Intra-party rivals may pull him down
Prime Minster Nguyen Tan Dung's
grip on Vietnam's government is weakening. The Vietnamese premier is under
attack by intra-party rivals who don't like his rich friends and fault his
management of the economy. If Dung goes down, important changes in Vietnam's
management of economic and social issues are likely to follow.
As a rule, Vietnam's Communist
Party doesn't wash its dirty linen in public. Its spokesmen work hard to
maintain the party's aura of competence and infallibility. Party members don't
gossip with outsiders about party matters. Decisions made by the party's
Politburo or its Central Committee are portrayed as unanimous.
Article 4 of Vietnam's
constitution is very clear about the Communist Party's monopoly of political
power: the CPV "is the force assuming leadership of the State and
society." About one Vietnamese in 30 -- some 3 million altogether -- are
members. There are party committees in every village and every city
neighborhood.
The CPV renews its leadership at
party congresses that cap months of alliance-mending and horse-trading.
Typically this is not a winner-take-all event, but rather one that aims at
updating the internal balance among factions and interests while retiring aging
leaders bloodlessly.
In the run-up to the 11th Congress
held early last year, according to diplomats and a number of Western academics,
senior party official Truong Tan Sang mounted a vigorous bid to supplant Dung
as prime minister. He failed and the congress granted Dung a second five-year
term. Sang's consolation prize was the largely ceremonial post of president.
National Assembly chairman Nguyen Phu Trong was named CPV general secretary.
Now there are signs that Sang and
Trong are maneuvering to break Dung's grip on the levers of policy and
patronage. The two can point to a lengthening list of mishaps and failures.
They can channel public exasperation with bouts of inflation and the excesses
of the nation's nouveau riche.
Many years have passed since the
CPV led victorious wars, first against France, Vietnam's colonial master, and
then against a rival southern regime heavily backed by the United States. For a
new generation, the party's claim to lead rests heavily on its ability to
deliver social stability and economic growth. It succeeded brilliantly after
its 1986 decision to implement "market socialism" -- policies which
under the general term doi moi or "renovation" gave birth to a
thriving private sector and Vietnam's emergence as one of the world's
workshops.
National income grew at an annual
rate of seven percent for two decades, quintupling per capita incomes and
planting the notion that any smart and adaptable young person could prosper.
In recent years, however, growing
pains have become evident. In his National Day message on September 2, President
Sang frankly acknowledged some of them:
“Our economic development is
unsustainable and the balance of our macro economy unstable, while the quality
of the growth rate, productivity, efficiency and economic competitiveness
remains low,” he said. “Coupled by these weaknesses is the limitation in
mobilization and effective use of available resources for development. Our
economic growth tends to develop widely, though not deeply.”
Regarding culture and society, he
continued, “there remain many challenges, some of which have become hot topics.
The environment is polluted…Limitations in the quality of human resources and
infrastructure hinder our development. There remain many hidden factors that
can potentially cause political and social instability and threaten our
national sovereignty.”
Most foreign financial analysts
would endorse Sang's critique. At least since Fitch Ratings slashed Vietnam's
credit rating in July 2010, citing "deterioration in the nation’s finances
and a banking system increasingly vulnerable to systemic stress," analysts
have tended to be bearish on their one-time favorite.
Dung's critics, domestic and
foreign, single out his failure to bring the managers of state-owned
enterprises to heel. The prime minister was much taken by the notion that
Vietnam could become world-competitive in sectors such as coal and minerals,
oil and gas, shipping and shipbuilding. Large loans by state-controlled banks
were channeled to state companies in these sectors, which, though reorganized
as conglomerate monopolies, preserved a corporate culture and bloated payroll
reminiscent of Soviet heavy industry.
These companies expanded rapidly
and then, overextended, were hammered by the 2007-09 global financial crisis.
The shipbuilding corporation Vinashin required rescue in July 2010. Two years
later the giant state shipping company and port operator, Vinalines, was
failing under a similar mountain of debt.
