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Vietnam eyes post-renovation era

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Vietnamese Prime Minister Nguyen Tan Dung attends last year's 25th ASEAN summit in Naypyitaw, Myanmar.   © Reuters

Next year marks 30 years since Vietnam adopted the "Doi Moi" or Renovation policies that led to the introduction of a market economy. The anniversary will coincide with a new top leadership team as the Communist Party chief, president, prime minister and chairman of the National Assembly are replaced. There will also be a generational change in the wider leadership as more than half the members of the politburo -- the top party body -- will step down.

     The impending political shakeup matters more than most. Vietnam stands at a crossroads in terms of its relationships with the U.S. and China, and its role in the global economy. How those issues play out -- and the development of the market economy itself -- will be crucially affected by the emerging balance of forces.

     The leadership change will not happen until 2016, when the National Congress of the Communist Party gathers for the first time since its last session in 2011 to initiate a series of elections for the top four posts, the 150-member central committee and the 16-member politburo.

     However, jockeying for position has clearly already begun among senior politburo members and among their supporters in the central committee, which will play an important role in the transition. Debates and voting patterns are largely secret, but some information does leak out through well-connected commentators -- notably Profiles of Power, a popular website that publishes confidential information on the proceedings of official bodies and the wealth of top leaders and their families.

     Vietnam's political elites have historically settled top personnel issues through private negotiations and compromise. But current political relationships appear more fraught. In early January, the central committee met for a week and for the first time held a confidence vote on the country's top 20 leaders. All are still in place. But the unprecedented vote was fueled by increasingly fierce intraparty squabbling between modernizers and conservatives, linked to a growing recognition that Vietnam needs leaders who can steer its next stage of development while also navigating a course between China and the U.S. in international affairs.

     It has long been thought that Prime Minister Nguyen Tan Dung, the leader of the modernizing faction, wants the job of general secretary, which in principle is the government's top leadership post. The conservatives have been trying for some time to bring him and his allies down.

     Indeed, Dung was the subject of a confidence vote in 2012, when conservatives tried to punish him for his purported role in the mismanagement -- and later bankruptcy -- of two state-owned shipping companies. Dung survived, but in a separate vote he received the lowest approval rate among top leaders that year.

     At the January session, Dung recovered his standing, boasting the highest approval rating among top officials, according to results leaked to Profiles of Power.

     While not a favorite among his politburo colleagues, Dung maintains an extensive patronage network in the government and private sectors, and enjoys the backing of the central committee. The leaked voting results indicate that he may be close to consolidating his power. Dung also holds the authority to choose his successor as prime minister from the six deputy prime ministers.

     Dung's rise and his brand of politics have altered Vietnam's political scene, helping transform the National Assembly over the past decade from a rubber-stamp organization to a more assertive body in which many members have shown an interest in holding officials to account for policies and actions.

Division among factions

However, many veteran politicians are wary of Dung's growing influence, blaming him for the gradual weakening of the party during his premiership. He is friendly toward business, supposedly pro-western, and seems comfortable with criticizing China and forging closer relations with the U.S.

     That makes him an anomaly, defying Vietnam's political apparatus. Even his protege, Deputy Prime Minister Vu Duc Dam, has drawn nudges and barbs from conservatives. Dam, a young, eloquent, western-educated technocrat, is rumored to be among Dung's picks to be the next prime minister.

     Dam would be a popular choice among Western observers of Vietnam, in part because of his proven managerial abilities. He has a track record of technical expertise and management in the telecommunications sector before taking on administrative positions in government.

     Meanwhile, political factions are becoming increasingly divided over how Vietnam should position itself -- politically, economically and geopolitically -- in the coming years.

     China's move last year to station an oil rig off Vietnam's coast forced Hanoi to rethink its approach to Beijing and to think carefully about how to manage what is seen as China's growing aggressiveness in the South China Sea.

     At the same time, Vietnam needs strong, competent leaders who can oversee the implementation of the planned Trans-Pacific Partnership -- a wide-ranging multilateral trade agreement being negotiated by 12 Asian and Pacific countries including the U.S., Japan, Vietnam and Australia -- but not China.

     There is a keen awareness among the elite that the success of the next wave of reforms hinges on further integrating Vietnam into the global supply chain and tapping into the greater market access -- including trade, investment and legal work -- that will flow from the TPP.

     If the modernizing faction led by Dung comes out on top, Vietnam will likely see a more open foreign and economic policy. The nation will probably move closer to the West, in particular the U.S, with which relations have improved significantly in recent years.

     Washington last year relaxed a ban on the sale of lethal weapons to Vietnam and has been assisting Hanoi in maritime security issues while helping with the negotiations on the TPP. Hanoi will not turn its back on Beijing. But the extent of its defense cooperation with the U.S. is one of the most hotly debated questions facing Vietnamese leaders.

     Many foreign diplomats with Vietnam experience say that while Dung may not be a genuine political reformer, he is bold, pragmatic and free of the ideological dogma that plagues many party officials. Foreign diplomats who monitor Vietnamese politics say Dung's rule may be the best scenario for Vietnam's future.

     There might also be a further opening up of Vietnamese society, every aspect of which is still in theory controlled by the Communist Party. The growing prevalence of social media and an emerging awareness of public opinion among the political elite has already made Vietnamese politics more open and dynamic. After the January central committee vote, prominent intellectuals such as Pham Chi Lan, an economist, called for the results to be published.

     But the conservatives have not given up. If they manage to retain power, more internal deadlock and indecision will hamper foreign policy. Most party stalwarts no longer have an illusion about China's ambitions in the South China Sea, yet they remain wary of contact with the West and of U.S. intentions towards Vietnam.

     For the first time since post-war Vietnam opened up to the world, the country's politics could shape regional affairs for years to come.

Phuong Nguyen is Research Associate in the Sumitro Chair for Southeast Asia Studies at the Center for Strategic and International Studies, Washington DC.

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