Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Vietnam’s President Vo Van Thuong has resigned due to “violations” and “shortcomings” after only a year in office, the ruling Communist party said on Wednesday, deepening political turmoil that risks undermining investor confidence.
Thuong was the second Vietnamese president to resign in 14 months amid a corruption crackdown that has seen the arrests of hundreds of government officials and the resignation of high-ranking politicians.
The political uncertainty comes at a time when Vietnam is attracting record foreign investment as it benefits from a global push by manufacturers to diversify away from China because of growing tensions between Washington and Beijing.
The Communist party accepted Thuong’s resignation and said he violated rules on “what party members are not allowed to do”, it said in a statement.
Thuong’s violations had affected public opinion and the reputation of the party and state, the party said, but gave no details.
The presidency is the second most powerful post in Vietnam after the Communist party’s secretary-general. The two are part of a four-person collective leadership that also includes the prime minister and the chair of the National Assembly.
Nguyen Phu Trong, the current secretary-general, has spearheaded the years-long corruption purge, which critics say has also targeted his political rivals.
Thuong, 53, was appointed president in March last year and was previously seen as a potential successor to 79-year-old Trong, who is widely expected to step down in 2026. Thuong’s predecessor as president, Nguyen Xuan Phuc, resigned in January 2023 amid an overhaul of the government’s top ranks by Trong that also saw the departure of two deputy prime ministers.
Investors have been becoming nervous as the corruption crackdown drags on and expands to private businesses, affecting government approvals of projects and licences. Officials have been reluctant to grant approvals for fear of being investigated for graft.
This month, the trial began of Vietnamese property tycoon Truong My Lan, who is accused of embezzling $12bn from a bank. Lan denies the charges. As part of the case, prosecutors have also charged several government and central bank officials with helping cover up the alleged fraud.
Thuong’s resignation “is not good for political stability”, said Nguyen Khac Giang, a visiting fellow at Singapore’s Iseas-Yusof Ishak Institute.
Even though foreign companies had not been investigated for corruption as part of the crackdown, a slowdown in bureaucratic processes and the political instability had had an impact on investors, he said.
“This causes hesitancy for foreign companies who want to make big investments in Vietnam,” he said.
Read the full article here
