Vietnamese President Vo Van Thuong has resigned after a little over a year in office, the Communist Party said on Wednesday, making him the latest senior official to leave office amid an intense anti-corruption campaign.
The government announced that the Vietnamese Communist Party has approved the resignation of President Vo Van Thuong.
This development signals political instability that may impact foreign investors’ confidence in the country.
In a statement, the government noted that Thuong had contravened party regulations, asserting that these “shortcomings had adversely affected public opinion, impacting the reputation of the Party, State, and himself personally.”
Following the approval of Thuong’s resignation by the Central Party Committee, a pivotal decision-making body in Communist Party-led Vietnam, just about a year after his election, the government noted that the president holds a predominantly ceremonial position but is among the top four political roles in the Southeast Asian nation.
Despite attempts to contact the presidential office on Wednesday, there was no response.
The committee’s session occurred before an extraordinary assembly of Vietnam’s rubber-stamping parliament, scheduled for Thursday, where deputies are expected to validate the party’s decisions.
The government statement refrained from detailing Thuong’s shortcomings. However, recent significant leadership shifts in the one-party state have been consistently associated with the comprehensive “blazing furnace” anti-bribery campaign.
This campaign aims to eradicate pervasive corruption but is also viewed skeptically by critics as a means for political manoeuvring.
Amidst the complexities of Vietnam’s bureaucratic processes, foreign investors and diplomats have regularly cited the “blazing furnace” anti-bribery campaign as a significant factor causing delays in decision-making.
At the age of 53, Thuong tendered his resignation shortly after Vietnamese authorities revealed the arrest of a former head of Quang Ngai province in central Vietnam on charges of corruption dating back a decade. During this period, Thuong served as the party chief in the region.
Additionally, he held a senior party position in Ho Chi Minh City, the economic hub, which has recently been embroiled in a high-profile, multi-billion-dollar financial scandal. Currently, a significant trial related to the scandal is ongoing.
Thuong was commonly seen as having a close connection with the aging General Secretary Nguyen Phu Trong, Vietnam’s paramount figure and the primary driving force behind the anti-corruption initiative.
In the previous year, following the resignation of former president Nguyen Xuan Phuc, attributed by the party to “violations and wrongdoing” by officials under his jurisdiction, it took approximately one and a half months for lawmakers to appoint Thuong as his successor.
While the current political turmoil may be mitigated by the prompt election of a new president, there are lingering concerns that frequent reshuffles of top leadership could adversely affect business sentiment in a country heavily reliant on foreign investment.
Following reports of the impending resignation of the president, the Ho Chi Minh City stock exchange, Vietnam’s primary bourse, experienced a nearly 3% decline in the first hours of trading on Monday.
According to Mirae Asset Securities, a brokerage firm, foreign investors’ net sales amounted to approximately $80 million in the first two days of the week.
A Vietnam-based advisor to foreign corporations stated that Thuong’s removal could potentially result in further delays in policy and administrative decisions, as officials become more cautious about the trajectory of the anti-corruption campaign.
However, the advisor noted that Vietnam’s stance on key policies would likely remain unchanged.
Investors, who typically value political stability, may view unfavorably the premature departure of two presidents within about a year.
Recent events have prompted concerns regarding the “predictability, reliability, and internal dynamics of the system,” crucial factors influencing investment decisions, according to Florian Feyerabend, the representative of Germany’s Konrad Adenauer Foundation in Vietnam, a think tank.
Feyerabend emphasized, however, that despite these developments, the overall political governance system remains stable.
He also noted that Vietnam’s foreign policy, which aims to maintain positive relations with both the United States and China, would remain unchanged.
ALSO READ: UK Government proposes bill to phase out smoking, combat youth usage surge