the inefficiencies of large state-owned enterprises, prevent another debacle like the near collapse of state-owned shipping giant Vinashin, and oversee economic adjustments to rein in inflation and stabilize the dong. He will be joined in this effort by Nguyen Van Binh, 50, who was promoted from deputy governor to governor of the State Bank of Vietnam. Binh has made it clear that he’ll continue the government’s tight monetary policies, with reversing inflation his primary goal.

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The new economic team may adopt severe short-term measures such as price controls. But such antimarket steps will need to be watched carefully as they could eventually undercut Vietnam’s attractiveness as a destination for new investment.

One of the most critical appointments for US interests is the promotion of Pham Binh Minh, 52, to foreign minister. Minh received 94 percent of the National Assembly’s votes. Minh is the son of Nguyen Co Thach, who served as foreign minister from 1980 to 1991 and was perceived to be an early leader in the support for rapprochement with the United States and economic reform. Minh inherited his father’s pragmatism and openness to the West.

Minh’s first posting in the Foreign Ministry was to the Vietnamese embassy in the United Kingdom. In 1999, he was appointed deputy permanent representative to the United Nations, and from 2001 to 2003, he served as deputy chief of mission in Vietnam’s embassy in Washington. All indications are that he’ll be a strong leader and advocate for continued deepening of ties with the United States.

As Dung and his new team begin to unveil their plans, they will be facing a challenging environment. Having plugged into the global trade and financial superstructure, Vietnam’s relatively small economy (gross domestic product is near $100 billion) and developing institutions will be severely challenged by threats of global recession. Vietnamese citizens have benefitted enormously from economic reform, and there’s clearly no turning back. Vietnam is also committed to leading within ASEAN and helping to support new regional security and trade architecture. Battles for influence and geostrategic hedging will whipsaw the process, and staying focused will a real test. The path ahead will be challenging. The true colours of Nguyen Tan Dung will be clear to see by the end of his second term.

Ernest Bower is a senior adviser and director of the Southeast Asia Programme at the Center for Strategic and International Studies in Washington, D.C. This post originally appeared on the CSIS Asia Policy Blog, cogitASIA