John McCarthy
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Vietnam - What's happening?

John McCarthy is a former Australian Ambassador to Vietnam, Mexico, Thailand, the United States, Indonesia and Japan and High Commissioner to India.  His assignments in the Department of Foreign Affairs and Trade (DFAT) in Australia included Chief of Staff, Chief Legal Officer and Deputy Secretary.  John is currently Vice-Chancellor's Fellow at the University of Melbourne and Senior Adviser, Mitsubishi Materials Corporation.


In discussing Vietnamese politics, the commentariat falls back on the word “opaque”. This usually means that it does not know what is happening.

The term is resurfacing in the wake of the resignation on 19 March of Vietnam’s President, Vo Van THUONG.

Thuong was fired for alleged “violations and shortcomings “which left a “bad mark on the reputation of the Communist party.”

Thuong’s” shortcomings” need to be seen in the context of the long-running anti- corruption campaign spearheaded by the Party’s secretary-general, Nguyen Phu TRONG. Trong is head of the Politburo and No1 in the Vietnamese system.

Thuong’s downfall alone would be a story. However, it is compounded by the fact that his predecessor as President - Nguyen Xuan PHUC - formerly a successful Prime Minister - had also been compelled to resign.

At that time there was inevitably speculation about the reason for the purge. One view was that it was indeed about corruption. Another view was that many of those penalised were the victims of factional fighting - with Trong pushing out his political rivals.

However, Vietnam’s leadership issues probably derive both from matters genuinely linked to corruption and factional fighting. The two are not mutually exclusive.

Corruption is a massive problem in Vietnam. It makes political sense to try to deal with it. The reasons given for the exit of so many top leaders are plausible.

But no political system - including communist ones - is free from factional fighting. A difference is that factions in the United States, the United Kingdom or Australia do their fighting in the open. The Vietnamese do it in secret.

There has also been a view that there are divisions in Hanoi between those who lean towards China and those who espouse Vietnam’s opening to the rest of the world.

Those associated more with the party are sometimes portrayed as closer to China while those associated with government can be seen to tilt more towards the west.

Again, such differences would not be surprising. Outlooks do vary. The Vietnamese are nervous about China. Defence ties with the west help bolster Vietnam’s security. Its economic growth will continue to depend on the west and major regional economies. But it does not want to provoke China.

But differences of approach are not stark divisions. In the end the Vietnamese leadership tend to agree on foreign policy decisions and to stick with them. If one tenet is central to their world view, it is the importance of balance.

In a system which tends to grade relationships by tier, Vietnam has in recent months raised the level of its relationships with the United States, Japan, Korea and Australia to the highest tier of “Comprehensive Strategic Partnership”. This is a level previously accorded to only China, Russia and India with whom Vietnam has had longstanding close relationships (albeit a fractious one with China).

These diplomatic steps by Vietnam are closely tied to its economic and technological aspirations. But lest anyone doubt Vietnam’s adherence to balance, President Xi made a major state visit to Vietnam during a period when a flurry of relationship upgrades were concluded with the United States, Japan and Australia.

So what next?

Vietnam’s leadership tussles are not likely to disappear before the election of a new central committee and politburo in 2026. But Trong’s successor will not be a strongman like President Xi. The tradition of collective leadership is too established.

The recent infighting looks bad and affects international economic confidence. The very fact of the longstanding anti-corruption campaign - intended to safeguard party health and popularity - also makes both officialdom and the business community jumpy.

This nervousness in turn jams up the decision-making process necessary to permit a freer flow of domestic and foreign investment.

And we should not make the mistake of thinking that the government is communist-lite. It is a serious Marxist Leninist state. Its bureaucracy is sclerotic and its security apparatus is rough.

But Vietnam is now a country of 100 million. The analysts do not doubt Vietnam’s economic fundamentals. According to the IMF, its per capita GDP - both in PPP and nominal terms - is above that of the Philippines not far below that of Indonesia.

If Vietnam can push ahead with a major economic reform program as it did with the ground breaking Doi Moi (literally “Restoration”) program in the late eighties, its economic prospects could be good. We should deal with it accordingly.

There is little reason to see any of the recent leadership developments much affecting Vietnam’s foreign policy. Factionalism has not had a major impact on external policy in recent years and the Vietnamese will continue to adhere to the concept of balance. It makes no sense for the west to try to tilt Vietnam towards us or against China. They will simply not do this.

In the end it is in the western interest to deal with the Vietnamese as they are not as we might like them to be.


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