The abrupt resignation of Vietnam’s president, Vo Van Thuong, on March 20 — the second such resignation in two years — has rattled some foreign investors and raised questions about the country’s political stability. Although the presidency is largely a ceremonial role, Thuong was nonetheless the second-most powerful leader in the ruling Communist Party of Vietnam (CPV).
The CPV has said little about what prompted Thuong’s early departure, but many observers believe he has been caught up in the ‘Blazing Furnace’ anti-corruption campaign, which has ensnared thousands of Vietnamese officials and businesspeople since its launch in 2016.
The allegations against Thuong date to his time as a provincial secretary from 2011-13. As the anti-corruption campaign has intensified, some analysts speculate that CPV members harbouring leadership aspirations may be using the campaign to eliminate political rivals, especially in the lead-up to the next National Congress meeting in 2026.
Weathering the storm
While there was some immediate fallout from Thuong’s resignation — the Ho Chi Minh City stock exchange dropped three per cent in the hours after the story broke — the economic impact has been limited.
Last week, companies from Vietnam and the Netherlands pressed ahead with 18 new business deals, a U.S. business delegation brought in heavyweights like Meta and Boeing, and, on March 26, a Team Canada Trade Mission comprising more than 135 businesses and organizations touched down in Vietnam.
What's more, this morning, Export Development Canada announced the opening of a trade representative office this fall in Ho Chi Minh City.
Clouds on the horizon?
The effects of the recent political instability may be felt, however, over the longer term.
As U.S.-based strategic intelligence publisher Stratfor notes, the ‘Blazing Furnace’ anti-corruption campaign "heightens risk perceptions and could affect investors' long-term planning," especially in industries with "long time-horizons, such as infrastructure, energy, and manufacturing." These three industries are vital to Vietnam’s plans to boost its economic development status in the coming decades.
