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FAQs About The Special Economic Zones and Vietnam’s SEZ Draft Bill

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The locations of the three proposed SEZ. Photo courtesy: https://www.luatkhoa.org/dac-khu/

In June 2018, many were shocked to witness the largest demonstration in Vietnam since the end of the war in 1975, where thousands of people marched on the streets of several major cities. One of the reasons that compelled the Vietnamese people to protest was because of the proposed Special Economic Zones Law, which their National Assembly’s members were going to pass.

Despite the fact that under public pressure, the draft bill was ultimately announced to be halted until the next National Assembly’s meeting in October 2018, people still protested against it. Their reason? They feared that they were going to lose essential portions of their country to foreign investors, namely, the Chinese. The government of Vietnam, on the contrary, continued to insist on the passing of this law, citing economic development and jobs opportunities for hundreds of thousands.

Which side is right?

1. What Is A Special Economic Zone?

A Special Economic Zone (SEZ) is defined as an area in which business and trade laws are different from the rest of the country.

Theoretically, an SEZ can attract foreign investment, expand production, create jobs, and boost export-import. However, that would only happen if a set of conditions is met: the rule of law, together with clearly defined laws and regulations that both facilitate production and business activities, which are binding on all investors and able to adjust market failures, as well as other public issues.

In practice, and in the particular case of Vietnam, the government has yet to make available any information regarding the conditions under which the proposed SEZs will operate.

Can the SEZs create real jobs for the Vietnamese people? Can they boost production and trade? If they fail, and the nation falling into debts, who would be held accountable, and how? What are the punishments against them? Alternatively, will they say, “It’s none of your concern; it’s the Party and the State’s business”?

The above questions remain unanswered.

2. What Is The SEZ Project?

The SEZ project is a “grand policy” of the Politburo of the Vietnamese Communist Party (VCP), to establish three special economic zones in Van Don (a district in the Northeastern Province, Quang Ninh), Bac Van Phong (of Khanh Hoa Province), and Phu Quoc (of Kien Giang Province) as shown in the picture above. Foreign investors shall be granted special favors in these areas, for example, the 99-year land lease.

This project is codified in the proposed SEZ Law or the “Law on the Special Administrative-Economic Units”. Traditionally, and as in this time, the government of Vietnam does not publicize the names of the lawmakers concerned in any lawmaking process, so no one knows the architects behind the SEZ Law.

In case this SEZ Law is found to have contained some defects, or its enforcement would lead to severe consequences, no one, especially Party’s officials, shall be held responsible due to the lack of transparency and accountability in the country.

3. What Is “Special” About These Three Zones?

Overall, conditions in Van Don, Bac Van Phong, and Phu Quoc are not favorable for development. These include infrastructure, skills of the labor force, science and technologies, and financial-economic facilities.

Regarding geographic location, however, all the three districts are located in critically strategic sites of Vietnam, and they hold a crucial implication for national security. To make matters worse, Vietnam’s northern giant neighbor, China, where most of the potential investors would come from, has for centuries been known to keep an ambitious dream of becoming a hegemonic superpower.

China pays particular attention to Van Don and to Vietnam in general, whom she considers being the “buffer zone” for her to “move southward” to the geo-strategic South China Sea. For this reason, even when the SEZ law does not mention China but only refers to “foreign countries,” obviously China is the only nation the Vietnamese people are concerned about.

4. What Are The Goals Of The SEZ Project?

The SEZ project revolves around these promises: the three SEZs shall be where new institutions are tested and adopted with more freedom and less control, where innovation is stimulated, where more jobs are created, and more incomes are generated for local people. In short, the SEZs shall boost production and commerce, and lead to economic growth.

However, all of those promises remain vague and unfounded. Van Don, Bac Van Phong, and Phu Quo as stated, do not have favorable conditions to establish SEZs, because of poor infrastructure and technological bases and an unskilled labor market.

Most importantly, no political leader, no official of the VCP and the State shall bear any responsibility if those promises become unfulfilled. If the project fails, or if it causes any adverse consequences for the people and Vietnam, the victims would have no meaningful recourse.

