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Vietnam Appoints New President Amid Corruption Crackdowns

18 May 2023

In recent years, Vietnam’s rapid economic growth has made the Southeast Asian nation one of the world’s fastest-growing economies and a prime location for Foreign Direct Investment (FDI) in Asia.

To attract investors, some industry blogs point out the role of an anti-graft campaign, known as the “blazing furnace,” which was initiated in 2011 by Nguyen Phu Trong, the almost-80-year-old General Secretary of the Communist Party of Vietnam (CPV).

As measured by Transparency International’s Corruption Perceptions Index, between 2012 and 2022, Vietnam’s anti-corruption score increased from 31 to 42, with a three-point increase between 2021 and 2022 alone. Vietnam is currently ranked 77th among the 180 countries measured.

Despite experiencing many noteworthy successes since its initiation, Vietnam’s long-running anti-corruption campaign has far from eliminated all corruption in the country, which continues to take a significant toll on the life quality of Vietnamese residents.

Pandemic scandals

Since the recent discovery of two major pandemic-related scandals, one involving illicit COVID-19 tests and the other involving government-organised repatriation flights, the “blazing furnace” campaign has implicated leaders at the highest levels of the Vietnamese government.

The first of these scandals involved the private company Veit A Technologies JSC (Viet A) selling illicit COVID-19 tests at prices inflated as much as 45% the New York Times reported.

After receiving US$830,000 from the Ministry of Science and Technology to produce the tests, Viet A collected over US$175 million between March 2020, when the scandal began, and December 2021, when it was discovered. In addition to overcharging for these tests, Viet A and the Ministry of Science and Technology apparently falsely advertised that the test had been approved by the World Health Organization (WHO).

Upon the discovery of the testing scandal, several Vietnamese officials were removed from office and detained or placed under criminal investigation for their abuse of power, including health minister Nguyen Thanh Long, and mayor of Hanoi, Chu Ngoc Anh.

In another major pandemic-related scandal, 54 top government officials and businesspeople generated over US$7 million in bribes by charging Vietnamese citizens “raised” fees for government-organized repatriation flights.

Throughout 2022, several high-ranking officials were arrested for their involvement in the scandal, including Deputy Minister of Foreign Affairs To Anh Dung. In January of this year, the CPV also voted to remove two deputy prime ministers, Vu Duc Dam and Pham Binh Minh, for their participation in the bribery affair.

Removal of President Nguyen Xuan Phuc

Within two weeks of the two deputy ministers’ removal from office, Vietnam’s president, Nguyen Xuan Phuc, abruptly resigned, which the government presented as a voluntarily decision to enter retirement.

“Fully being aware of his responsibilities before the party and people, he submitted an application to resign from his assigned positions, quit his job and retire,” it claimed.

Analysts talking to CNA, however, have suggested that the alleged involvement of Phuc’s wife and relatives in the COVID-19 test kit scandals resulted in the president’s forced removal. Although the role of president is largely ceremonial, it is nonetheless one of the “four pillars” of the CPV, along with the general secretary, the prime minister, and the speaker of the house.

The president’s removal makes clear that even the highest-level government officials are not exempt from the “burning furnace” campaign devised by General Secretary Trong. As the most powerful of the “four pillars,” Trong urged the removal of all officials who had acted irresponsibly during the two major scandals, and President Phuc was no exception.

Despite blaming Phuc for the corrupt actions of the ministers under his jurisdiction, the CPV commended him for his prior accomplishments in promoting economic growth and COVID-19 prevention measures. Although the CPV did not comment on the rumours surrounding Phuc’s family, many in Vietnam have expressed scepticism over the true reason behind Phuc’s resignation. Some civilians interviewed by Voice of America, have suggested that the president was removed from office for deeper political reasons and that the Viet A scandal was just used as an excuse to avoid weakening the CPV’s public image as a party of unification.

Filling the leadership gaps

Following Phuc’s resignation on 17 January 2023, the search began for a new leader to take his place. Until a successor could be selected, Vice President Vo Thi Anh Xuan became the interim president. On 4 February 2023, a national ceremony formalized the transfer of power.

At the ceremony, Phuc restated his claim that his resignation was a personal decision motivated by his own duty and loyalty to the CPV.

“Being aware of my responsibility to the Party and the people, I submitted a request to resign from all positions and to retire. During the extraordinary meetings of the Central Party Committee and the National Assembly, I raised this issue unequivocally and clearly,” he said.

On 2 March 2023, Vo Van Thuong, a Standing Member of the Communist Party’s Secretariat, was sworn into office as the country’s new president for the remainder of the 2021-2026 term. At age 52, Thuong became the youngest president in the country’s history.

Despite being younger than his predecessors, however, Thuong, who began his political career in 1993 and has since occupied several high-level government positions, received 98.38% of the National Assembly votes.

Importantly, Thuong also has a close connection with General Secretary Trong. In his first parliamentary speech as president, Thuong pledged to align his actions with CPV values and standing policies, including Trong’s anti-corruption campaign.

“I will be absolutely loyal to the fatherland, the people and the constitution, striving to fulfil the tasks assigned by the party, the state and the people,” Thuong stated.

Vietnam’s political future

The dual COVID-19 corruption scandals and the high-profile resignations that followed have left Vietnamese residents and foreign nations alike wondering what the future holds for the country’s domestic politics and international relations.

Although these leadership changes have raised questions about Vietnam’s political stability, General Secretary Trong remains firmly in control of the CPV. There is also no evidence that the transition between officials will alter Vietnam’s economic performance. In fact, Vietnam’s GDP grew by 8% in 2022, the fastest annual growth rate recorded since 1997.

As president, Thuong is expected to continue the effort to combat illicit activity in the upper levels of Vietnam’s government. However, while the campaign has helped to reign in the country’s corruption, it has not come without consequences. Having become “especially cautious” about their decision-making, many government officials are now hesitant to take action, “causing delays to many public-funded and private investment projects”.

Foreign investors have also questioned how these political shifts may impact their investments, as well as whether the change in leadership will shift the “geopolitical balance” in Vietnam’s political and economic dealings with China and the US. Despite these uncertainties, however, Vietnam observers “don’t see major divisions within the leadership on international policy”.

Article by Fatima Abuzar.
Editing by Anrike Visser.

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