An uncertain anniversary in Vietnam

As Vietnam commemorates the 87th anniversary of its ruling Communist Party, factional infighting and economic pressures are testing its power monopoly

David Hutt, Asia Times, February 3, 2017

The Communist Party of Vietnam, the heart of power of the country’s unitary government, celebrates today (February 3) its 87th founding anniversary. While there is no clear challenge to the Party’s firm grip, internal divisions, governance issues and economic pressures are all testing the Party’s foundational claim of upholding an equitable and just socialist republic, as first articulated and envisioned by its ideological founder and revolutionary leader Ho Chi Minh.

Today, Vietnam’s communist regime is acutely aware that its legitimacy depends on its delivery of an expanding economy, political stability and clean governance. Indeed, it has long mobilized such claims to withhold democracy and stifle dissent. “Opposition movements, if they exist, still do not weigh heavily [in society],” said Benoît de Tréglodé, an expert on Vietnam. “In daily life the obsession is with consumption, enrichment, and the short term.”

While Vietnam’s political system is notoriously opaque, there have been recent signs of factional infighting and opposed views inside the Party. At the Party’s 12th Congress in January 2016, an occasion where top party positions and policies are decided for the next five years, leaders shifted their priorities from “strengthen government capabilities” to building a “clean and strong” Party. It also pushed back a previous 2020 deadline set for becoming a “modern and industrialized nation” to some time “soon”, underscoring rising economic concerns.

At the time, those signals and outcomes surprised commentators who had predicted that then two term Prime Minister Nguyen Tan Dung would be promoted to become the Party’s general secretary, the Party’s top post. Despite his reform credentials and international support in the West, Dung and his perceived as progressive faction were unable to unseat incumbent secretary general Nguyen Phu Trong and his more conservative camp.

Analysts and pundits portrayed the result as a victory for the “conservative” and “pro-China” faction over Dung’s “reformist” and “pro-US” group which had advocated and promised to deepen reforms, including over the hidebound state sector. While those assessments have proven mostly right, the power struggle is still reverberating in a Party that has long ruled by committee-driven consensus.

Following the death of General Secretary Le Duan in 1986, political power in Vietnam was centered within the Politburo. In October 2012, however, the Party’s Central Committee reversed a Politburo decision to discipline Dung for perceived economic mismanagement amid reports of high level corruption. Seven months later, the Central Committee ignored Trong’s choice of two additional Politburo members, electing their own candidates instead.

Trong’s victory at last year’s Congress, however, has driven a re-balancing of power between the Party’s main bodies, while reasserting the supremacy of the general secretary over the prime minister, president and other top posts. “There were clearly cleavages within the Party that were exposed ahead of the Congress that have subsided for the time being,” said Paul Schuler, an assistant professor at the University of Arizona’s School of Government and Public Policy.

Trong has acknowledged that reordering in recent state media interviews. “The State apparatus was consolidated, ensuring stability for the implementation of targets and tasks,” Trong said in a Vietnam News Agency interview in January. “Under the leadership of the Party Central Committee and the Politburo, the whole political system is involved in social and economic improvements.”

Carlyle Thayer, an prominent Vietnam expert, predicted two months after last year’s Congress that “increased representation of current and former public security officials on the Central Committee and Politburo is likely to result in increased anti-corruption efforts as well as suppression of pro-democracy activists.” That included the promotion of former Minister of Public Security Tran Dai Quang, a perceived hardliner, to the presidency.

Thayer’s prediction has come to harsh fruition. In recent months, scores of grass roots activists and public demonstrators have been arrested and imprisoned for voicing dissent, including over the government’s perceived as poor handling of a toxic spill disaster last year that has devastated fisheries and communities in the country’s central coastal region.

Trong has followed up with counter-corruption measures targeting senior Party members. In November, the Central Committee dismissed Vu Huy Hoang, a former minister of industry and trade, as secretary of the Party Delegation on charges of “nepotism” and a “lack of good examples.”

High-ranking former Party official Trinh Xuan Thanh fled the country in August before a September 16 government order claimed he acted “contrary to government regulations” and caused “severe damages” to a state company. Some analysts and local bloggers, however, wonder whether the emerging purge is disproportionately targeting members of Dung’s diminished faction in a bid to burnish the Party’s public image.

The regime’s most pressing challenges are arguably economic. The Party took a substantial hit last month when incoming US President Donald Trump formally scrapped the Trans-Pacific Partnership (TPP) trade pact. It was estimated that TPP would have boosted Vietnam’s GDP by 11 percent, almost US$36 billion, and expanded exports by 28 percent over the next decade. Vietnam is currently ASEAN’s largest exporter to the US.

Despite average growth rates of over six percent in the last decade, analysts warn that recent growth has been driven by fast expanding domestic debt that has surpassed gross domestic product (GDP) growth each of the past three years. In 2015, for example, Vietnam’s budget deficit rose by 14 percent to $11.47 billion, representing nearly 6 percent of GDP. Public debt now hovers around 62% of GDP.

Without TPP, Trong has signaled he may look to China for economic help. Last month, Trong made his first trip to Beijing since last year’s Congress, symbolically at the same time as outgoing US Secretary of State John Kerry paid a farewell visit to Vietnam. Nguyen Minh Quang, a lecturer at the School of Education at Can Tho University, said that Trong’s trip may have signaled a re-consolidation of the “pro-Chinese faction’s ruling position” but Trong’s main motivation for traveling to Beijing was likely economics.

Trong has bid to accelerate the privatization, known locally as “equitization”, of Vietnam’s indebted and often mismanaged state-owned enterprises (SOEs) to spur growth. While not new, sell-offs in recent years have usually been limited to small stakes that have maintained state control. Trong’s new push is seen by analysts as acknowledgement of fragility in the property and banking sectors and Hanoi’s growing need to raise capital outside of debt markets.

However much Trong may have consolidated his position on top of the Communist Party, its continued monopoly on power will depend on delivering tangible economic results and a clean public image. The Vietnamese people may not elect their officials, a point that will be underscored at today’s Communist Party anniversary celebrations, but its leaders have over the years become increasingly sensitive to public opinion.

David Hutt is a journalist based in Phnom Penh, Cambodia. He’s on Twitter at @davidhuttjourno.