Vietnam PM pledges economic reform

Vietnams Prime Minister Nguyen Tan Dung has promised to push economic reforms and invited more foreign investment

Vietnam's Prime Minister Nguyen Tan Dung has promised to push economic reforms and invited more foreign investment

TOKYO (AFP) — Vietnam’s Prime Minister Nguyen Tan Dung promised Thursday to push economic reforms and invited more foreign investment as Hanoi tries to limit the global slump’s impact on the communist country.

Addressing a private economic forum in Tokyo, Dung also called for further aid and investment from regional powerhouses, particularly China, India, Japan, South Korea and Australia, to sustain growth in the rest of Asia.

He urged regional nations to continue coordinating their economic stimulus measures and boost trade and investment to maintain regional strength.

“Deeper regional integration and increased intra-regional linkages at different levels will be the key for Asia to be not only the first continent to overcome this crisis, but also to maintain its position as the world’s most important economic locomotive,” he said, speaking through a translator.

Although Asian nations, many of which rely on exports to the United States and Europe for growth, have been hit by the global financial crisis, intra-regional trade had softened its impact, he said.

Dung added that Vietnam would continue to restructure its economy, promote infrastructure programmes, push for administrative reforms, and put more emphasis on environmental protection.

In Vietnam, “we believe that the current crisis is… an opportunity to speed up restructuring, improve management and build the foundation for sustainable development,” he said.

Vietnam enjoyed 3.1 percent growth in the first quarter and expects five percent growth this year despite the global crisis, he said.

Despite the downturn, he said: “We believe that Vietnam will still be a dynamic economy and a reliable destination for investors.”

NA Vice Chairman calls for reform

VietNamNet Bridge – National Assembly (NA) Vice Chairman Nguyen Duc Kien has said it was necessary to raise the role of the NA in law and justice reform.

NA Vice Chairman Nguyen Duc Kien. (Photo: VNN)

He said so while attending a seminar yesterday on law and justice reform, organised by the European Commission-funded Institutional Support Project to Viet Nam.

Kien said more efforts are needed to build and complete institutions.

“Because of a shortage of experience, Viet Nam’s legal system is still not complete so executive and justice offices still face many difficulties in law implementation,” he said.

Ham Farnhammers from a delegation of the European Commission to Viet Nam said the projects funded by the European Commission in general and the Institutional Support Project to Viet Nam in particular had contributed an important part in law and justice reform in Viet Nam.

The Institutional Support Project to Viet Nam, in co-ordination with the NA’s Office, Ministry of Justice, the Supreme People’s Court, and the Supreme People’s Procuracy had created many good results, he said.

Dr Nguyen Si Dung, deputy head of the National Assembly Office, said that after two years of global economic integration, the people expect the most in the NA’s role to the important decisions.

“The NA has partly manifested its role, as for the first time, the Prime Minister stood in front of the NA to answer questions by the NA deputies straightforwardly and responsibly,” he said.

A high-ranking expert of the European Commission, Ian Harris, clerk of the Australian House of Representatives, said strengthening of the legal and justice systems could not only bring benefit to legislative offices and relevant offices, but also help reduce poverty in long term.

At the seminar, many legal experts also agreed that law and justice reform helped implement hunger eradication and poverty alleviation in Viet Nam.

Vietnam at reform crossroads

By Long S Le

In late 1997, a large number of Vietnamese peasants displaced by official land seizures struck back through widespread protests that rocked the ruling Communist Party. The demonstrations raised questions about the party’s commitment to improving the lot of the rural masses and prompted intra-party soul-searching for ways to make the government more accountable to the people.

Prominent technocrats were permitted briefly to float alternative policy prescriptions for dealing with the rapid transformation from a command to a market-oriented economy. Mathematics expert Phan Dinh Dieu aired controversial opinions about the party’s limitations in economic management and reasoned that without more political liberalization and privatization, the peasant protestsand other economic problems would likely multiply.

Dieu was later expelled from the party for his contrarian views, but his political and economic forecasts now look prophetic. They also presaged a seminal study by Vietnam experts James Reidel and William Turley, who in 1999 predicted the country’s reform program would eventually lead to “questions about the adequacy of Vietnam’s political leadership and institutions”. The study called for strengthened controls over fiscal, monetary and revenue matters, and more transparency and accountability, and predicted that balance of payments difficulties, accelerating inflation and revenue losses would trigger crises.