5. What Are the Potential Consequences Of The SEZs That Vietnamese People Fear?

5.1. Territorial concession

By stipulating a land lease of up to 99 years and granting other special privileges to potential Chinese investors, the SEZ Law is paving the way for China to infiltrate Vietnam under her “salami-slicing” strategy.

Salami slicing is a strategy that the communist Chinese government has used since 1949 to take over territories in the South China Sea and the Himalayan region, in a gradual, step-by-step manner. The tactics were to open the door for Chinese immigrants to settle, do business, set up Chinese language schools, establish their own administrative system, and promote Chinese culture and customs in foreign lands. By doing that, they have legitimized China’s presence and power in the area and gradually built up Chinese autonomy inside Vietnam. If and when the time comes, this group with absolute autonomy could “rise” to demand sovereignty or for the Chinese-controlled area to “exit Vietnam and come back to merge into the motherland of China.”

5.2. A dumping ground for China’s waste

The SEZs may face the risk of failing to absorb advanced technologies and management skills, but that’s not it, after all. They are likely to become a market for low-quality products made in China and a dumping ground for her waste, most seriously toxic and e-waste.

5.3. The conflict between local people and Chinese immigrants

Overpopulation in China has led to high rates of unemployment and illegal immigration into neighboring countries, especially in Vietnam, where the government with its lousy governance fails to take control of the issue. As a result, bitter conflicts have arisen between local people and Chinese immigrants, which remain unresolved. In recent years, incidents of violent clashes have occurred between Chinese immigrants and the local Vietnamese community in Hai Phong, Quang Ninh, Thanh Hoa, Ha Tinh, as well as other provinces in Vietnam.

For example, in Quang Ninh in the mid-2000s, Chinese immigrants had thrown stones at Vietnamese people. In Thanh Hoa and Ha Tinh, drunken Chinese workers even falsely imprisoned a few local people after collectively assaulted them.

5.4. Economic loss

Accordingly, once the SEZ Law is passed, $70 billion USD shall be invested in the three SEZs, and that is like gambling ours and our children’s future on an uncertain race. Besides, with special favors granted to investors (mostly foreign) who could hardly be controlled, the government would definitely take the risk of substantial tax losses and budget deficits.

Many precedents can be found for this decision like this. One among them is the bauxite mining project in Tay Nguyen (Vietnam’s Central Highlands), which is also another grand policy of the VCP and the State. It was implemented despite public demonstration, notably the fierce protest from the late military general, Vo Nguyen Giap, and 4,000 Vietnamese intellectuals, domestic and overseas. The grand project lost almost US$170 million between 2013 and 2016. No one among those who made the promises for economic development and job opportunities for the locals were to take any responsibility for this loss.

With the government’s current institutions and management capacity, the SEZ project cannot and will not ensure economic success. The issue confronting the state is that if it fails like the Tay Nguyen bauxite mining project, no political leader shall bear any responsibility. Worse, if the SEZ project leads to territorial concessions, then it does not matter which leader or official of the VCP and the State takes responsibility, Vietnamese citizens would still suffer the irreversible consequences.

6. Why Does the VCP Insist On Implementing The Project?

The answer lies in the entrenchment of crony capitalism, with interest groups collaborating closely with the corrupt central and provincial governments, seeking to gain in grand projects in the name of “development.”

Also, “the obvious answer is ‘casinos and red-light districts,’ as these SEZs are the only places in Vietnam where these people can do business freely…. another reason that many people are aware of but still reluctant to spell out (for ‘political sensitivity’) is ‘the China factor.’ Otherwise, there is nothing else there” (Nguyen Quang Dy, 2018).

7. Is There Any Alternative Solution To The SEZ Project?

Experts point out that the SEZ idea was something that belongs to the last century, that it has become out of date, and that the SEZs are not relevant to the current circumstances of Vietnam. Instead, the urgent thing to do now is to launch a fundamental and comprehensive institutional reform in the nation, focusing on:

– setting the private sector as the basic economic sector, contracting the state sector to its minimum;
– recognizing and protecting private ownership of land;
– establishing democracy, and protecting and promoting freedom rights to mobilize the citizenry for the development cause of the nation.

