PM Admits Economic Failings

The leader takes responsibility for Vietnam’s current economic woes.
2012-10-22
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Prime Minister Nguyen Tan Dung addresses the National Assembly in Hanoi, Oct. 22, 2012.
AFP

Vietnam’s Prime Minister Nguyen Tan Dung admitted Monday that he has failed to effectively lead the country’s economy out of turmoil amidst a spate of corporate scandals and inefficient management of major state-run firms which has blackened the communist state’s reputation.

Dung’s admission came after he effectively escaped a leadership change at a crucial ruling Communist Party central committee meeting last week where he was publicly rebuked over a string of scandals that were traced back to the country’s leadership.

Speaking at the opening session of the month-long National Assembly, or parliament, the 62-year-old Dung admitted “mistakes” in leading the government which he said had damaged the reputation of the economy, vowing to work harder to amend official shortcomings, according to the official Tuoitrenews website.

“As a member of the Politburo and government prime minister, I earnestly accept major political responsibilities as head of the government and sincerely admit mistakes in front of the National Assembly, the whole Party, [and] the whole people regarding all weaknesses, faults of the government in leadership, control, management especially weaknesses and faults in inspection and supervision of activities of economic groups, of state-owned corporations,” Dung said.

He specifically pointed to state-owned shipping companies for mishandling their businesses, “causing serious losses” and “seriously affecting the reputation and role of the state economy.”

Tuoitrenews said that Dung has resolved that he and his government “will seriously be strict with themselves, will stand united and strive the utmost in rectifying those weaknesses, all for the nation, for the people, for the Party, for the regime, for the stability and sustainable development of the country.”

The prime minister claimed credit for stabilizing runaway inflation in Vietnam, but admitted that the government needs to address a number of challenges. He vowed to continue with reforms to the economy aimed at more effectively managing state-owned companies.

He specifically pointed to the failure to address scandals such as the near-collapse of state-owned shipbuilder Vinashin in 2010 under a debt of about U.S. $4.5 billion and for sparking investor concerns over the management of the country’s other government-run firms.

Following public outcry over the shipbuilder, the government had admitted that Dung had played a role in allowing the mismanagement of state-owned firms including Vinashin, but said the "shortcomings and mistakes" were not serious enough to warrant disciplinary action.

Dung said that Vietnam is likely to see economic growth of only 5.2 percent in 2012—the slowest growth in 13 years and well short of the 6.5 percent earlier predicted by his government.

“The global economic slowdown and its complicated development have placed a negative impact on an open economy like Vietnam,” he said.

He said that the tightening of monetary and fiscal policies for curbing inflation has resulted in lower domestic demand and large inventories which make it hard for local businesses to access credit for production.

“Such an international and local economic context has erected a real challenge for local policymakers and operators in 2012,” Dung said.

He said that the government would focus on stabilizing the macroeconomy and keeping inflation under control in 2013. Inflation ballooned to 23 percent in August last year but has since fallen to single digits.

Dressing down

The prime minister, who is only one year into his second five-year term, is seen to be increasingly at odds with Vietnamese President Truong Tan Sang, and experts say his dressing down at last week’s meeting may have been designed to limit his power.

In August, authorities arrested the founder and a former director general of Asia Commercial Bank Nguyen Duc Kien, who is believed to be allied with Dung.

The arrest caused clients to withdraw their money, forcing the central bank to provide the lender with emergency funding and shaking the confidence of investors, who fear further arrests in the country’s finance industry.

Dung on Monday also spoke out against Vietnam’s blogging community for reporting on “rumors” and conflict within the government, saying “hostile forces” were using the Internet to “slander” the country’s leadership.

With at least 14 journalists behind bars, Vietnam is Asia’s second worst jailer of the press, trailing only China, according to New York-based Committee to Protect Journalists (CPJ) research.

Many of those in detention have been charged or convicted of anti-state crimes related to their blog postings.

Reported by Joshua Lipes.