These have now arrived in Vietnam. The mounting economic woes, including an annual inflation rate of 27% in July and a surging balance of payments deficit estimated at US$15 billion in the first seven months of the year, have undermined confidence among outspoken factory workers and the middle class in the party’s ability to manage the economy.

The price of rice surged 72.7% year-on-year in July, according to the General Statistics Office, which now predicts year-end inflation at between 25%-30%. Prime Minister Nguyen Tan Dung reported to the National Assembly in May that the number of families “going hungry” had doubled from last year. High inflation is also weighing against growth: the Asian Development Bank estimates Vietnam’s gross domestic product (GDP)growth will drop from over 7% last year to 6.5% in 2008, while private sector analysts say growth could fall as low as 5%.

Some hope those economic woes will revive the long-dormant debate about the need for more political openness to achieve greater market efficiencies. The party’s prevailing view that GDP growth will gradually lead to more openness is being called into question as growth begins to slow and social unrest rises. The idea that political liberalization is necessary to ensure sound economic management is still a dangerous one among the party’s rank and file, including a conservative camp that fears even the slightest political opening could develop into a people’s power-style revolt against one-party rule.

Economic shocks have previously galvanized bold reform moves in Vietnam, including the 1986 doi moi market reform program. While reform consensus frequently led to policies that favored the interests of ranking party cadres, it didn’t always lead to efficient outcomes, as the current economic woes have brought into view. A new class emerged of business-minded cadres who leveraged their official positions to enrich themselves from Vietnam’s fast expansion, often at the wider population’s expense.

Foreign advice
The question now is whether the Communist Party will respond differently to its emerging economic crisis or instead opt for more half measures and preservation of its political and economic dominance? According to Jonathan Pincus, an economist with the United Nations in Vietnam, there “is no shortage of people in Vietnam who understand the causes of the current economic instability and the steps needed to quell price inflation and restore stability to the markets”, but “these people are not in a position to do much about it”.

The government has so far opted to listen to friendly foreign rather than critical local advice. Premier Dung in mid-July agreed to the creation of a board of foreign economic advisors from prestigious Western institutions to offer policy advice for dealing with the crisis. However, the foreign experts are expected to offer up mostly economic and financial prescriptions, and steer clear of calls for more political pluralism.

The government’s surprise decision on July 21 to cut subsidies and raise retail petrol prices by 31% are in the spirit of the orthodox neo-liberal prescriptions many Western economists favor, even though the move will surely stoke even faster inflation. Under lobbying pressure from the Electricity of Vietnam Group, policymakers are now also deliberating whether to remove caps on electricity prices by the end of this year, another standard market-oriented reform prescription.

Behind the inflation figures, Vietnam faces a spiraling debt crisis, with the economy weighed down by the debts of state-owned enterprises. Adding to those debt woes are corporations and other party-affiliated economic actors that were allowed to set up their own banks and have invested unknown millions of dollars from their equity into businesses outside of their core competence, including securities and real estate that have recently collapsed in value.

Nor has foreign direct investment been efficiently applied to actual projects, which some say explains why Vietnam’s money supply grew by over 80% while real output expanded by a mere 17% from 2004-2006, according to economist David Dapice. He estimates that the yawning gap between money spent on asset accumulation rather than raw materials and capital equipment likely widened last year and has contributed to the recent runaway inflation.

The government is now scrambling to balance fighting inflation while keeping debt-ridden and politically connected SOEs afloat, rather than undertaking more deep-seated reforms to its economic management. Indications are that rather than tightening monetary policy, the government is willing to accept inflation rates as high as 25% this year. There are also indications the government plans to cut commercial bank deposit rates, currently at about 14%, in a bid to pump more liquidity into ailing businesses.

SOEs, state corporations and other vested economic interest groups aligned with the party have made and apparently are winning their case that tighter monetary policy will not only bankrupt them, but will also cause the country to miss its targeted economic growth rate of 7% for this year. Whether the government’s bid to keep businesses afloat rather than restoring broad macroeconomic stability will lead to an economic soft landing in 2009 and restore local confidence in its management is highly uncertain.

Behind the times
Vietnam’s emerging economic crisis is demonstrating that more than 20 years of market-oriented reforms have outgrown the capacities of the one-party communist-led political system. Some now argue that extraordinary growth rates may be attributed to the sudden change from communism to capitalism as the organizing basis of economic life, and not to improvements in the efficiency of investment, productivity of labor or enhanced national competitiveness.

