Despite political turmoil, Vietnam is worth the risk of doing business

In two separate battles more than 1,000 years ago, Vietnamese forces used sharp stakes hidden in the Bach Dinh River to defeat oncoming Chinese naval attacks. The recent upheaval in Vietnam could make one think those stakes are being diverted to remove political leaders.

In quick succession over the past few weeks, two talented and long-serving deputy prime ministers have been sacked from their positions, one of them a member of the Politburo. And on January 17, President Nguyen Xuan Phuc, another member of the Politburo and the party’s Central Committee and chairman of the National Defense and Security Council, announced in an unprecedented turn of events that he would be moving from his normal five-year term. He resigned after just two years. semester. Vice President Vo Thi Anh Xuan will serve as acting president until a new president is elected.

While this turmoil in party leadership may seem quite sudden from the outside, these resignations have been carefully coordinated for some time and are part of a broader and overdue anti-corruption effort. But even the best intentions, such as cleaning up corruption, can have unintended consequences if they are mistaken for instability by foreign interests.

The anti-corruption campaign was founded by General Secretary Nguyen Phu Trong in 2016 when Phuc became prime minister. Since 2021, the Politburo and the Party have reprimanded about 70 officials, including five ministers and former ministers, as part of a corruption investigation involving nearly 5,000 people. Hook resigned after several high-ranking officials were found to have committed violations regarding COVID-19 test kits and the repatriation flight scandal.

Government accountability, especially at the highest levels, is a good thing. It could even be argued that America could benefit from a higher level of accountability between the two parties. It can look intimidating to outsiders, including

For years, Phuc has been Vietnam’s face to foreign investors and diplomats around the world, improving relations with the United States and overseeing one of the world’s fastest growing economies. played a role as In 2022, Vietnam will record its fastest economic expansion in 25 years, with GDP growth surpassing her 8%, making it America’s seventh largest trading partner.

Will Western diplomats and businesses continue to enjoy the warm welcome that drew them to Vietnam in the first place? Will Vietnam’s new leadership take a tougher stance toward the West? The straightforward answers are yes and no, respectively.

To the casual observer the concerns are understandable, but as a 30-year career diplomat with particular expertise in Vietnam, I get a clear message of how deeply Vietnam respects its relations with the West, especially the United States. to see These recent departures appear to have been carefully designed not to be punishments for forging closer ties with the West or promoting reforms within Vietnam. and aimed to foster greater accountability within its political system.

Ensuring a stable and reliable business environment and improving accountability from the government is what investors are looking for in Vietnam’s leadership as more manufacturing moves to Vietnam. In addition, it is equally essential to communicate well with foreign governments and business so that they understand what is happening and why.

There will be more changes to the Vietnamese government in the coming months, including the election of a new president. With no cautious government employees in new positions in 2023, businesses should be prepared for a slowdown in the decision-making process.

Despite headwinds in 2023, Vietnam is still expected to grow by up to 6.5% this year. These achievements cannot be achieved without international trade and investment, especially with Western countries. The party’s greatest pressure comes not from outside forces or neighbors, but from its internal need for continued growth and prosperity that depends on foreign trade and investment. In addition, Japan systematically participates in regional free trade agreements such as advanced agreements (successors to the Trans-Pacific Partnership) and regional comprehensive economic partnerships that do not include the United States. EU-Vietnam Trade Agreement.

There is an old saying that “Risk is Opportunity”. Opportunities in Vietnam are nearly endless, but they are not without risks. Governments are wise to do what they can to reduce risks and increase opportunities. Moving quickly toward approval of the long-awaited power plan is one step the Communist Party can take to show its commitment to foreign investment from Western countries and the economic stability of its people.

Ted Osius is Chairman and CEO of the US-ASEAN Business Council and served as US Ambassador to Vietnam from 2014 to 2017.

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