Political Transition in Vietnam
On January 30, 2021, the Communist Party of Vietnam (CPV) announced that Nguyen Phu Trong would continue as General Secretary for an unprecedented third term. This move was telegraphed earlier in the week when delegates at the 13th National Congress granted him an eligibility waiver. General Secretary Trong had required the waiver under CPV rules as he already served two terms in the role of General Secretary and was over the age of 65.
In addition to announcing the position of General Secretary, new appointees were made to the 200-person Central Committee which in turn elected members to the Politburo, the Secretariat, and the Inspection Commission.
What happens next?
With the selection of the Nguyen Phu Tong as General Secretary now complete, the CPV will now begin the process of selecting a State President, Prime Minister and National Assembly Chair. These positions will all be filled in May when the next meeting of the National Assembly is expected to be held. Once a new Prime Minister has been selected, that individual will propose new cabinet ministers to the National Assembly for their approval.
What does this leadership change mean?
The new CPV leadership can be expected to continue with the existing policies of their predecessors in the areas of economic growth, foreign investment attraction and keeping in place strong measures to continue to manage the COVID 19 pandemic. In the areas of foreign policy, Vietnam will look to avoid choosing between China and the United States while engaging with multilateral institutions such as ASEAN and the UN to act as a balance between these two behemoths.
“Cadres” and “Public Servants.” While it presents a united face to the outside world, like many large organizations, the CPV consists of numerous groups and factions. The two largest and most influential factions can be best described as the “Cadres” and the “Public Servants”. While all senior members of the Vietnamese government must be members of the CPV, the “Cadres” members tend to come up through the Communist Party apparatus while the “Public Servants” have risen through executive government positions. In reviewing the newly announced Politburo it would appear that these two groups have been kept in rough balance.
Women have traditionally held senior roles in the Communist Party of Vietnam as seen most recently by Nguyễn Thị Kim Ngân holding the position of Chair of the National Assembly and the third ranked position in the Politburo, however the newly announced Politburo has only 1 woman out of 18 members while the Central Committee has 18 women out of 200 members. It seems possible that Vietnam will no longer have female representation in one of the “four pillars” positions.
One risk that will need to monitored is the ongoing health of Vietnam’s senior leadership. As was seen by the death of President Tran Dai Quang in 2018, and the previous rumours of health problems for General Secretary Trong, it is possible that poor health could impact the Vietnam leadership especially if Vietnam chooses to select older members of the Politburo to the “four pillars” positions.
Finally, under the current General Secretary, companies should not expect there to be any significant changes in Vietnam’s standards of rule-of-law or the Communist Party’s control over the courts. This is especially relevant as the General Secretary has recommitted to fighting corruption saying, "The war to fight and prevent corruption will not stop, will not rest and have no restricted areas, no matter who it involves."
As we wait for May, we can anticipate that this week’s leadership continuation will not directly Vietnam’s macro level policies. Barring a surprise announcement for the rest of the “four pillars”, we can expect more of the same from Vietnam for the next couple of years. Companies looking to diversify their operations in Asia will continue to be attracted the low-cost labour, the growing population, and the overall stability that Vietnam has to offer.