Vietnam: Same leader, but better for the neighbourhood?

Secretary Kerry Addresses Vietnamese Communist Party Secretary General TrongSecretary Kerry Addresses Vietnamese Communist Party Secretary General Trong PHOTO US State Department Photo

By Loke Hoe Yeong

Last week’s congress of Vietnam’s Communist Party re-elected Nguyen Phu Trong as its Secretary-General, de facto the most powerful position in Vietnamese politics. Continuity of leadership in a stable one-party, communist state would not normally generate much interest, if not for reports of dramatic political intrigue, relating to infighting and deal making between two factions.

The name of the main contender for the party leadership post, the incumbent Prime Minister Nguyen Tan Dung, was inexplicably pulled off the list of candidates at the last minute. This eventually allowed Mr Trong to run unopposed for the position. The two men had been firmly on an equal footing with each other in the leadership race for some time.

Mr Trong – a conservative holding back Vietnam’s advance?

Mr Trong was seen as a conservative trying to salvage the traditional socialist values of the Vietnamese Communist Party, as well as its ties with its traditional allies. Mr Trong had refrained from overly criticising China, especially during its conflict with its giant northern neighbour. In May 2014, China towed an oil rig into the contested waters of the South China Sea, near the Vietnamese coast.

The most senior Vietnamese leader to speak up forcefully against China was Mr Dung. Other segments of the Vietnamese political establishment followed suit along Mr Dung’s nationalist route, inciting Vietnamese patriotism. Anti-China riots broke out in Vietnam’s cities and industrial zones.

Moreover, Mr Dung has been seen as the face of a reforming Vietnam, and could boast about overseeing growth rates of between 6 to 7%, and with gross domestic product (GDP) per capita tripling during his tenure. He was also seen as friendly towards the United States, the former arch-enemy of Vietnam.

Another landmark development recently was Vietnam’s decision to enter into a trade agreement with the US. That agreement, the Trans-Pacific Partnership (TPP), also portended a huge step forward in trade liberalisation for the country that is still nominally Communist in its official ideology, plugging it more deeply into global trade links.

Would the continuation of Mr Trong’s leadership over the Communist Party hinder – or even derail – Vietnam’s international commitments towards liberalising trade, including that represented through the Asean Economic Community (AEC)?

Mr Dung: entrepreneural, corrupted or nationalistic?

Those complaining of the slow pace of reforms of the Vietnamese economy – seen in tandem with its international commitments as seen through the TPP – would certainly want to see Dung in full control of the Communist Party. Mr Dung exudes a more entrepreneurial outlook that reflects his associates and family. He has a “flashy” American-Vietnamese son-in-law who owns the McDonald’s franchise in Vietnam. The multi-national fast food chain opened its first outlet in the country only in 2014.

But all this has also tainted Mr Dung with accusations of cronyism, even outright corruption. That could well have presented the conservative Mr Trong with some leverage over his rival, when the leadership race tightened.

Yet there are other variables and externalities that could throw Vietnam off the reform path. The South China Sea disputes, in which Vietnam has increasingly taken a vocal role in recent years, could set back political stability in the region, arguably more crucial for economic stability. China is still the largest trading partner of Vietnam.

Mr Trong, better armed with caution in dealing with China, would be better placed to calm sentiments down, both within his party and country, as well as with China’s leadership.

Neither is he all that antagonistic towards the US. Mr Trong himself was guest at the White House with President Barack Obama last July, in a landmark visit to Washington. Such a visit in itself might not mean much. But considered in totality, Mr Trong appears adept enough at navigating his country through the tricky web of international relations, in balancing Vietnam’s relations with the US and China.

Beyond factionalism in Vietnam’s Communist Party

All of these might just be external appearances. An alternative view goes that Mr Dung has been key to increasing Vietnam’s economic dependence on China, and is in fact China’s preferred candidate for leading Vietnam.

Signalling is important nevertheless. It will not be clear to outsiders what the maneuverings behind the scenes of the Vietnamese leadership congress are. The continued leadership of a conservative figure may be a blow to reform-minded ones in Vietnam’s Communist Party.

Mr Dung is now set to retire and be replaced as prime minister by the end of this year.

In balancing the uncertainties of international relations in Vietnam’s neighbourhood, a figure like Mr Trong might not be all bad news. The last thing the international community would want is a conflict spiraling out of control the South China Sea, one with no clear benefits to victor or vanquished alike.

That would throw the economic trajectory of Asia off and be more detrimental than the factionalism within Vietnam’s Communist Party.