The surprise resignation of Vietnamese President Vo Van Thuong on Wednesday after being in office for only a year will have no bearing on Vietnam’s economic development or other policies, asset management firm VinaCapital has commented.
“While this sort of news is unwelcome, we believe that it will have no effect whatsoever on Vietnam’s economic development strategy. This has remained remarkably consistent over the last two decades, irrespective of the individuals holding the key positions,” the firm said.
The Party Central Committee on Wednesday agreed to relieve Thuong from all Party and State positions due to “violations” and “shortcomings”, without offering further details.
Although the specific reasons for Thuong’s resignation have yet to be disclosed, there has been some speculation that it may be related to the ongoing anti-corruption campaign that has been in full swing for two years, VinaCapital said. The campaign has ensnared officials at all levels of government as well as several business executives who have allegedly violated the law.
In a talk to The Investor last month, Adam Sitkoff, executive director of AmCham in Hanoi, noted a slowdown in the investment approval process as local officials were afraid of getting involved in a corruption investigation.
VinaCapital said: “As we have stated in the past, this campaign is ultimately positive for Vietnam as it demonstrates the government’s commitment to tackling this issue and will help build greater confidence among citizens and foreign investors. The government has consistently pursued pro-business, investor-friendly policies over the years, and we have every reason to believe that will continue,” it adds.
VinaCapital said it maintains its views on the growth of the economy and market in 2024. While developments of this nature can understandably raise some questions among foreign investors, it did not believe that this should warrant serious concern.
In an article published shortly after Thuong’s resignation, Le Hong Hiep, a senior fellow and coordinator of the Vietnam Studies Program at the Singapore-based ISEAS – Yusof Ishak Institute, said like his predecessor, Thuong’s departure will not result in significant policy shifts.
However, the resignation has raised concerns among investors. Many of these investors were drawn to Vietnam precisely because of its relatively stable political climate compared to other countries in the region.
To counteract the political uncertainties and restore investors’ confidence in the country’s political and economic prospects, Hiep suggested the government improve the investment climate through streamlining bureaucratic procedures, enhance decision-making efficiency, and remove legal and regulatory barriers for investors.