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Vietnam: How Powerful Is The Prime Minister?

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Prime Minister Pham Minh Chinh. Photo: quochoi.vn

Among the “four pillars,” the position of prime minister possesses both power and prestige.


In the spring of 2021, Vietnam has a new leader: Pham Minh Chinh, a former police intelligence officer and former head of the Vietnamese Communist Party’s Central Organization Commission. On July 26, 2021, Pham Minh Chinh, once again, takes his oath to be the prime minister of Vietnam for the next 5 years.

One amongst “four pillars of the imperial court”

In the article “A few things you should know about Vietnam’s National Assembly chairmanship,” we wrote about the formation of the institutional division of power known as the “four pillars,” which includes the general secretary, the state president, the prime minister, and the chairman of the National Assembly.

If the state president and the chairman of the National Assembly, two among four of the most powerful positions in the Vietnamese Communist Party hierarchy, serve as primarily ceremonial positions, then the prime minister has both pomp and power, possessing broad authority in the governing system.

The prime ministership was once a position without any notable power. Before Prime Minister Vo Van Kiet’s term (1991-1997), previous prime ministers left a very little mark, except for Ho Chi Minh – who served as both state president and prime minister from 1946-1955.

Prime ministers after him, such as Pham Van Dong (1955-1987), Pham Hung (1987-1988), and Do Muoi (1988-1991), all served during periods where the government functioned according to the direction and management of the Party, rather than with tools of the executive branch. The same could be said during periods where Ho Chi Minh and Le Duan had overwhelming individual influence over the Party, causing other institutions and positions, including the prime ministership, to be subservient. 

In the 1980 Constitution, the government was called the Council of Ministers, with the prime minister position changed to the chairman of the Council of Ministers. This was an institution of collective leadership, with the powers of the chairman being minimal. With the 1992 Constitution, Vietnam reverted to the government mechanism in which the prime minister was head, concentrating greater power in his hands rather than practicing collective decision-making as in the past. Vo Van Kiet was the first prime minister to enjoy the new system under the 1992 Constitution.

With the depth and broadness of economic reform, the government’s role in managing national affairs grew by the day to more quickly, effectively, and dynamically respond to domestic and international developments. This increase in authority also served to more adequately address the increasing importance of foreign affairs in the age of globalization. The position of prime minister, thus, became extremely powerful. Nguyen Tan Dung (2006-2016) is seen as the most powerful prime minister ever and once competed fiercely for the position of general secretary. 

Who elects the prime minister?

Vietnam’s central government is modeled on the parliamentary system, with the central role (theoretically) held by the National Assembly. Constituents elect members of the National Assembly, and the National Assembly elects the government’s leadership figures, including the prime minister. (Obviously, everyone knows who actually “elects” the members of the National Assembly and the prime minister). The prime minister must be a member of the National Assembly.

Normally, electing the prime minister occurs during the first session of the new National Assembly term, after the general election, which occurs after the Party congress. In 2016, the procedure took an unusual turn: the National Assembly elected the new prime minister in the last meeting of its term in April, preceding the general election by more than a month. After the general election, the new National Assembly then repeated the election of the prime minister one more time. Nguyen Xuan Phuc was sworn into office twice in 2016. Pham Minh Chinh also had the same experience in 2021.

How powerful is the prime minister?

The prime minister’s powers are stipulated in Article 98 of the Constitution and Article 28 of the Law on Government Organization (ratified in 2015 and amended in 2019).

As head of state administration, this position has broad authority, from enforcing laws and organizing personnel to proposing and distributing the budget.

As a unitary state, the central government has overarching authority, with the prime minister’s power extending from the center all the way to the provinces and cities.

Outside his separate authority, the prime minister also has general authority over the collective decisions and resolutions of the cabinet.