The Economist Intelligence Unit recently forecast that Vietnam’s economic growth would slow from an average of 7.9% from 2002-2007 to 5.1% for the decade spanning 2011-2020 as “vested political interests may impede reform, thereby preventing the necessary restructuring of some SOEs”. Slower growth will inevitably lead to more difficulty in providing jobs and potentially more social unrest, others predict.

Foreign investors and analysts had earlier predicted that Dung would speed economic reforms, based on his frequent calls for a more transparent, legal and liberal framework for doing business. But the mounting contradictions in the state-led market-oriented economy, including the fact that party-aligned SOEs account for 70% of foreign borrowing while producing only 40% of GDP, are becoming more glaringly apparent as the economy unravels.

It all means Vietnam is fast hurtling towards a moment of reform truth. The communist leadership is now trying to reach a new consensus between national and provincial leaders, as well as between conservative and progressive intra-party camps, to address the deteriorating economic and social situation while maintaining its grip on power.

But adherence to technocrat Dieu’s call over a decade ago for more political liberalism and economic privatization arguably would have forestalled the crisis in confidence the party now faces.

Long S Le is the director of international initiatives for the Global Studies Program and also a lecturer of Vietnamese studies at the University of Houston in the United States.

Asia Times Online :Vietnam at reform crossroads

Vietnam’s Third Way poses party teaser

As Vietnam’s rapid economic expansion gathers pace, the country’s communist party leaders are having an increasingly difficult time maintaining their so-called “Third Way” model of economic development, where centrally planned strictures and market dynamics uncomfortably co-exist.

The question merging over the transitional economy is whether, more than 20 years after the launch of market-oriented doi moi reforms, a new generation of political leaders has the political will to bury the country’s communist past and fully embrace market economics.

How the party strikes the balance could in the coming years make or break Vietnam’s the reform experiment, claim some academics. Mancur Olson’s Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships makes the theoretical point that in transitional economies there are certain reforms that governments may pursue to better promote economic growth and that certain styles of government are better able to create and enforce those reforms more consistently.

Reforms that respect and secure individual rights, according to Olson, will provide strong incentives for individuals to produce, invest and engage in mutually advantageous trade, of which society will broadly gain more from so-called rights-intensive production, the theory argues. And as one might expect, rights-respecting and strong governments are most able to successfully implement such reforms.

In today’s Vietnam, Prime Minister Nguyen Tan Dung and his economic lieutenants must weigh whether such reforms are appropriate at this arguably still early point in the country’s economic development and, if yes, will his more market-minded administration allow the country to fully outgrow communism?

For economic development scholars who study Vietnam, the general answer is yes and an eventual yes. Several economists now argue that in today’s Vietnam, many of the reform pieces are in place, including evidence that the slow but steady government grant of more land rights has led to greater productivity and investment compared with areas that have not implemented the same reforms.

On the one hand, the current group of reform-minded Vietnamese leaders is committed to market liberalization because to date it has led to fast economic growth and helped to shore up the communist party’s overall popularity. Yet they continue to do so with an unequivocal determinism that their reforms do not challenge the party’s monopoly over state and society.

Indeed, any activities by groups that are not sanctioned by the state are subject to criminal prosecution, as activists who last year called for more democracy and are now languishing in prison can attest to. “When leaders here say they want a socialist market economy, they really mean it … no one with any influence is arguing that the state should surrender the economy’s commanding heights,” said Jonathan Pincus, a UN economist based in Vietnam.

Yet at the same time, the party remains strongly committed to socialism, or more accurately to Ho Chi Minh thought, still the underlying basis of its overarching authority and political legitimacy. That means Dung’s administration probably won’t anytime soon abandon communism or implement reforms that would pave the way for Vietnam’s full-blown conversion to a rights-based capitalism.

Instead, capitalism and its externalities will continue to be co-opted in order to “revolutionize” the prevailing socialist order, with the country gradually becoming more modernized, technocratic, wealthier, powerful, and, perhaps finally, democratic. Intellectually, the party has started to map out what this new socialist order may look like in practice.

According to party-affiliated scholar Phan Dinh Dieu, the one party state is not in contradiction with market reforms:

if we look upon the whole society as a unified system, then generally speaking the State does not only ‘dominate’ society, but also increasingly fulfills many service functions for society, as if to create a structure and a favorable environment for the activities of society’s members … In this sense, antagonistic relations between State and civil society will be replaced by relations of collaboration; the democratic State will be the State ‘of the people, by the people, and for the people’.

