Vietnam: grappling with change

by Ben Bland.

The recent appointment of the prime minister’s son, 35-year-old Nguyen Thanh Nghi, as Vietnam’s youngest vice-minister has raised eyebrows in a regime that is struggling to attract the talent it needs to overcome a deepening economic crisis.

It is a depressingly familiar tale and comes just days after an investment firm headed by Nguyen Thanh Phuong, the prime minister’s daughter, moved into the banking sector with the support of one of the country’s biggest state-owned banks.

“These are brazen steps,” says one person close to the Communist Party’s old guard, disquieted by the way that under Nguyen Tan Dung, the prime minister, patronage politics is displacing the previous, more consensual system.

Central government has historically struggled to implement policy in Vietnam’s 63 diverse provinces. The country needs strong leadership, critics say, but there must be a level playing field for all.

Foreign diplomats and critics within the Party believe Dung has bolstered his position after winning a second term as prime minister this year by moving closer to top internal security officials. Like many Vietnamese journalists and civil society activists, they blame this alliance for a clampdown on free speech and public debate at a critical juncture for the country’s development.

As the problems mount, outspoken officials are breaking a major taboo by arguing that the ruling Communist Party must change to tackle the complex challenges of a twenty-first century, globally-integrated economy.

Do Minh Cuong, a professor who works on training initiatives at the Party’s secretive and highly influential Organisation Department, argued at a recent closed Party meeting on leadership that “if Bill Gates worked in Vietnam he wouldn’t even rise to be the head of a government department” because of rigid criteria for promotion that stifle talent.

“Previously, Vietnam developed by exploiting natural resources rather than using strategic thinking to understand how to develop stably,” he told beyondbrics, emphasising that these are his views as a researcher rather than the official Party stance.

Le Xuan Ba, director of the Central Institute for Economic Management, a government think-tank, agrees that Vietnamese officials need to develop a radically different approach.

“Economic restructuring should start with restructuring our minds,” he said at a government forum last month. “If we cling on to the old mentality, we can never change our growth model.”

Cuong says that while the private sector is getting much better at recruiting and retaining talented Vietnamese staff, including the thousands of graduates who return from universities in the West each year, the state sector and the Party are losing good people because they still “follow the old way of doing things and pay a low salary.”

He estimates that 17,000 people left the state for the private sector between 2009 and 2010 in search of better pay, more creative freedom and more supportive bosses.

Fiachra McCana, head of research at Ho Chi Minh City Securities, says that – as in Japan, where he used to work – Vietnam’s overly bureaucratic and consensus-driven political culture promotes deep-seated risk aversion.

“No one praises you for coming up with a brilliant idea as a bureaucrat,” he says. “But if you take a risk and anything goes wrong, your career is damaged. It’s really only in times of crisis that any form of radical reform becomes possible.”

While the UN, World Bank and other donors have provided hundreds of millions of dollars in “capacity building” funds, some observers believe that money is not enough.

“The Communist Party needs real democracy, not fake elections, if it is attract and develop the talented leaders we need for the future,” says one senior Communist who was forced out of his job at a state-controlled company because of his unconventionally open approach.