The ASEAN Series
Vietnam: Power Plays & Trade Pacts
On the final day of Vietnam’s 12th National Congress, the Communist Party of Vietnam unveiled a new Politburo. With a new leadership team in place, a clearer picture of the country’s direction for the next five years has started to emerge. The party has decided to restore a consensus leadership that former Prime Minister Nguyen Tan Dung strained in the latter years of his administration. Meanwhile, re-elected General Secretary Nguyen Phu Trong and new Prime Minister Nguyen Xuan Phuc are likely to continue pursuing much-needed reforms to the Vietnamese economy while balancing ties with China and the US.
Whilst the Politburo contains conservative and progressive elements, uncertainty hangs over the pace of Vietnam’s ongoing economic reforms. The signing of the Trans-Pacific Partnership (“TPP”) is expected to benefit Vietnam through measures that would boost exports significantly. However, the challenges that may arise from the trade pact must not be underestimated. The agreement will require extensive structural and economic overhauls which will test the CPV’s commitment to the trade pact in its execution. As attractive as Vietnam may be, particularly with the TPP, a number of challenges highlight the importance of understanding both the macro and micro-environments within the country.