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HANOI: The Vietnamese Communist Party, once credited for opening the country and joining the global economy, is in crisis. Its factional conflict, economic mismanagement and inattention to quality-of-life issues have eroded its claim to be “the force leading the State and society.” With the country’s earlier blazing growth slowing to around 5 percent, the public mood is bitter, openly and unprecedentedly critical. Holding a virtual monopoly over political life, the Communist Party is alone in sharing the blame for globalization gone awry.
In a scenario repeated in many countries joining the fast-moving globalized economy, Vietnam’s economic crisis was heralded by a surge of foreign investment capital that – unsterilized, or offset by central bank action to reduce the money supply –led to reckless expansion of credit followed by a severe bout of inflation. Inevitably, the government was forced to retrench early in 2011. With loans now difficult to obtain, businesses are hard-pressed to collect from clients or pay interest on what they owe. Aspirant members of the middle class have seen their savings wiped out by speculative investments gone wrong. State-owned companies are bloated, bankrupt and heavily indebted to state-owned banks. Land clearance for commercial development has been managed so ruthlessly that farmers, long a bulwark of the regime, are turning mutinous. Confidence in the party’s economic management has been severely shaken.
Read more: http://yaleglobal.yale.edu/content/vietnam-reform-economy-reorient-foreign-policy
