Need to Know

March 13, 2023

Blazing Furnace

Vietnam

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Vietnamese lawmakers elected Vo Van Thuong as the Southeast Asian country’s new president in early March, almost two months after his predecessor, Nguyen Xuan Phuc, was ousted due to a string of corruption scandals stemming from the coronavirus pandemic.

Officials allegedly bilked expatriate Vietnamese citizens seeking to return home out of $200 million. Tech company Viet A Technology allegedly colluded to price gouge when selling its Covid-19 testing kits, garnering $172 million. These scandals, moreover, occurred in parallel with more routine but equally nefarious graft, like car registry employees demanding bribes, as Radio Free Asia noted.

Numerous government officials have been fired or arrested due to corruption in recent months, the Diplomat wrote. As the Sydney Morning Herald explained, however, Phuc was the “biggest scalp” claimed during an anti-corruption crackdown that officials have described as a “blazing furnace” that will melt away the impurities plaguing the nation.

Last year, when the “blazing furnace” crackdown resulted in the arrests of top executives, corporate stocks in Vietnam lost $40 billion in value, Reuters wrote. Now, foreign investors who have been key to Vietnam’s economic rise over the years said Thuong’s appointment would herald a period of stability. But those sentiments might be overly optimistic. Many Vietnamese citizens, for example, are skeptical that the new president’s administration can really stamp out corruption.

Speaking in Hanoi, Lam Kieu Loan, who used to work for the pharmaceuticals industry, told Voice of America that Thuong’s team might root out corruption among its rivals, but she didn’t think the new president would prosecute his allies. “It is more like internal cleansing than taking action against corruption,” she said. “Indeed, many people stood up to tell the truth and were punished before these removals. However, this case looks like the factions annihilate each other, and escape justice rather than actually investigate and tackle corruption.”

Others question if the politics of Thuong’s rise will really benefit Vietnam. The youngest leader in the Communist Party of Vietnam’s Politburo – the country is a one-party state – Thuong has close ties to General Secretary Nguyen Phu Trong, a political boss and conservative, doctrinaire communist who has been driving the anti-corruption campaign, reported CNN. Trong might be as interested in ideological purity as he is in good governance.

As the BBC contended in an analysis, “Trong, who was given an unprecedented third term at last year’s party congress, appears to be consolidating his authority by ousting senior officials seen as more pro-Western and pro-business.”

Thuong and Trong might want to make sure their blazing furnace doesn’t get too hot.

This story originally appeared in the March 13, 2023 newsletter, Blazing Furnace.