These two conglomerates are just
the standouts. Most state-owned firms are deeply indebted to the nation's
banks, both state-owned and private, which with government encouragement
flooded them with funds, particularly in 2009. Hanoi sought to avoid a recession
by expanding credit. It got instead a vicious bout of inflation that is only
now being brought under control. Meanwhile, bad debts on banking sector books
are unofficially estimated now to be ten percent or more of total loans.
Nor were the banks victims. They
were collaborators, as is becoming particularly clear in the wake of the August
18 arrest of Nguyen Duc Kien, a banking and finance tycoon known as a confidant
of the prime minister. Though formal charges are still pending, Kien is said to
have engaged in "illegal trades."
The general feeling in the
financial sector is that Kien is hardly unique; in fact, the sort of very
highly leveraged deals that he favored are said to be common in Vietnam's
interlocked, thinly capitalized and remarkably opaque financial markets.
"Misconduct is …a generalized characteristic of [Vietnam's] financial
institutions large and small," said Jonathan Pincus. Pincus in particular
should know -- he and his colleagues at the Harvard Kennedy School Vietnam Program
have been advisors to Dung's government for years. Their advice has been
listened to politely and then largely ignored.
Another strand in the web that
seems to be tightening around the prime minister is the Politburo's decision,
announced in June, to transfer institutional responsibility for combating
corruption from the government to the party itself. This lines up nicely with a
party internal criticism and self-criticism campaign that was launched in
February to identify and weed out members exhibiting "degraded political
ideology, ethics and lifestyles."
A last bit of circumstantial
evidence is provided by the remarkable rise of an online blog that calls itself
Quanlambao and says its mission is to "wipe out corrupt cliques that
monopolize the nation's economic and political life." The blog's authors
are unknown, its tone is stridently populist, and its stock in trade is
blistering Prime Minister Dung and his close associates -- in particular
retired police general Nguyen Van Huong, identified by the blog as Dung's chief
agent for dirty tricks.
The Quanlambao blog first
appeared in early June. By mid-July, it was reporting 10,000 "new
visitors" daily. It was the first to break news of the banker Nguyen Duc
Kien's arrest, twelve hours before the National Police made their own
announcement. In the next 10 days, daily hits on Quanlambao reached just short
of a million, an unheard of level in Vietnam's blogosphere.
Inevitably, the appearance of
this remarkable blog and the apparent failure of the agency charged with such
things to take "counter-measures" has prompted speculation that the
people behind it are intraparty enemies of Dung or Chinese intelligence
services, or perhaps both.
What might follow if these
diverse phenomena do in fact foreshadow an attempt to remove Nguyen Tan Dung as
Prime Minister?
To oust Dung, his critics would
have to muster a majority of the 14 member Politburo which in turn would have
to be confirmed by a vote of the party's Central Committee, a 175 member,
broadly representative group. That would be a seismic event -- turnovers of
power normally come in the course of party congresses held every fifth year.
Nor is it at all sure that Dung's critics could prevail in a showdown. Many of
the party elite owe their positions to the patronage of the prime minister and
his allies.
In this scenario, Dung's
opposition would portray themselves as reformers determined to rein in
corruption and influence-peddling. Their common conviction would seem to be
that "instability" will follow if the party and government cannot
restore ordinary citizen's belief in the essential decency of the regime, in
its ability to manage economic challenges and to distribute the fruits of
growth fairly.
Instability is their bete noire
-- it means to CPV leaders political protest that is organized outside of
regime control and turns against the party. Though the Vietnamese have watched
developments in Burma with interest bordering on amazement, Dung's ouster would
not presage a loosening of political controls. The opposite is more likely --
both Sang and Trong are regarded as conservatives, leaders who see the notion
of political "opening" as a Western-sponsored plot to overthrow the
leadership of the Communist Party.
David Brown
(David Brown is a retired US diplomat with wide experience in Southeast
Asia, particularly Vietnam.)
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