For more details, please see the two documents described above. Here, we would like to list a few of the prime minister’s decision-making powers to demonstrate just how influential this position is in the economic sphere:

·      Regarding land: has the power to establish a council to assess land usage programs and plans at the national level; approves changes in land usage purposes on rice cultivation fields 10 hectares and above, protected and special-use forest land 20 hectares and above; decides the policy framework for compensation, support, and resettlement in special cases; decides price tables for province-level land in many cases; decides on several cases in which the usage rights for land the state allocates or leases are not auctioned.

·      Regarding investment: has the power to approve investment plans on the scale of airports, ports, oil and gas rigs, large urban areas, industrial zones, and export processing zones; approves investment plans overseas in banking, insurance, stocks, and telecommunications…from 400 billion dong and above, along with other projects involving capital of 800 billion dong and above.

Is prime minister the highest attainable position?

No. In the party power hierarchy, the general secretary remains at the top and is the most powerful position overall. 

There has never been a prime minister who has risen to become general secretary, except for Do Muoi, who was the chairman of the Council of Ministers. Nearly all served only one or two terms before retiring, except Nguyen Xuan Phuc, who served as prime minister and then stepped down to become state president, a much less powerful position. 

This article describes the power of the prime minister, but in actuality, we have only spoken of it in legal terms and in relation to the order of power in the party. The position’s power is also dependent on the individual’s level of influence within the party.

To put it another way, a leader’s power is the sum of his or her institutional power and individual sway. If the system bestows power but the individual leader doesn’t have the ability to wield it properly, then he does not have much power at all. Conversely, the system can bestow limited power, but an individual can exercise influence beyond his institutional limits. 


This article was written in Vietnamese by Trinh Huu Long and was previously published in Luat Khoa Magazine on April 6, 2021. The English translation was done by Will Nguyen.

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Vietnam’s State President: The Captain But Not Really A Captain

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State President of Vietnam Nguyen Xuan Phuc. Graphic: Luat Khoa Magazine.

In Vietnam, the position of state president is like that of a ship captain who completely got separated from the helm.


During his single term as the prime minister, Nguyen Xuan Phuc became popular in the news for his words and promises to transform many provinces and cities in Vietnam into “captains,” from “economic captain” to “developmental captain.” Now, he himself has become the captain of Vietnam, as he accepted the position of state president – the legal head of state.

But like many other captains of years past, his position as the “captain” of Vietnam is not what it appears. Yes, he will work from No. 2 Hung Vuong Street in Hanoi’s old French palace that dates more than 100 years, where French governors-general and President Ho Chi Minh once sat, but he won’t have much real power. 

 “The four pillars” and the parliamentary system

The state president is normally drawn from the Politburo of the Vietnamese Communist Party-normally, but not always. The exception is Ton Duc Thang, who succeeded Ho Chi Minh and served from 1969 to 1981. Ton Duc Thang was only a Party Central Committee member. 

In history, the most powerful state president of Vietnam was undoubtedly Ho Chi Minh, who held the position for more than 23 years, from 1946 until he died in 1969. During his years of greatest power, Ho Chi Minh also held the highest leadership position in the Communist Party and the position of prime minister until 1955. Between 1955 and 1960, Ho resigned as prime minister but held onto two other positions within the Party: party chairman and general secretary.

From 1960 onwards, Ho remained the party chairman and state president, but with the rise of Le Duan and his ascension to power, Ho Chi Minh was no longer the center of Vietnam’s political life. From then onwards, the role of state president slowly became largely ceremonial.

Ton Duc Thang, who was not elected into the Politburo, of course, held the position of state president, but he did not have much influence. His successor, Vo Chi Cong, on the other hand, was a member of the Politburo. But at the time, people didn’t call the position “State President,” but rather, “State Council President,” the council being an institution of collective leadership similar to the collective leadership structure of the Council of Ministers; this structure was originally borrowed from the Soviet Union and Eastern Europe and was incorporated wholesale into Vietnam’s 1980 Constitution. 