Party leaders are well aware of the challenges in pursuing its third way between capitalism and communism. Although this middle path is not fully bulletproof against internal and external challenges, party leaders seem to think that in time it can be. A recent example of the party’s new thinking was also presented in a recent op-ed by former prime minister Vo Van Kiet, who oversaw the implementation of many important economic reforms during his tenure.

In responding to a recent scandal over the widespread distribution of tainted soy sauce, Kiet reiterated the party’s belief in the importance of a functioning press to check and balance their reforms, so long as reporters remain aware of their constitutional function and responsibility to the party:

Our socialist-oriented market economy has not commercialized the press, which worries many people. But the market itself is bringing the press and readers closer. Our nation is led by the Communist Party alone, which requires the press to be an effective source of information … Newspaperpersons who consider themselves above the law are prone to corruption. Thus, the press’ activities and penalties for corrupt journalists [either in state-run or private newspapers] should conform to the law.

By co-opting and integrating elements of market liberalization and democratization, socialist institutions may eventually become, and in many ways already are, more efficient with greater responsiveness in which the party-state practices “a soft, diffused and highly qualified form of domination,” according to academic Chris Dixon of London Metropolitan University.

Reform blind spots
To be sure, Vietnam’s current economic growth has yet to be accompanied by an appreciable increase in economic freedom (ie government intervention in the economy, property rights, and rampant black market activities), political freedom (ie freedom of expression, freedom of association, and the right to organize political parties), or good governance (ie frequency of corruption in public and political sectors).

So far, the poor and disadvantaged have been willing to live with the economic, political and administrative deficiencies of the one-party state so long as the government delivers the basic economic conditions which allow for the creation of higher paying jobs, better public services, and a gradually improved standard of living.

The average Vietnamese household is in absolute terms now better off than before market liberalization measures were first introduced in the mid-1980s. The question going forward is not merely whether the party can deliver prosperity, but whether prosperity is equitable and perceived to be based on merit and not on communist party connectedness or government corruption. Simply put, the average Vietnamese citizen still evaluates the communist party based on its self-proclaimed constitutional credo that the communist party-state will function ‘of the people, by the people, and for the people’.

On the one hand, the economic marriage between communism and capitalism can probably be sustained over the medium term. Scheduled privatization of former state-owned enterprises (SOEs) should help to boost economic efficiency and growth. SOE managers and workers should have no immediate reason to oppose privatization, since the process as currently defined will allow them to continue to receive some form of government subsidies and a larger share of their productive surplus.

Party leaders will still hold on to strategic industries, such as telecommunications, banking and financial services, and education and training, for third-way sociopolitical reasons. Sustained state-control of crucial industries also serves as a sort of economic shock absorber. In case of a significant economic slowdown or financial crisis, party leaders can further privatize non-strategic enterprises, such as in the tourism industry, which are already driven by firms led by party loyalists.

On the other hand, the downside of sustained state-vested interests in the economy is that the country, while very capable of becoming a low- to middle-income country, will consistently lag the region’s more developed economies in terms of economic efficiency. The preferential treatment of SOEs by most accounts has led to an inefficient allocation of capital resources and drags on Vietnam’s still vastly untapped growth potential.

For example, the World Bank estimates that the amount of capital needed to create one job in a SOE is more than eight times higher compared with domestic private firms; the potential cost savings in transport and technical services could easily be more than 30% if the various privileges bestowed upon SOEs competing in the sector were eliminated, according to the same World Bank statistics.

To realize Vietnam’s true growth potential in job creation and economic productivity the communist party needs to level the competitive playing field between the state and private sectors. Unfortunately there is no official policy or the financial infrastructure in place to expand small private firms into larger, more globally minded companies.

The importance of this transformation is that, given the still relatively weak purchasing power of the average Vietnamese domestic consumer, higher incomes at this early phase of development will in the main come from export-oriented activities. Until these reforms take place, Vietnam will continue to be marked by inequality, expressed in recent political protests and labor strikes, which slowly but surely are from below eating away at the country’s socialist fabric.

Vietnam’s communist party leaders will find it increasingly difficult to reconcile their current marriage between communism and capitalism. As the population becomes more economically empowered, party cadres assertions that the party-state is equivalent to a democratic state of the people, by the people, and for the people will ring increasingly hollow. And any move back towards the socialist redistribution system to address emerging issues of inequality will just as likely be rejected by the very masses they would be designed to help but who are unwilling to revert to the party’s inefficient centrally planned old ways.

For Vietnam’s communist party leadership, this is the limitation and contradiction of their hoped for third way which if not resolved could in the end be its eventual undoing.

