Political Transition in Vietnam
Since January 2021, Vietnam has undergone a transition of its senior political leadership. On April 5, 2021 at the 14th National Assembly, the Vietnam government finalized this transition for the 2021 to 2026 period.
Vietnam remains committed to using its longstanding “four pillars” leadership structure where political responsibilities are shared between the position of General Secretary of the Communist Party of Vietnam (CPV), President, Prime Minister and Chair of the National Assembly.
Nguyen Phu Trong was re-selected as the Communist Party Vietnam’s General Secretary in January 2021 while Nguyen Xuan Phuc, who had served as Vietnam’s Prime Minister from to 2016 to 2021, will take on the role President. Vietnam’s new Prime Minister is Pham Minh Chinh who previously was the Head of the Central Organizing Committee of the Communist Party of Vietnam and a Deputy Minister of Public Security. The final position of the “four pillars” is National Assembly Chair will be filled by Vuong Dinh Hue, a former Deputy Prime Minister and Minister of Finance.
The change in political leadership was not restricted to just the highest levels of the Vietnam Government. In addition to announcing the position of General Secretary, President, Prime Minister and Chair of the National Assembly, new appointees were made to the Politburo, Central Committee as well as at the ministerial and provincial level.
What does this leadership change mean?
The new government 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.
“Cadres” and “Public Servants.” While it presents a united face to the outside world, like many large organizations, the Vietnamese government 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. The new leadership structure would appear to keep these two groups in balance.
The new leadership group continues the tradition of Vietnamese senior leadership being drawn mainly from the northern provinces of Vietnam. With three of the four leaders coming from North Vietnam and one from Central Vietnam, Southern Vietnam which represents 44% of the total population and 58 percent of the national GDP will be without representation at the highest levels of government.
While women had traditionally held senior roles in the Communist Party of Vietnam as seen most recently by Nguyen Thi Kim Ngân holding the position of Chair of the National Assembly and the third ranked position in the Politburo, the current leadership no longer has female representation in the four pillars. The formal list of Central Committee and Politburo members when released will no doubt be reviewed to see if this is an isolated case or if this will be an ongoing structural issue.
While there had been some speculation that this transition in leadership would be the opportunity for the next generation of Vietnamese leaders, it would appear they will have to wait a little longer. With an average age of 67, the current senior leadership is 35 years older than its average citizen. While such a large age spread is not necessarily a negative, such a difference can pose a potential risk for leaders who can struggle to understand different generations. The CPV recognizes this and in the previous Central Committee, 43% of provincial party chiefs were under the age of 50. While the CPV understands the need to appoint a new generation of leaders, it appears that they have chosen to delay this process for five more years at the very highest levels.
One final risk that will have to monitored is the ongoing health of Vietnam’s leaders. As was seen by the death of President Tran Dai Quang in 2018, the age of the new leadership, and the rumours of previous health problems for Nguyen Phu Trong, it is possible that one of the four pillars may need to be replaced during their term.
Why is this change important?
As mentioned above, for foreign companies investing in Vietnam, this week’s leadership changes will not directly affect their business as the macro level policies will remain the same in the short term. The government will continue to focus on the promotion of economic growth, foreign investment attraction and keeping in place strong measures to continue to manage the COVID 19 pandemic. With the new leaders, 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.
Less well understood at this time will be the impact of the changes made at the ministerial and provincial government level because of new individuals taking on these roles. Understanding these leaders at the local levels will be particularly important for companies and organizations as this is where policies are implemented and enforced.
In the areas of foreign policy, Vietnam will look to avoid choosing between China and the United States while engaging through multilateral institutions such as ASEAN and the UN and with other middle power countries to provide strategic options. Vietnam will use recently signed multilateral trade agreements including the CPTPP, RCEP and the EU-Vietnam Free Trade Agreement to continue to expand its economy.
As always, social cohesion will remain the pre-eminent focus of the CPV. The current anti-corruption drive that was launched in 2016 by General Secretary Trong can be expected to continue however the accompanying “morality drive” may fade from view. The senior leaders of the CPV will continue to need to manage the expectations of the next generation of their own party and those of Vietnamese people who have come to expect the growing wages and jobs that have come with 6% GDP growth for the past 20 years.
In addition to its economic and social challenges, the “four pillars” also faces Vietnam’s ongoing environment challenges and the need to continue to balance Vietnam’s foreign policy concerns between the Eagle and the Dragon. While only time will tell if Vietnam’s new leadership can manage all these challenges and risks, its performance over the past 20 years suggest that Vietnam will continue to move forward.