A hint of reforms in Vietnamese politics

David Koh, For The Straits Times

THIS year's Tet (New Year) celebrations in Vietnam have been buoyed by the hope of possible political reforms. At the fourth meeting of the Central Committee of the Communist Party of Vietnam (CPV) that ended on Dec 31, the general secretary warned that it must reform itself or perish.

The CPV, the only political party allowed in socialist Vietnam, must produce enough growth and development as well as political well-being for the people to feel that it deserves its political monopoly, which it inserted into the country's Constitution (Article Four) in 1992 as Eastern Europe's communist bloc was collapsing.

While the CPV was superb in persisting since 1986 with the now well known 'renovation' reforms, in recent years, macroeconomic troubles (high inflation and declining foreign direct investment), the slow rise up the world's economic ranks and worsening graft and debauchery among political and bureaucratic rank and file have raised the temperatures - and demands for political reforms.

Before the party's 11th National Congress in January last year, debates had already begun about repairing 'system errors'. A senior member said the party had always considered political reforms but wanted them to be appropriate and one step behind economic reforms so political stability would be maintained. In the next few years, he added, attention will turn to upgrading the system for promoting development goals.

An example of politics holding back economics is the poor performance of state-owned enterprises. With an incremental capital output ratio (a measure of the amount of capital needed to generate the next unit of output) of 7.8 from 2001-07, they compared badly with the private and foreign investment sectors, which had ratios of 3.2 and 5.2 respectively. State-owned enterprises drain huge amounts of money and are huge funnels for corruption among officials.

State-run shipbuilder Vinashin is an example of not just corruption but also of how it is not possible for companies to grow too quickly, using funding that it was unaccountable for. It is a result of a state capitalism ideology, the idea that socialist states can fund and run companies in the market economy and become engines of growth.

Although there are plans to reduce the number of state-owned enterprises and thus lower the budget burden, the government believes there is a limit to cuts as some state-owned enterprises such as Electricity of Vietnam are subsidising public energy consumption. But this does not explain why state-owned enterprises should diversify quickly and take risky positions, such as in real estate speculation.

In his New Year message, Prime Minister Nguyen Tan Dung admitted that business interests hugely influence policymaking, implying that curbing such influences would be desirable. Most people would welcome this, but this may not dovetail with creating industries to compete with foreign enterprises and will pose a tough balancing act for the government.

It has also become clearer what could be on the table for constitutional reforms. Human rights, understood as basic material rights, are part of the agenda, along with limits on some state powers over individuals, like protection of the accused.

There are debates on how the Constitution should promote the functions of as well as clearly set out the limits to the powers of state institutions - the National Assembly, the government and the judiciary. There have been debates on increasing the government's powers relative to those of the other branches. A judiciary review court is being discussed, with some preferring the French model but others feeling that this could politicise the court system and should be discouraged for the sake of effective governance.

But whether such a court has jurisdiction over decisions by the CPV is likely to be the most controversial and least debated topic because of its sensitivity. Article Four has long been the bane of critics who think the party has too much power and is above the state, with top leaders unable to control provincial fiefdoms. While removing Article Four is virtually impossible, critics have proposed articulating it into a law with specific provisions on the CPV's powers and responsibilities so that the clarity creates boundaries.

The current general secretary might leave a positive legacy in this area. Long seen as pedantic and professorial, Mr Nguyen Phu Trong has never quite impressed his peers with decisiveness or going beyond the conventional. Chosen because he lives a spotless life and could steady a ship, he is now holding the flag while the party and country are at a crossroads. There are only thoughts but no concrete plans or road maps yet. Getting rid of Article Four is probably not in the cards nor is the party likely to curb its own powers. The ultimate test is in implementation, the weakest point in Vietnam's governance.

Likely political reforms are a revised Constitution with greater human rights provisions, clearer delineation of roles and limits of organs of state, and, perhaps, a formalised document - a new social compact - stating the limits of party power. And possibly even allowing greater competition and selection of top party officials based on merit. The course of a truly great nation will never run smooth and it would be enjoyable to listen to a healthily and robustly conducted debate that belies a communist country.

The writer is a senior fellow at the Institute of Southeast Asian Studies.