US congressional leaders urge Vietnam to match economic progress with political reforms

HANOI, Vietnam: A high-ranking congressional delegation led by House Majority Leader Steny Hoyer praised Vietnam’s economic reforms on Thursday and urged the communist nation to match them with human rights reforms.

“We think that freedom of individuals and free markets go together and complement one another,” said Hoyer, a Maryland Democrat and the second-ranking leader in the House of Representatives.

Hoyer led a 13-member delegation that also included House Minority Whip Roy Blunt of Missouri, the No. 2-ranking Republican in the House.

They met with President Nguyen Minh Triet, Deputy Prime Minister Hoang Trung Hai and leaders of Vietnam’s National Assembly.

The delegation arrived as Vietnam begins a two-year term on the U.N. Security Council.

“Vietnam is increasingly important, and our relationship is important,” Hoyer said.

The two sides discussed trade issues, the protection of intellectual property rights and relations with China, Vietnam’s powerful northern neighbor, Hoyer said.

Vietnam joined the World Trade Organization last year and has one of the world’s fastest-growing economies. Trade between the former foes has surged since a trade agreement in 2001, reaching $12 billion last year.

While relations between the two countries have grown closer in recent years, U.S. officials have continued to express concerns about human rights in Vietnam, which does not tolerate opposition to the ruling Communist party.

“The economic dynamism of Vietnam will only be expanded by encouraging more individual rights among the population,” Blunt said.

The delegation planned to leave Vietnam on Friday, when it will travel to Australia.

Youth delegates grill government on key issues

Vietnamese youth need to develop a long-term vision and self-motivation and master information and technology if they want to be a part of globalization and the knowledge economy, a deputy prime minister said Thursday.

In the first-ever direct dialogue between the government and members of the Ho Chi Minh Communist Youth Union, held on the sidelines of the union’s 9th National Congress, Nguyen Thien Nhan, who is also the Minister of Education and Training, called on more young people to venture into business.

But for that, the deeply-etched belief that “entering university is the only way to career success” needed to go, he pointed out.

The government was working on a project to help those not choosing to pursue a university degree start up or develop their own business, he told them.

Members of the youth union challenged the deputy PM and other senior officials on a wide range of topics including the sluggishness in administrative reform, the role of the youth union in the Government’s policy in dealing with road safety, and employment for young people who complete their army service.

Replying to the question on administrative reform, Nhan admitted that the work to eliminate red tape was still far from satisfactory for the public, saying any ideas put for-ward by the union to accelerate the process were welcome.

He acknowledged that performance-based salaries and good allowances were vital to ensure highly-qualified young people in Government offices remained dedicated.

Some of the youth delegates called for more contribution from youths for soldiers deployed in the Paracels-Spartly Archipelago.

The appeal found almost unanimous support from the others.

There was also a suggestion that the youth union should organize more exchanges with the soldiers in the archipelago to educate all students about the situation there.

Reported by Dang Long

Vietnam caught between repression and reform

By Shawn W Crispin –

Vietnam’s ongoing crackdown on pro-democracy groups has entered a volatile phase with the recent imprisonment of a group of foreign nationals, an unexpected move that has strained bilateral relations with former battlefield adversary and present pivotal trade and investment partner the United States.

On November 17, Vietnamese police arrested and detained a group of six pro-democracy activists affiliated with the unsanctioned pro-democracy Viet Tan party. The ethnic Vietnamese activists, among them a US national mathematics researcher, a French national journalist and a Thai citizen, were arrested while handing our fliers that explained and promoted non-violent struggle for democratic change.

The government has through the state-controlled media acknowledged jailing some, though not all, of the activists. In a clumsy attempt to deflect US criticism, communist propagandists manipulated images on the website of state mouthpiece newspaper Sai Gon Giai Phong of detained US national Nguyen Quoc Quan, which were initially published with him wearing prison garb but hours later were replaced with images of him in a white t-shirt. Subsequent articles listed Quan’s nationality as “unknown”.

The authorities have simultaneously attempted to paint the pro-democracy Viet Tan party, which has members both inside and outside of Vietnam, as a terrorist organization bent on stirring violence and unrest – charges the party has firmly denied in a public statement. The only evidence offered to substantiate the terrorism claims has been the arrest of two ethnic Vietnamese Americans – six days after the group of Viet Tan activists were first detained – who were charged with trying to enter Vietnam with a firearm. Viet Tan has denied any association with the two suspects.

