Financial Crisis in Vietnam

As the world community focuses attention on Egypt and on the political crisis in its surrounding countries, the financial crisis in Vietnam is spreading subtly and speedily. If Vietnam's financial crisis cannot be handled by its government properly, Vietnam can become a new financial disaster center in this region.

When the International Monetary Fund (IMF) advocates Asian countries to use their respective currency appreciation to resolve inflation problem; but of late, the devaluation of Vietnam's currency Dong against the US dollar has already reached as high as 9.3 percent. Such a development has caused export pressure to Vietnam's neighboring countries.
In 2003, since Vietnam implemented its Free Trade Area, the speedy economic growth of Vietnam and the economic future and prospect of Vietnam were viewed by all sectors as very good. Vietnam has even been viewed by many as "the next China."

Pursuing Rapid Economic Growth
However, to pursue rapid economic growth, Vietnam has introduced massive foreign investment to its country. Vietnam has absorbed more foreign capital than what its own economy could bear. Within a short period of less than one year, Vietnam has already faced severe inflation and its economic bubble has burst. All of a sudden, Vietnam's economy plunged into the verge of collapse. It was only through the Vietnamese Government's strong intervention that Vietnam was able to barely stabilize the spread its financial crisis.

At present, Vietnam's currency has devalued drastically and its inflation is getting out of country. At this juncture, no one dares to optimistically speculate if the financial crisis in Vietnam has indeed reached the bottom and from now onward, Vietnam's financial outlook should face a brighter future. This is because simultaneously, political and societal crisis have also emerged in Vietnam. If the Vietnamese Government cannot handle these entire crisis properly, the ruling party of Vietnam which is described as an evergreen party that can last a thousand year, may face collapse and disintegration. In short, Vietnam has suddenly turned into a modern apocalypse for other countries to observe of how a developing country can suddenly suffer such a severe setback.

To the outside world the multiple crises in Vietnam have seen to burst out too sudden and too fast. Although on the surface, whether it is in the area of politics or economy, Vietnam has given the outside world an illusion of progress and prosperity. But in actual fact, the problem relating to Vietnam's real structure crisis has long existed. But all along, Vietnam's ruling party refuses to face the fact. This has led to the present deteriorated condition in Vietnam that is difficult to clean up.

Toward Open Reform Process
In 1986, Vietnam has already begun to push forward economic reform. Vietnam has, from the past collective economy gradually transformed and transited into a free market socialist economy. In 2007, Vietnam entered the World Trade Organization as an equal status member. The fact that Vietnam can become a member of this international organization has reflected the reality that Vietnam has already gone through its past suffering and adversity, entered a better road and allowed its politics to move toward an open reform process.

The steady and rapid growth in trade and economy in Vietnam has helped to resolve its foreign debt crisis and the people in Vietnam are full of confidence and hope toward the nation's future. It is because of such development that many Asian countries have used Vietnam as a good development model and vowed to follow the economic growth path of Vietnam. Many other Asian countries hope that like Vietnam, their countries also can also go through economic and economic reform similar to that of Vietnam within short period of time. Many Asian countries also hope that they can promote the development of Free Trade Area and together with Vietnam, also enjoy a new era of political reform and economic prosperity.

Present Danger and Situation

However, at the 2006 Annual General Assembly of the Communist Party of Vietnam, the leadership transition process for both Vietnam's party leadership and its government leadership from one generation to another has set off the nightmare of Vietnam's present danger and crisis. Because of the fact that the Communist Party of Vietnam is the single domination ruling party that controls Vietnam's political, economical, societal and communication media, the Communist Party of Vietnam has become Vietnam's 'thousand-year" evergreen and an unmatched ruling party in the country.

However, when a party such as the Communist Party of Vietnam takes up a single party dominant structure that has also controlled too many vested interests, benefits and resources of the nation, it has the tendency to produce too many self-interest pipelines for their leaders and create issues relating to corruption and abuse of power.

Impact of Asian Financial Crisis
After Vietnam went through the Asian financial crisis, the Communist Party of Vietnam did carry out innovative efforts to encourage local people with good reputation as well as with good international experience to take part in politics to push forward its economic reform.

As such, under Vietnam's favorable condition of having geopolitical competitive advantage, the economy of Vietnam has also begun to rebound from the valley and appeared to attain an affluent and prosper economy on the surface. Because of the fact that the United States has the intention to pull Vietnam closer to its side in order to strengthen the US controlling power and influence in the South China Sea, the United States has given Vietnam many opportunities to participate in international organizations' programs and activities. Overnight, Vietnam has entered an international community that is fully open. However, Vietnam's political structure could not adjust to such changes. As such serious crisis occurred within the nation.

Communist Party of Vietnam's Interest
The conservative fraction of the Communist Party of Vietnam that controls major party affairs felt uneasy and shock when the reformation fraction of the party wanted to expand its full fledged influence and demanded the ruling party and government to carry out comprehensive reform. On the handling of personnel, financial affairs and vested advantage, the reformation fraction wanted these issues to be done in a transparent manner.

However, leaders from the conservative fraction were disturbed and shocked about such reformation measures. This was because all along, they were the ones who have taken up the vast and wide vested interest of the Communist Party of Vietnam. How could they withstand the impact of such party reform? As so, the conservative faction of the party began to make plot and block the reform in Vietnam. At the recent Communist Party of Vietnam reelection, this rule party has appointed Nguyen Phu Trong as its secretary general and it seems that the retaining of its Prime Minister Nyuyen Tan Dung who was earlier rumored to step down was a compromise reached between the conservative and reformation fraction of the party.

Development Trend
In recent years, the developments in many developing countries have also suffered the bottleneck phenomenon. One of the main reasons is due to the fact that the reformation pace of the ruling parties in these countries cannot catch up with the pace of advancement in economics, societal and political progress of their countries.

As of today, some of the ruling parties in the developing countries have not even gotten rid of the Lenin's political decisionmaking model. Under these governments, many decisions relating to personnel, finance, party affairs are manipulated and controlled by the different political factions within the party. Under such development trend, outstanding party talents that process good image and integrity can suffer what is termed as "count-you-out" phenomenon. Good leaders could be phased out in the process. Moreover, when it is general election time, since the talents of the ruling party are limited, the ruling party leaders must depend on money politics and money power to gain the different political camps' support to win the election battle.

However, once the ruling leaders counted on the support of the different camps within the party through money power and money politics to win the election, the ruling party has to pay a high price to reward their supporters for what they have done. Second, those politicians from the different political camps who depended on money power to retain their position and power are usually those without any lofty goals to implement good national policy for the people. These politicians only know how to please the voters blindly. As such, they tend to give out astonishing welfare checks to the people and caused massive deficits in their nation's federal treasury. To many countries, the problem in Vietnam can serve as a good warning and lesson for many countries to learn.