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Vietnam’s Political Environment and the Anti-Graft Campaign

Temjenmeren Ao
Dr Temjenmeren Ao is Associate Fellow in the Southeast Asia & Oceania Centre at Manohar Parrikar Institute for Defence Studies and Analyses. Click here for detailed profile.

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    Temjenmeren Ao
    May 29, 2024

    Over the last few years, Vietnam’s political environment has witnessed a major churn in the wake of the ongoing dot lo anti-corruption drive. Since 2016, Nguyen Phu Trong, the general secretary of the Communist Party of Vietnam (CPV), has been taking measures to curb corruption as it was seen as essential to ensure the legitimacy of the party.

    The campaign reached the highest-levels of the party-state apparatus when in January 2018, Dinh La Thang became the first member of the Party’s Politburo to be sentenced to prison. Minister of Information and Communication, Truong Minh Tuan was dismissed and Bui Van Thanh, a deputy minister in the Ministry of Public Security, along with Dinh Ngoc He, chairman of the military’s Thai Son Joint Stock Company, were arrested.

    In 2024, many high-profile officials have been charged with fraud connected to the state-owned PetroVietnam Construction Joint Stock Corporation and Sacom, Ocean and Vietnam Construction banks. PetroVietnam’s chief executive officer was sentenced to death and fellow executive Trinh Xuan Thanh was sentenced to double life terms in prison.1

    President Nguyen Xuan Phuc resigned in January 2023, in the wake of a series of corruption scandals involving his subordinates and their handling of the COVID-19 pandemic. Phuc’s successor Vo Van Thuong who took oath in March 2023 also resigned in March 2024 over violating party rules which included fraud and bribery allegations.2 In 2024, there have been some major shakeups in Vietnam’s top leadership with the resignations of the third- and fourth-most senior officials in the government. This included National Assembly Chair Vuong Dinh Hue in April and President Vo Van Thuong in March. Further, on 16 May, Truong Thi Mai, head of the Central Organization Commission of the Communist Party of Vietnam and fifth-highest ranking official in the government, resigned from the Politburo.

    On 20 May 2024, the National Assembly convened and elected its Vice-Speaker Tran Thanh Man to replace Vuong Dinh Hue as Chairman and To Lam, Minister of Public Security to succeed Vo Van Thuong as President. They now join General Secretary of the CPV Nguyen Phu Trong and Prime Minister Pham Minh Chinh, as the traditional ‘four pillars’ of Vietnam’s leadership. While the post of the President is largely ceremonial, Lam as head of the state puts him in a very strong position to become the next CPV’s general secretary, which is the most important political position in the country. The CPV general secretary Nguyen Phu Trong is currently serving his third term and may not seek another term after 2026.3

    The crackdown on big corruption cases and wrongdoings of high-ranking officials is seen as necessary towards restoring public trust and confidence. Public trust in the government has been on a decline especially after serious allegations of extortions amounting to US$ 200 million from expatriate Vietnamese who were trying to return home during the COVID-19 pandemic. Investigations were also launched against more than 100 people linked to a US$ 172 million scandal involving Viet A Technology Company.

    These corruption scandals led to President Nguyen Xuan Phuc resigning in January 2023, which raised serious questions about the transparency of the government. The ongoing political discourse in Vietnam is geared towards creating a positive sentiment and addressing the dissatisfaction of the public. CPV general secretary Trong’s anti-corruption campaign has also contributed positively in terms of Vietnam's ranking in the international anti-corruption rankings. According to the Transparency International’s Corruption Perceptions Index 2022, Vietnam ranked 77th out of 180 countries, which is its highest position since 2012.4

    While Vietnam continues to be a one-party state under the political control of the CPV, economic liberalisation, its accession to the World Trade Organization in 2007 and signing a number of free trade agreements made it emerge as an attractive market for foreign direct investments. Vietnam achieved an impressive economic track record on account of strong fundamentals that included favourable demographics, skilled human capital and good income distribution.

    The anti-corruption measures dominating Vietnam’s current political discourse are seen as necessary steps to ensure economic growth of 7–8 per cent to reach the current position of Asian economies such as Taiwan and South Korea by 2035.5 Measures such as deregulations and lowering the cost of doing business will attract more foreign direct investments in Vietnam as it continues to strive to become one of the fastest growing economies in Southeast Asia, and achieve a middle-income status.6

    President To Lam, who spent more than four decades in the Ministry of Public Security before becoming a minister in 2016 was behind many of the anti-corruption investigations against high-profile politicians and senior officials. The crackdown on corruption that has led to the resignation of two Presidents, senior officials, also included the biggest-ever fraud case by Truong My Lan, the chair of the developer Van Thinh. She was found guilty of embezzlement of US$ 12.5 billion, equivalent to almost 3 per cent of Vietnam’s GDP.7

    These actions in the last few years which led to the resignation of senior officials and a number of high-profile financial scandals has also impacted Vietnam’s economy negatively. As per the World Economic Outlook published by the International Monetary Fund, Vietnam’s GDP is estimated to be around 5 per cent in 2024. It had made a good recovery post COVID-19 pandemic in 2021, registering a GDP growth of 8.1 per cent in 2022 but fell to 5 per cent in 2023.8

    Therefore, the ongoing political clampdown which seeks to restore the integrity of the party, will have some negative economic impact in the short run.  However, as Vietnam is on the way to become a middle-income nation, the anti-graft campaign is being undertaken to ensure good governance. This will help build institutions that can aid complex cooperative interactions between domestic and international partners, which is key for innovation and Vietnam’s future growth.

    Views expressed are of the author and do not necessarily reflect the views of the Manohar Parrikar IDSA or of the Government of India.

    Keywords: 
    Vietnam

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