None of the Communist Party-led government’s official obfuscation about the arrests or trumped up charges against the Viet Tan party has washed with the US embassy in Hanoi, according to a source familiar with the situation. US Deputy Secretary of State for East Asian and Pacific Affairs Scott Marciel recently cancelled a planned visit to Vietnam in protest against the detentions. It’s still unclear whether Washington would consider imposing some sort of economic sanctions if the US national activists are held indefinitely.

The George W Bush administration earlier this year shifted its previous conciliatory policy towards a more critical assessment. Bush met at the White House with Viet Tan’s senior leadership and thereafter scolded Vietnamese president Nguyen Minh Triet over the country’s abysmal rights record during his high profile visit to Washington – which was billed as a diplomatic victory in the state-controlled media.

Half-hearted reformer
Now the sudden internationalization of the Communist Party’s sustained crackdown on Vietnam’s small but determined pro-democracy movement has put nominal national leader prime minister Nguyen Tan Dung on the horns of a potentially damaging dilemma.

Many had hoped upon Dung’s appointment to the premiership in April 2006 that his government would take a more enlightened approach towards democratic rights and civil liberties. Breaking with the post-revolutionary Ho Chi Minh era – where governments have been run more by faceless committees than led by charismatic leaders – Dung has portrayed himself as a reformer and put his personal stamp of authority on his new-generation administration.

He has leveraged that authority to push for more economic and financial reforms, including streamlining rules and regulations related to foreign trade and investment in line with the country’s new liberalization commitments as a full-fledged member of the World Trade Organization. Dung has also angled to boost the country’s global image by presenting himself as the animated leader of a new Vietnam, breaking with the stiff tradition of his Communist Party predecessors.

In that direction, he is also spearheading some soul-searching inside the 77-year-old Communist Party, as its cadres aim to attract more foreign capital and redefine their role in the ongoing transition from communism to capitalism. That reportedly even includes an internal debate over whether the party should consider a name change. Unconfirmed media reports have party cadres mulling either the “Labor Party” or “People’s Party” as possible new monikers.

Redefining the party is clearly a politically delicate and complicated exercise, particularly as so much of the monolithic regime’s current legitimacy relies upon its revolutionary past. Vietnam’s capitalist revolution, in contradiction to the party’s traditional egalitarian philosophy, has caused widespread social and economic dislocation and rapid enrichment of party cadres and their affiliated business interests.

Even with rapid economic growth, it’s proving an increasingly difficult social and economic balance for the regime to maintain. For instance, last year the government was rocked by widespread and sometimes violent strikes by factory workers who demanded a rise in the national minimum wage. In an unusual concession to popular demands, the government eventually relented to the workers’ demands, though to the chagrin of the foreign factory owners who located in Vietnam for the cheap wages.

To be sure, under Dung’s watch there have been certain signs of political loosening – albeit still on the party’s own terms and conditions. Earlier this year, Dung fielded questions from the general public over an on-line chat forum. This month he introduced for the first time a similar question and answer session at the traditionally opaque National Assembly of Vietnam, the country’s Communist Party-appointed parliament.

Education Minister Nguyen Thien Nhan was grilled by citizen questions over his policies, which had recently resulted in dropping graduation rates in many provinces, while Finance Minister Vu Vanh Ninh was peppered by even harsher questions about a national e-government project that Dung shuttered because of misuse of funds, according to a recent Asia Foundation report.

At the same time, Dung’s government, and perhaps more importantly the Communist Party’s politburo, continues to treat Vietnam’s budding pro-democracy movement as a security threat rather than a potential reform opportunity. Underscoring the regime’s squeamishness, the head of public security was elevated to the politburo’s second most powerful position at this year’s Communist Party Congress, who now ranks above both the prime minister and president and only behind the party’s general secretary.

That reaffirmed the Communist Party’s strong commitment to the police state it first institutionalized over 30 years ago to ferret out suspected supporters of the former US-backed South Vietnam regime and has since deployed to suppress any hint of political opposition to its rule. What’s unclear is whether those tough tactics will work the same against a new generation of politically minded Vietnamese that are not as easily spun by the bogey of Western-influenced ideas and ideals.

Viet Tan leader Duy Hoang, himself a US citizen, says that the government’s recent repressive measures targeting pro-democracy groups like his have only encouraged more people to join his party’s non-violent struggle for democratic change, which he likens to the civil disobedience campaign led by the Nobel Peace Prize-winning democratic opposition in Myanmar. If the Vietnamese authorities continue to hold US citizens as part of their crackdown on democracy, Washington could soon be persuaded to view the situation similarly.