Vietnam, anti-corruption purges to settle accounts within the Party
Since the capture of Saigon, the Communist Party of Vietnam (PCV) has endeavored to project an aura of morality and harmony in the country of 99 million that he has governed, with the aid of a severe repressive apparatus, since 1975. The veil of Maya was torn apart by the close resignations, both due to accusations of corruption, of two presidents of the Republic: Nguyen Xuan Phuc on January 18, 2023 and then Vo Van Thuong at the end of March 2024. This political instability could drive away foreign investors and American companies leaving China which until now they have found in Vietnam, a rising star (not only for the symbol of its flag ) of the South – East Asiaa friendly country in which to position the value chains of critical sectors, such as semiconductors and microchips, and protect its capital from strategic confrontation between Beijing and Washington. In 2023, it is no coincidence that foreign direct investments increased by a third, reaching 36.6 billion dollars.
The Vietnam, one of the 5 single-party communist states left in the world, is a “cub” that wants to be an Asian tiger but must be careful not to get caught up in the great game of the two superpowers. The resignations of Phuc and Thuong must be seen in the broader framework of an anti-corruption campaign launched in 2013, the “fiery furnace”, which has already affected 200,000 party members and made the heads of two deputy prime ministers, various ministers, a quarter of the members of the politburo (the supreme body of the PCV), 50 generals and hundreds of government officials. Corruption is a gangrenous plague of this country: on April 11 the real estate magnate Truong My Lan was sentenced to death for alleged financial fraud and improper obtaining of loans, perpetrated by force of Chinese bribes and boxes through the Saigon Commercial Bank. The volume of this supposed theft (12.5 billion dollars in fraud plus 44 billion in undue loans, of which 27 billion to be repaid) amounts to more than 13% of Vietnamese GDP in 2023. Two tons of cash from the scam. The tycoon appealed the sentence on April 26th.
However, as per the manual for nations where the rule of law is fragile, the fight against corruption is being used by opposing factions and at various levels of the state machine as a picklock to eliminate their political opponents, taking on the contours of a purge. In the space of one morning, Thuong went from being the youngest president of the Republic in the country’s history to the one with the shortest mandate. Until a few months ago he was seen as the golden boy of Vietnamese politics and the designated heir of Nguyen Phu Tronggeneral secretary of the Communist Party of Vietnam since 2011, already president of the Republic and de facto dominus of the nation, who at 79 years of age is set to retire from the public scene at the next party congress in 2026. The defenestration of Trong’s dolphin signals an intensification of internal struggles for the leadership of the Party. In Vietnam, in fact, collective leadership is exercised by the “four pillars” of the nation (party secretary, president of the Republic, prime minister and president of the National Assembly) based on balance and the consensus method to stem the scenario of one man only in command, but de facto the general secretary of the PCV he is the most influential figure in the country, even more so following the launch of the anti-corruption campaign.
THE powers of the President of the Vietnamese Republic instead they are accordion-like: when the Head of State is not secretary of the Party, he is a mostly ceremonial figure, although he can preside over meetings of the government and the National Security and Defense Council and is an ex-officio member of the politburo. Despite bringing with it many negative externalities, corruption in authoritarian states can sometimes be a driver of economic growth, incentivizing public managers to unlock investments and construction sites. In retaliation in Vietnam, the anti-corruption campaign has for some time been having the side effect of fueling fear among administration officials of signing even for the authorizations of private projects and commercial licenses. So far, the investigations have spared foreign companies but the bureaucratic delays and the uncertainty of the political scenario have generated wait-and-see and led in 2023 to a reduction in the rate of foreign direct investments (FDI) made compared to those recorded in the budget.
