Politics of Vietnam in 2023: Politics & Election Tracking

After Vietnam gained independence in 1945, the government split into a communist-backed North Vietnamese government and a U.S.-backed South Vietnamese government. Ultimately, the civil war ended with a North Vietnamese victory in 1975 and established Communist Party rule over all of Vietnam. Subsequently, in 1978, Vietnam launched an aggression against Cambodia on the grounds of national security, and the Chinese government responded by invading Vietnam.

This series of events made Vietnam have very little contact with the Western world, and its economy and domestic political stability depended heavily on the Soviet government. It was not until the Vietnamese government launched the reform and opening up policy in 1986 that Vietnam began to increase political and trade exchanges with other countries, and made more progress after joining the World Trade Organization in 2007.

In recent years, as many enterprises in advanced countries have transferred many labor-intensive manufacturing industries to Vietnam due to cost considerations, Vietnam received more than US$1.5 trillion in foreign direct investment between 2010 and 2019. In recent years, considerations such as the Sino-US trade war, China’s continued zero-clearing policy, and improving supply chain resilience have also led more companies to shift investment to Southeast Asian countries and India.

Vietnam, which has relatively advantages in trade agreements, labor costs and infrastructure construction, has consolidated its position in undertaking these capital investments and has become the main beneficiary country in this wave, which has greatly stimulated Vietnam’s economic development. It is one of the fastest growing countries in ASEAN and even in the world.

However, corruption, the business environment, continued privatization and infrastructure are still unresolved issues in the country. As far as corruption is concerned, although the ten-year anti-corruption strategy plan launched in 2019 resulted in the punishment of more than 160,000 party members and the conviction of more than 7,000 party members, institutional factors still exist, so corruption persists . Nguyen Phu Trong, who will be re-elected for the third time in 2021, said in a speech broadcast on Vietnamese national television in October 2022 that he will continue to increase efforts to combat corruption.

As can be seen from Vietnam’s five-year plan, the current policy focus of the Vietnamese government will continue to focus on market liberalization and reduce government intervention in business, markets and the overall economy. There are not only political elements to this move, such as incentivizing foreign investment through greater market freedom, but also operational considerations. In Vietnam, so-called state-owned enterprises account for 30 percent of the state budget and 28 percent of GDP, and are also responsible for 60 percent of the country’s non-performing loans.

Based on the remarkable success of the Vietnamese government in trade and investment agreements, its follow-up policies will also increase productivity, especially labor supply, land supply and industrial infrastructure. Especially for land supply, the Vietnamese government also stated that it will reform land use, even foreign ownership (currently only restricting 50-year use rights, and lack of clear mechanisms and regulations on transactions), and provide new means of control.