Vietnam’s Search for Stability

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Vietnam’s Search for Stability

The Communist Party’s lack of resolve shows its desire for stability at all costs. It may be their undoing.

On October 15, Vietnam’s Communist Party concluded its longest meeting ever, admitting big mistakes in preventing and remedying corruption. Central to the meeting’s discussions was the mismanagement and nepotism committed by Prime Minister Nguyen Tan Dung, who eventually escaped punishment. The half measures encapsulate the entrenched nature of corruption in Vietnamese politics, but they also reflect the party leadership’s preference for stability. Paradoxically, the very lack of resolute actions against corrupt officials like Dung will drive Vietnam further into an era of political infighting and economic distresses.

The rise and survival of Mr. Dung as one of Vietnam’s most powerful leaders neatly illustrates the evolution of the communist state in the reform era. The protégé of both leaders of the two major factions in Vietnam’s ruling party, the conservative President Le DucAnh, and the reformist Prime Minister Vo Van Kiet, Mr. Dung became the youngest member of Vietnam’s highest decision-making body, the Politburo of the Communist Party, in 1996. Extremely pragmatic, daring, and determined, he skillfully took advantage of the reformers’ hope for a leader fearless of change, the conservatives’ preference for a leader tough on opposition, and the party-state’s unlimited power, to consolidate his position.

Underlying Mr. Dung’s rise to power is an evolving mixture of four policy currents that characterizes contemporary Vietnamese politics. The first is driven by the conservatives, who advocate the primacy of political stability through regime preservation. The second is represented by the reformers, who promote domestic modernization and international openness by adopting liberalism and capitalism.

The marriage of communism and capitalism has led to the ascent of two other policy currents. One follows the middle of the road, trying to bridge the diametric differences between communism and capitalism. The other pursues the dual way, accumulating profit the capitalist way and power the communist way.

The middle of the road approach benefits from being politically correct in a long-term cohabitation between the conservatives and the reformers. A middle road was endorsed by then General Secretary Le Kha Phieu of the Communist Party during 1999-2000. Mr. Phieu initiated a major campaign against corruption and encouraged the blending of new ideologies that reconcile the party’s interests with those of the larger nation. Impractical as they were, these efforts vanished with Mr. Phieu’s fall in 2001.

By 2006, the dual way emerged as the strongest of Vietnam’s four policy currents. Urged on by followers and reformers of this approach, Vietnam quickly concluded negotiations to join the World Trade Organization. Mr. Dung, the most networked of the dual way proponents, was elected prime minister with powers eclipsing even those of the Communist Party chief. Vowing to turn state-owned conglomerates into global players, Mr. Dung received the party’s blessing to become in effect the super-CEO of these behemoths. He used them as both an investment channel to fuel high growth and a handy tool to get the economy under control.

Mr. Dung’s model soon broke down, however. A few months prior to the 2008 global recession, Vietnam started its own period of economic volatility and slowdown, which has yet to come to an end. Political will notwithstanding, growth rates fell under 6 percent on average in the last five years, down from the roughly 8-percent level of the previous five-year period. Within a few years, one of the thirteen conglomerates set up by Mr. Dung effectively went bankrupt, causing losses of over 4 billion U.S. dollars, while several others were believed to have technically defaulted.

Amazingly, Mr. Dung survived into a second term despite the economic malaises and corruption scandals that had become the brand of his first. The party elites did not, however, remain undisturbed by the chronically rampant corruption that permeated the government. Seeking to polish its image and keep some balance among the contending policy currents, the party’s eleventh congress in 2011 chose a middle of the roader with a clean face, Mr. Nguyen Phu Trong, as the new party chief.

The main fault line in Vietnamese elite politics is no longer divided between the conservatives and the reformers as it was during the 1990s. It now lies between the middle of the road and the dual way and the central issue is how to deal with corruption. Indeed, Vietnam’s leadership since 2011 embodies a new constellation of policy currents. None of the top four leaders is either a conservative or a reformer. Besides General Secretary Trong and Prime Minister Dung, State President Truong Tan Sang is another centrist and National Assembly Chairman Nguyen Sinh Hung another dual way follower.

Soon after consolidating his position, in January 2012, Mr. Trong launched a large campaign to clean up the party. Supported by Police Minister Tran Dai Quang, in late August and early September the campaign scored its first major success with the arrest of several banking tycoons who had close ties to Mr. Dung. The timing of the arrests was not accidental. A month later, a plenum of the party’s central committee would determine the fate of the prime minister.

This time again, Mr. Dung survived his opponents’ attacks. The majority in the Central Committee spared him from censure. He did not need to apologize for the wrongdoings of his government and his family—the Politburo and the Central Committee did it for him collectively. This way, the plenum’s communiqué explained, the party would avoid adding fuel to the fire of the “hostile forces.”

It is noteworthy that the party chose to protect its corrupt members rather than to get rid of them. The reason may be that, the number of corrupt party members has simply blossomed to the point where reining them in is impossible. But another related reason for the soft approach is the party’s worship of stability. Although Mr.Trong did not achieve his goals, the party meeting bore the mark of his leadership. Addressing the meeting, he emphasized that political stability should be given first priority.

The party meeting opted for continuation in the leadership, but this decision does not represent the end of the line. Rather, it only ushers in a second period, which promises to be fiercer than the first. On the heels of the plenum, the state media reported that State Bank Governor Nguyen Van Binh,  known to be one of Mr. Dung’s closest allies, was receiving major awards. In the other camp, Mr. Trong told a group of voters that plans were being prepared to make a no-confidence vote possible from the middle of the next year. Also meeting with his constituency as a parliament member after the party plenum, Mr. Sang called on the people to shred fear and step up the fight against corruption.

Mr. Sang’s call can be seen as an implicit confession of defeat, but even so, no clear winner emerged from the party meeting. What lies ahead in Vietnamese politics is not a period of stability but one of confusion. The infighting within the ruling elites will only intensify as the deadline to select new leaders for the next term approaches. With a leadership deeply divided, Vietnam’s struggling economy will have little chance to be properly managed, to say nothing of instituting effective restructuring. If a new Asian tiger emerges in the near future, it won’t be Vietnam.

Dr. Alexander L. Vuving is an Associate Professor at the Asia-Pacific Center for Security Studies.