It was perhaps the next president, Le Duc Anh (1992-1997), who carved out a noteworthy role for the position of state president when he turned the role into an individual leadership position rather than a collective one. With his powerful influence derived from his time as defense minister, Le Duc Anh, along with General Secretary Do Muoi and Prime Minister Vo Van Kiet, formed what journalist Huy Duc calls the “tripartite division of power.” At the time, the “four pillars” had yet to take shape clearly; it was not until the leadership transition in 1997 that this was established. 

In actuality, the designation “four pillars” refers to the order of power within the Party. At the same time, the position of the state president in a parliamentary system such as Vietnam’s is a formality that only carries ceremonial value rather than any real power.

What does it mean to be ceremonial?

The parliamentary system is special in that the person who leads the state (head of state) is not the head of the cabinet. For example, in nearly all European countries, the head of the cabinet is the prime minister, who is simultaneously the majority leader in parliament; the head of state is either the president or the king/queen. We can see that Germany, Belgium, Denmark, and the United Kingdom all have prime ministers as their central political leaders rather than presidents or kings/queens.

Vietnam is similar. The state president is the head of state, which according to its Constitution is “the person who leads the state, who represents the Socialist Republic of Vietnam domestically and in foreign affairs.” However, the person who leads the state administration is the prime minister, who possesses far-reaching power, as we have analyzed in the article “Vietnam: How powerful is the prime minister?”

The Constitution grants the state president a number of limited powers that do not appear lacking, but in practice, are quite lacking. These powers include promulgating the Constitution, laws, and decrees, abilities that very much resemble veto power over decrees; numerous powers that relate to proposals to the National Assembly to elect or remove individuals from the highest positions in government; and above all, power as commander-in-chief of the armed forces.

“Commander-in-chief”sounds enormously powerful. But the command of Vietnam’s armed forces has never laid with the state president; it actually lies with the Politburo and the Central Military Commission (CMC). In recent times, the secretary of the Central Military Committee has always been the Party general secretary, while the deputy minister of the CMC has been the minister of defense. The state president is simply a standing member of the CMC. Nguyen Phu Trong has been the only individual to hold both Party general secretary and state president positions while concurrently serving as the secretary of the CMC.  

Thus, the state president does not actually hold any guns. He doesn’t hold the purse strings either, because control of the treasury is held by the prime minister. The authority of the state president, then, lies in approving military promotions, bestowing awards and honors, and deciding on issues related to citizenship, reprieves, and diplomatic protocols, etc.

With limited powers, Vietnamese presidents after Ho Chi Minh have never fully exercised their powers on thorny issues, such as dismissing a number of high-ranking positions in the government and the military or vetoing an ordinance from the National Assembly’s Standing Committee.

Though it has transitioned from a collective leadership role (in the State Council) to an individualized one, the position of state president still represents the collective in announcing decisions and lacks the broad, active powers of the prime minister.

The real power of the state president perhaps lies in the fact that he has his feet in both the Politburo and the CMC. If it weren’t for this straddling, the state president would be merely a puppet. Thus, when examining the actual power of a Vietnamese political leader, it is not enough to look to the law; one must also look at his or her power within the Party and the individual influence he or she has.

Nguyen Xuan Phuc has bestowed the title of “captain” on many provinces and cities as his way to encourage them to develop and prosper, though perhaps these provincial and municipal leaders have yet to understand how they were called “captains.” Nguyen Xuan Phuc now has also assumed the position of head of the ship, but he is also no captain.


This article was written in Vietnamese by Trinh Huu Long and was previously published in Luat Khoa Magazine on April 7, 2021. The English translation was done by Will Nguyen.

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A Few Things You Should Know About Vietnam’s National Assembly Chairpersonship

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Former National Assembly Chairwoman, Nguyen Thi Kim Ngan, and Current Chairman, Vuong Dinh Hue. Graphic: Luat Khoa Magazine

Though it is one of the “four pillars” of the Vietnamese government, the National Assembly chairpersonship remains the weakest position.


