Two Presidents Ousted in One Year: What Lies Ahead for Vietnam’s Political Outlook?

The Central Committee of the Communist Party of Vietnam (CPV) made an announcement today that it had accepted President Vo Van Thuong’s resignation from all official and party positions. Tomorrow, Vietnam’s National Assembly will convene an extraordinary session to officially vote on his resignation, just one year into his presidency. Thuong is understood to be involved in a bribery scandal related to local real estate developer Phuc Son, which is currently being prosecuted on different corruption charges. Unofficial but reliable sources have indicated that during the time he was still serving as Party Secretary of Quang Ngai Province (2011-14), one of Thuong’s relatives received VND60 billion (US$2.4 million at current exchange rates) from Phuc Son, allegedly for Thuong to build his ancestral shrine.

Thuong’s resignation marks the beginning of a new phase of political uncertainty in Vietnam. Since the CPV’s 13th National Congress in early 2021, there have been numerous high-profile dismissals and prosecutions, including four Politburo members (including Thuong and his predecessor Nguyen Xuan Phuc), a deputy prime minister, two ministers, and over a dozen provincial leaders. The swift replacement of presidents is particularly noteworthy, as Phuc was also removed from office after less than two years in early 2023.

Like Phuc’s, Thuong’s departure will not result in significant policy shifts. But it has raised concerns among investors. Many of these investors were drawn to Vietnam precisely because of its relatively stable political climate compared to other countries in the region. However, the news of Thuong’s pending departure has added to their unease. To make matters worse, General Secretary Nguyen Phu Trong’s poor health and the uncertainty surrounding his succession plan will likely intensify political infighting leading up to the next CPV National Congress in early 2026. This will further exacerbate investors’ concerns.

The implications of Thuong’s downfall for Vietnam’s political future, particularly in the race for General Secretary Nguyen Phu Trong’s replacement, hinges on who will fill Thuong’s role. According to the Party’s regulations, the new president must have served a full term as a member of the Politburo, meaning that potential contenders now include Trong, Prime Minister Pham Minh Chinh, National Assembly Chair Vuong Dinh Hue, Standing Member of the CPV Secretariat Truong Thi Mai, and Minister of Public Security To Lam. Trong, who previously held the position of president from 2018 to 2021, may reclaim it, but his health issues could be a significant impediment. Chinh and Hue are unlikely to be interested, as their current positions hold more power than the presidency. This leaves To Lam and Mai as the most probable options.

At 66 years old, Lam may have a strong interest in the position as it could potentially allow him to seek an exception to the Party’s age limit rule and run for the top job in 2026. However, he may also have reservations about making the switch to this new role. His current position as minister of public security is extremely powerful, particularly in the context of the CPV’s ongoing anti-corruption campaign. In contrast, the role of the president primarily involves ceremonial duties. On the other hand, Mai is also a viable candidate for the position, especially in the eyes of those competing for the role of general secretary. This is due to her relatively weak power base, meaning that she will unlikely be able to leverage the presidency as a means to compete for the Party’s top job in 2026.

Another option would be for the Party to bend its own rules and nominate a different politician who has not yet completed a full term as a Politburo member, but who could potentially bring stability to the system. In this scenario, potential candidates could include Ho Chi Minh City Party Secretary Nguyen Van Nen or Minister of Defence Phan Van Giang. However, the current potential candidates to replace Trong and their respective camps may not support this decision as they do not want to see the emergence of a new and viable contender that could potentially hinder their own aspirations for the Party’s top job in 2026.

Due to the intricate selection process and limited timeframe, it is highly probable that the Party has not yet come to a unanimous decision on Thuong’s successor. If this is the case, Vice President Vo Thi Anh Xuan will assume the role of acting president until a final decision can be reached by the Party.

Against this backdrop, the political uncertainties in Vietnam are expected to continue. Some investors may decide to wait until the dust is settled before making any major investment decisions. The country’s foreign relations may also be affected, with potential delays or cancellations of high-level bilateral exchanges. For instance, due to Thuong’s pending removal, a visit to Vietnam by King Willem-Alexander and Queen Máxima of the Netherlands, which was scheduled for 19 to 22 March, has been postponed at Vietnam’s request.

…the political uncertainties in Vietnam are expected to continue. Some investors may decide to wait until the dust is settled before making any major investment decisions. The country’s foreign relations may also be affected, with potential delays or cancellations of high-level bilateral exchanges.

Even after the new president is elected, political infighting will likely persist until 2026 unless a clear succession plan for Trong is announced. In the meantime, investors and Vietnam’s partners will have to live with the country’s new political realities.

The CPV and its top leadership may wish to mitigate the uncertainties by expediting the power transition process and electing a new president who can safely serve out his or her term until 2026. This should be their primary focus now. At the same time, improving the investment climate through streamlining bureaucratic procedures, enhancing decision-making efficiency, and removing legal and regulatory barriers for investors should be prioritised to counteract the political uncertainties and restore investors’ confidence in the country’s political and economic prospects.

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