The Vietnamese GDP it has increased almost 6 times in the last thirty years but last year it missed the growth target set by the government by almost one and a half percentage points. However, Vietnam remains a very welcoming country for FDI, thanks to low interest rates and wages and state subsidies to open new factories. The vision underlying the Doi Moi, the economic reform plan that led Vietnam to open up to the market starting from 1986, is therefore not in question. But there is also a geopolitical aspect to consider in the underlying conflicts that the PCV is experiencing: the two removed vice prime ministers and the former president of the Republic Nguyen Xuan Phuc were pro-American while the recently deposed president Thuong was pro-Chinese like the general secretary of the Party Trong.
A courtship competition has been going on for years between Beijing and Washington in which the interested party, Vietnam, winks but pushes the ring away and in the meantime maximizes gifts and flattery. The country, despite being governed by a communist party, has various territorial disputes with China, its main trading partner, over the waters and islands of the South China Sea through which 30% of the planet’s goods transit and which these days is once again became an area of friction with the provocations of the Chinese coast guard towards the Philippine navy and the start of joint patrols between the USA, Japan, the Philippines and Australia. Furthermore, the Vietnamese still harbor resentment for the invasion, the last of a long series, suffered by their indispensable socialist ally in 1979. To the amazement of analysts, on 10 September 2023 the United States and Vietnam signed a strategic partnership globalization which raised the USA (the great loser of the Vietnam War) in one fell swoop by two levels, up to the rank of Russia and China, in the hierarchy of Vietnamese diplomatic relations. The sting of Vietnam was thus put to rest due to the withdrawal of the United States, at Trump’s behest, from the Trans-Pacific Partnership (a free trade agreement), after years of negotiations carried out by the Obama administration.
To join the treaty, Vietnam had to launch systemic reforms that were internally opposed and risky for its economy, only to be left at the altar together with the other 16 contracting parties (with which it later created the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This promotion of relations with Washington, awaited for over a decade, is a sign of strength towards Beijing with which Vietnam, always concerned not to irritate its neighbor, wanted to demonstrate that it can pursue its own agenda in the Indo-Pacific. The launch in January 2024 of strengthened cooperation with the Philippines for coastal patrolling and maritime security goes in this direction, to which is added the recent elevation of Japan to a global strategic partner. Vietnam, which has also become closer to India, Australia and South Korea, is developing an “omnidirectional” foreign policy, which is based on the diversification of commercial and diplomatic relations through – so far 18 – free trade agreements with regional powers and global. In addition, in recent years Vietnam has received economic support, military supplies and training from the United States to counterbalance Chinese interference.
But everything the US wants to get at would violate the “four nos” (not participating in military alliances, not siding with one country to act against another, not having foreign military bases, not using force or threatening to use it in international relations ) to which the Vietnam he remained faithful since 1991 to put an end to the long series of border skirmishes that had been going on with the Middle Country since 1979. However, the bond with Beijing remains strong. On 13 December last year at the end of a meeting between the general secretary of the Chinese Communist Party Xi Jinping and the Vietnamese prime minister Pham Minh, the two countries announced their commitment to intensify their cooperation on defense and security, in name of the common interest in avoiding hetero-directed transformations in a liberal sense of their regimes.
Since the times of South Vietnam, the population of Chinese origin has also been very influential by virtue of the “bamboo network”, the network of companies and entrepreneurs from China who operate abroad and constitute a huge share of the economies of South – East Asia. There is no wonder about these contradictions: bamboo always inspires Vietnam’s diplomacy, which is flexible and bends according to the wind. The hesitation, rather than a factor of weakness, is a qualifying point in the decision-making process of Vietnam, which is playing all its cards to remain a hinge country between the two superpowers. Suspended between repression and openness to the new, the country that embodies the contradiction must choose whether to become a maritime power or a continental one, whether to protect itself from land invasions or become master of its sea. But ultimately Vietnam knows, as an ancient Chinese adage goes, that “distant water will not quench nearby fire”. In April 2023, US Secretary of State Blinken, visiting Hanoi, predicted: “The sun is shining on our relations.” With this moonlight, who knows if the sun will rise again over Vietnam.
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