Vietnam president resigns amid anti-corruption campaign

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Vietnamese President Nguyen Xuan Phuc announced his resignation on Tuesday amid an anti-corruption campaign that could hurt him, state media reported.

The Communist Party blamed him for “violations and irregularities” committed by officials under his responsibility between 2016 and 2021, when he was prime minister, including two deputy prime ministers ousted this month. Since then, there have been speculations that he would step down.

“Fully aware of his responsibilities towards the party and the population, he resigned from the positions assigned to him, resigned from his post and retired,” the party said in a statement.

It remains unclear whether a replacement has yet been chosen.

A sudden resignation is unusual in Vietnam, where the communist regime often carefully prepares policy changes to maintain the appearance of stability. Last year, 539 party members were prosecuted for corruption, including ministers, senior officials and diplomats, according to the acronym. The police, in turn, investigate 453 cases of corruption, 50% more than in 2021.

One of the investigations focuses on the distribution of Covid tests. The manufacturer Viet A Technologies was accused of bribing government officials to sell tests to hospitals and control centers for overpriced prices – at least one hundred senior officials and businessmen were arrested due to the case, such as former Minister of Health Ngoc Anh and then Mayor of the capital, Hanoi, Nguyen Thanh Long.

Another 37 people were detained following an investigation linked to a repatriation campaign during the pandemic. The program has been criticized for its complex procedures and high quarantine costs.

Considered the country’s pro-market reform leader, Phuc, 68, had been in the presidency since 2021 and was the highest-ranking official to become the target of the party’s anti-corruption investigations headed by Nguyen Phu Trong, the party’s longtime leader. When Phuc was prime minister, the country had an average annual economic growth of 6% and closed trade agreements with the European Union and Pacific countries. He was appointed as the future secretary general of the party, the most prestigious position in the state.

The country does not have a sovereign authority and is officially governed by four pillars: in addition to the president, the party secretary, the prime minister and the mayor.

There are different opinions about the impact of the anti-corruption campaign on the market and politics. For Le Hong Hiep, from the ISEAS-Yusof Ishak institute in Singapore, the purge may pave the way for more capable and reputable leaders, but it could also be the result of internal splits in the party.

“As long as changes in leadership do not lead to radical political changes, the impact on the economy will also be limited,” Hiep said on his Facebook profile.

Ha Hoang Hop, a visiting professor at the same institute, says that the uncertainty surrounding the consequences of Phuc’s departure could impact the market, “taking Vietnam into a period of instability that scares allies and foreign investors”.

The resignation requires the approval of the legislature. Despite the crisis, the government recognized Phuc’s achievements, especially in managing the pandemic. “He made great efforts to lead, conduct and manage the prevention and control of the Covid epidemic, achieving important results”, says a note from the regime.

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