Vietnam’s 2021-25 government to focus on resilience, regional leadership

A sign advertising Vietnam's 12th National Party Congress. Photo: Vuong Tri Binh, CC BY-SA 4.0, via Wikimedia Commons

Vietnam’s successful response to COVID-19 appears to be giving way to a rapid recovery, drawing international attention to the country’s leadership both domestically and on regional issues for Southeast Asia.

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In early 2021, the Communist Party of Vietnam will hold its 13th National Party Congress, laying out the country’s economic and social plans for 2021-25 as its most recent five-year socio-economic development plan (2016-2020) comes to a close.

Specially, as Vietnam continues to draw global attention for its handling of the COVID-19 pandemic, the country’s policies and leadership appear to be paying off both economically and geopolitically.

COVID-19 response based on clear communication and effective leadership

For months, world leaders and political analysts have lauded Vietnam’s model COVID-19 response, but as the country turns to a new government in 2021, observers are also picking apart the country’s policies to tease out the sources of its success.

“Vietnam’s success has drawn international attention because of its early, proactive response, led by the government, and involving the whole political system, and all aspects of the society,” wrote UN Resident Coordinator in Vietnam Kamal Malhotra.

Vietnam has recorded just over 1,300 coronavirus cases with only 35 deaths, the most recent in early September.

Following the initial outbreak of COVID-19 in Vietnam, government and Communist Party leaders adopted decisive measures to limit the spread of the disease, including nationwide isolation policies, careful steps to safely repatriate Vietnamese nationals abroad, the closing of borders and a renewed quarantine in Da Nang in July and August.

Vietnamese people registering for rapid COVID-19 testing in Hanoi. Photo: Truyền Hình Pháp Luật, CC BY 3.0, via Wikimedia Commons

UN officials have pointed to the Vietnamese public’s compliance with government directives as well as clear communication from authorities, including real-time, transparent information on outbreaks and containment measures from the Ministry of Health. Soon after Vietnam’s first outbreaks, the government closed schools and implemented comprehensive quarantine and track-and-trace programs.

As far as economic resilience, analysts have attributed much of Vietnam’s success to fiscal policies focused on supporting vulnerable households and precarious businesses most impacted by domestic slow-downs and disruption of international trade, travel and supply chains. The IMF also noted key steps by the State Bank of Vietnam (SBV) to increase liquidity and facilitate financing amid the crisis.

The country had also already built robust public health mechanisms to contain previous disease outbreaks and was prepared to collaborate effectively with the World Health Organization (WHO).

Economic, social resilience built on core of sound policy

The effectiveness of Vietnam’s COVID-19 response has drawn attention to its leadership, with Nguyen Phu Trong as Communist Party head and general secretary—finishing his term as the country’s 2015-2020 government nears the end of its tenure.

In mid-November, the International Monetary Fund (IMF) revised its forecast for the country’s GDP growth upward to 2.4% for 2020, showing that the country has largely managed to buck the global economic slump. Vietnam’s GDP growth was just over 7% in 2019 and the IMF has projected growth of 6.5% for 2021.

The country’s resilience through COVID-19 builds on a pattern of growth over the past decade. According to the World Bank, Vietnam’s “consumer” class—those spending US$5.50 or more per day, grew from just below 50% of the population in 2010 to over 70% by 2016.

Photo: NGUYEN THANH HAI / Pixabay

Vietnam’s economic growth in the past decade has been largely tied to policies that ensure a strong business environment and improve efficiency of production: from 2011-15, the country’s socio-economic plans centered around efforts to recover from the global financial crisis. For the past five years, the country has focused its economic policies on steps to promote a fair and transparent business environment, environmental sustainability and a creative economy and society.

This has resulted in policies to support a strong structure for state-owned enterprises, the financial sector and public investments. Over the past two years, Vietnam has attracted record amounts of foreign investment and reached a landmark trade deal with both the EU and the members of the Regional Comprehensive Economic Partnership (RCEP).

