Work Cut Out for Vietnam’s New Prime Minister

New, ambitious goals for Vietnam’s socio-economic development plans. And the advancement of the man set to be the next prime minister, Mr Pham Minh Chinh, to guide these plans to fruition – never mind his lack of economic management experience at the national level.

These were the outcomes of the five-yearly 13th National Congress of the Communist Party of Vietnam (CPV), which wrapped up earlier this month. 

It adopted the ambitious plan of turning Vietnam into an upper-middle income economy by 2030 and a high-income developed economy by 2045. Towards these goals, the party aims to achieve an average economic growth rate of 6.5 to 7 per cent in the next five years.

This is not the first time the party has set ambitious goals for its socio-economic development plans. At its eighth National Congress in 1996, the party envisioned Vietnam to become an industrialised economy by 2020. However, at the 12th gathering in 2016, the party acknowledged its failure to achieve this goal. 

Although Vietnam’s current economic foundation is much more solid than 25 years ago, turning the country into a high-income developed economy is no small task for the party. Since the end of World War II, only a few countries, most notably Singapore and South Korea, were able to transform themselves into developed economies.

To join their ranks, Vietnam will have to transition its growth model from a resource and labour-based model to one driven by high technology and innovation. At the same time, the country will have to invest more in human capital and improve its human development indicators. 

There have been positive steps towards this, including the government’s strong push for the digital economy, increased investment in R&D, and Vietnamese companies’ deepening participation in the hi-tech manufacturing sector. 

Need for a Strong Team
However, above all, the country needs a team of capable leaders with strong governing capabilities to deliver on their policies.

As expected, the 13th Congress decided to extend General Secretary Nguyen Phu Trong’s stewardship for an unprecedented third term.

Meanwhile, rankings in the newly elected 13th Politburo – the country’s highest decision-making body – suggest that Prime Minister Nguyen Xuan Phuc will be elevated to state president. Rising star Mr Chinh, 62, who is currently party organisation chief, will take over the position of prime minister, and former Deputy Prime Minister Vuong Dinh Hue will become the new chair of the National Assembly. 

These state and government positions will be officially confirmed at the first session of the new National Assembly in July.

While 76-year-old Mr Trong, as the party head, mainly takes care of overall policy direction and party issues, the president and the National Assembly chair are mostly ceremonial positions with little influence over policy implementation. 

As such, all eyes are now on Mr Chinh. As the next prime minister, he will be the man to put into effect the ambitious development plans for at least the next five years.

Mr Chinh has a police background, having been a former lieutenant general and deputy minister in the Ministry of Public Security before turning civilian in 2011. 

His governance experience was limited to his tenure as the party secretary of Quang Ninh Province from 2011 to 2015. Given his lack of economic management experience at the central level, many people doubt his ability to deliver in his new role.

However, Mr Chinh has a positive record in Quang Ninh, where he helped transform the local economy by building high-quality infrastructure, developing the tourism industry and diversifying its economy beyond tourism and coal mining to manufacturing. 

Rather than being a hindrance, his lack of national economic management experience may act as a spur to push for bolder reforms to dispel public scepticism about his abilities.

Another major challenge for Mr Chinh and his incoming government is the increasing global volatility generated by the Covid-19 pandemic and intensifying US–China strategic competition. Such volatility may disrupt Vietnam’s growth, given that its economy is highly dependent on foreign trade and investment. 

And his record in Quang Ninh shows he is not averse to major initiatives – he oversaw the party’s pilot project of merging party and government institutions of similar functions to reduce government size and raise efficiency. Mr Chinh is also known as a strong proponent of special economic zones. 

Challenges Ahead
That said, managing the national economy is vastly different from running a provincial economy. Delivering consistent and robust economic growth will require, among other things, stronger governance capabilities. 

Mr Trong’s extended tenure as party leader for an unprecedented third term means that his signature anti-graft campaign will continue. Corruption remains rampant at lower government levels, where the party’s ability to detect and punish crooked officials is much weaker.

The party has also failed to create a meritocratic environment to attract the best and brightest into its ranks. 

Meanwhile, despite the experiments in Quang Ninh, efforts to make the administrative system leaner and more efficient have been slow, potentially hobbling Vietnam’s ability to hit its development targets.

Another major challenge for Mr Chinh and his incoming government is the increasing global volatility generated by the Covid-19 pandemic and intensifying US–China strategic competition. Such volatility may disrupt Vietnam’s growth, given that its economy is highly dependent on foreign trade and investment. 

To achieve its high-income status by 2045, Vietnam will need to create a solid foundation for the transition in the next five to 10 years. One thing it needs to do is to strengthen local conglomerates, especially in the manufacturing sector, to become more self-reliant and less vulnerable to external disruptions.

There is a lot riding on Mr Chinh’s success as prime minister. If he succeeds, the Communist Party of Vietnam and its 13th National Congress should be congratulated for making the unorthodox decision to give the country’s most important economic job to a former cop.

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