Vietnamese Communist Party Accepts Resignation of President Vo Van Thuong: Political Turmoil and Its Impact on Foreign Investors
The Vietnamese Communist Party announced the acceptance of President Vo Van Thuong’s resignation on Wednesday, as stated by the government in an official press release. The news came as a surprise and has been perceived as a sign of political instability that could potentially impact foreign investors’ confidence in the country.
According to the statement, Thuong was found to have breached party regulations, with his shortcomings negatively affecting public opinion and damaging the reputation of the Party, State, and himself personally. The Central Party Committee, a significant decision-making body in Communist Party-governed Vietnam, approved Thuong’s resignation just over a year after his election.
President Vo Van Thuong holds a largely ceremonial role, but he is one of the top four political positions in Vietnam. Efforts to contact the presidential office on Wednesday yielded no response. The committee’s meeting preceded an extraordinary session of Vietnam’s National Assembly, scheduled on Thursday, where deputies are expected to ratify the Party’s decisions.
Thuong’s departure comes amidst ongoing political upheaval and leadership changes in the one-party state. The anti-corruption campaign, known as the “blazing furnace,” has been linked to recent major leadership shifts, with critics suspecting that it may also be a tool for political infighting.
Foreign investors and diplomats have expressed concerns regarding the impact of the anti-corruption campaign on decision-making processes in a country already grappling with bureaucracy. Thuong’s resignation comes shortly after Vietnamese authorities announced the arrest of a former head of central Vietnam’s Quang Ngai province on corruption charges. Thuong previously served as party chief in Quang Ngai and was also a senior party official of economic hub Ho Chi Minh City, where a large trial for a multi-billion-dollar long-running financial scam is currently underway.
Thuong was widely considered to be close to General Secretary Nguyen Phu Trong, Vietnam’s most powerful figure and the mastermind behind the anti-graft campaign. In 2021, Thuong was appointed president after former president Nguyen Xuan Phuc stepped down following party accusations of violations and wrongdoing by officials under his control.
Although the political crisis may be resolved with the swift election of a new president, concerns persist that repeated reshuffles of top leaders could negatively impact business sentiment in a country heavily reliant on foreign investment.
The Ho Chi Minh City stock exchange, Vietnam’s primary bourse, experienced a decline of nearly 3% in the initial hours of trading on Monday following news of Thuong’s imminent departure. Foreign investors recorded net sales totaling around $80 million in the first two days of the week, as reported by Mirae Asset Securities, a broker.
Thuong’s resignation raises questions about the predictability and reliability of the system upon which investment decisions are based. A Vietnam-based advisor to foreign corporates expressed concern that policy and administrative decisions might slow further as officials become more cautious about the direction of the anti-corruption campaign. However, it is important to note that Vietnam’s stance on key policies will not change.
Recent developments have led investors, who generally appreciate political stability, to question the implications of two presidents resigning within a year. Florian Feyerabend, the representative in Vietnam for Germany’s Konrad Adenauer Foundation, observed that the overall political system of governance remains stable and that Vietnam’s foreign policy aimed at maintaining good relations with both the United States and China will not be altered.