Southeast Asia works through COVID-19 as Vietnam finishes term as ASEAN Chair

Vietnam is also finishing its tenure as chair of ASEAN for 2020 and in mid-November, Prime Minister Nguyen Xuan Phuc hosted the 37th ASEAN Summit virtually.

“It is agreed that we must maintain and build upon ASEAN centrality, promote dialogue and cooperation, prevent conflicts, build confidence and shape a regional architecture that is open, transparent, inclusive and rules-based,” the prime minister said at the closing of the conference.

As ASEAN Chair, Vietnam worked with dialogue partners and the regional community to facilitate cooperation in the fight against COVID-19.

Vietnam’s Prime Minister Nguyen Xuan Phuc (second right).

The 37th ASEAN Summit saw leaders adopt a series of agreements focused on strengthening ASEAN centrality, integration and resilience—including through the bloc’s Post-2025 Vision and the ASEAN Comprehensive Recovery Framework. Leaders also convened the first-ever ASEAN Women Leaders’ Summit, focused on women’s voices and the need for equal representation.

The signing of the RCEP was another historic milestone. Member countries gain access to open markets for investment and trade under simplified customs procedures and reduced tariffs.

The RCEP agreement is especially vital in light of COVID-19 economic recovery efforts. By some estimates, the value of intra-regional trade in Asia has now surpassed that of trade between Asia and North America and Europe combined. The RCEP will further boost growth and signals that the center of the global economy continues to shift closer to Asia.

Vietnam’s tenure as ASEAN Chair also saw the region contend with increasing tensions over Chinese aggression in the East Sea or South China Sea.

Over the course of 2020, Beijing has continued to assert its unlawful claims to waters that belong to multiple ASEAN states. In April, a Chinese ship sank a Vietnamese fishing vessel in a repeat of a similar incident in June 2019 when Chinese boats sank multiple Filipino fishing vessels inside Philippine waters.

In April, Beijing also announced new administrative districts on the Paracel and Spratly Islands—areas which it unlawfully claims. The move builds on China’s strategy of constructing artificial islands to support its claims in the area.

In November, the 12th South China Sea International Conference, under the theme “Maintaining peace and co-operation through time of turbulence” was held in Hanoi, attended by 700 delegates from 30 countries. The conference focused on how ASEAN states have worked to reduce tension in the East Sea. Southeast Asian leaders have worked to support multilateralism and ASEAN centrality amid rising tensions between world powers. These efforts have been based in maritime cooperation and international law, including the 1982 UN Convention on the Law of the Sea (UNCLOS).

In response, Hanoi has supported ASEAN to push for a rules-based maritime policy. This year, ASEAN made further steps towards a unified stance on China’s territorial aggression through the South China Sea Code of Conduct process.

In March, Hanoi also pushed the United Nations to act on the issue, submitting a diplomatic note outlining China’s aggressive pursuit of its claims. The move built on existing efforts by Southeast Asian states to raise the issue of China’s incitement in the South China Sea at the UN level.

New government in Hanoi to build on strong leadership through COVID-19

As Vietnam looks to build on its effective responses to the challenges of 2020, the country is turning towards a new incoming government for 2021-25. In January, the Communist Party will convene its 13th Party Congress to elect its next round of leaders, including its general secretary and the country’s president, prime minister and head of the national assembly.

Over the 2016-20 term, government and party policies proved effective in supporting economic and social growth, as well as the country’s response to COVID-19. However, negative impacts from the pandemic are inevitable and the country’s next socio-economic plan will have to confront many challenges. Priority areas will include a quick recovery and steps to take advantage of incoming foreign investment from multinational corporations as they move and reorganize global supply chains. Policy will also have to protect against the risk of inflation as the global economy risks falling into recession. On the other hand, Vietnam will also need to address the need for equality on the domestic front, bringing people’s income closer to the level of other countries in the region while reducing the impact of this growth on the environment.

In region, observers also expect the party to expand Vietnam’s role as an emerging leader through global and regional partnerships focused on diplomacy, trade and integration. Regionally, Vietnam’s backing of ASEAN frameworks like the South China Sea Code of Conduct will remain key.

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