Vietnam’s National Assembly has been preparing to change its window dressing in late March 2021. No need to wait until the general election wraps up in May 2021; the National Assembly chairmanship had a new occupant in the final days of March. To reaffirm that the election in May did not change Vietnam’s political situation, July 20, 2021 would mark Vuong Dinh Hue’s continuation to serve the same leadership position as the National Assembly chairman for the next 5 years when it re-elected him.

One amongst the “four pillars of the imperial court”

Beginning in the mid-1980s, Vietnamese politics slowly moved beyond the individual leadership model and the overpowering influence of Ho Chi Minh and his successor Le Duan. This, in combination with the economic reform process, led to the gradual development of a new institutional division of power. Over time, supreme power was divided among four positions: the general secretary, state president, prime minister, and chairperson of the National Assembly. 

Today, as war has receded into the distance and demands to join the international community grow, the political system functions have begun trending towards laws of the state rather than the directives of the Vietnamese Communist Party. As such, the National Assembly increasingly plays a larger and more dynamic role in the political system.

However, it wasn’t until 1992, when Nong Duc Manh was elected as National Assembly chairman, that a member of the Politburo occupied the position. Before that, Truong Chinh – a Politburo member – served as chairman of the National Assembly Standing Committee from 1960 to 1981. Still, as stated above, the National Assembly did not play a large role during that time, though it’s hard to say that its role today is large either.

The National Assembly chairmen after Truong Chinh all worked their way up to become members of the Party Central Committee (such as Le Quang Dạo) or outside the Party Central Committee altogether (e.g., Nguyen Huu Tho).

All National Assembly chairmen from Nong Duc Manh onwards were members of the Politburo. Though its numbers are among the “four pillars,” the National Assembly chairmanship remains the weakest position and must abide by party decisions.

Launchpad to power

Of the five National Assembly chairmen since 1992, two have become general secretary of the VCP’s Central Committee – the highest position in the entire political system: Nong Duc Manh (2001 – 2011) and Nguyen Phu Trong (2011- present).

In stark contrast, the prime minister’s office has been unable to propel its occupant any further. One after the other, Vo Van Kiet, Phan Van Khai, and Nguyen Tan Dung became prime ministers and then retired, failing to make it to the general secretary. The exception is Nguyen Xuan Phuc, who, rather than retiring after serving as prime minister, is set to become state president; that is, he is taking one step down the ladder of party power.

Is the National Assembly chairman the “boss” of the National Assembly representatives? 

No. 

In principle, the National Assembly chairman is simply a member of the National Assembly, with all members being equal and everyone retaining one vote. No representative can force another representative to do his or her bidding. The National Assembly chairperson cannot issue any order to a representative, except for limited powers during work assignments with vice National Assembly chairpersons.

Then what does the National Assembly chairman do?

He or she mainly coordinates the activities of the National Assembly and the National Assembly’s Standing Committee, presiding over meetings and sessions and ratifying adopted constitutions, laws, resolutions, and ordinances.

For more details, please see Vietnam’s Constitution and the Law on National Assembly Organization.

The National Assembly chairman also usually acts as head of the National Electoral Council. This arrangement contains a conflict of interest when a representative (and often also a candidate) organizes elections. In democratic countries, the council must, in principle, be independent of the National Assembly.  

A position almost always reserved for men

Of the 11 National Assembly chairpersons in Vietnam’s modern history, the only woman to serve in this position was Nguyen Thi Kim Ngan, who held the position from 2016 to 2021. But truth be told, Ngan is the only woman to have ever served as one of the “four pillars.”

Her predicted successor, Vuong Dinh Hue, will carry on the near-exclusive tradition of men being at the helm of the National Assembly.

Hue has served as minister of finance (2011-2012), head of the Central Economic Committee (2012-2016), deputy prime minister (2016-2020), and secretary of the Hanoi party committee (2020-current). He has been a member of the Politburo since 2016.


This article was written in Vietnamese by Trinh Huu Long and was previously published in Luat Khoa Magazine on March 30, 2021. The English translation was done by Will Nguyen.

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