In Vietnam, where politics and daily life rarely mix

Night in Hanoi

Even in the unusually cold and wet weather, the centre of Hanoi was still a typical whirl of commercial activity this past week, as people prepared for the Tet lunar new year holiday.

Half an hour's drive away, in a bland hall resembling an airport terminal, Vietnam's political future was being decided by 1,510 delegates, all chosen by the Communist Party, which has a constitutionally-enshrined monopoly on power.

It might have been happening on a different planet.

Of course people knew the party congress was going on; how could they not? Hanoi is festooned with red-and-gold posters celebrating this secretive, five-yearly ritual in the communist calendar in characteristically retro style, all muscular workers and peasants radiating revolutionary joy.

But no-one I spoke to felt any sense of connection to a process from which they are mostly excluded.

Image caption The Soviet-style propaganda posters adorned the city for this week of the congress

"We talk about it a lot, we watch TV", says Duong Bui, the 22-year-old lead singer for heavy metal band Windrunner, which was performing at the recently built Hanoi Creative City art space.

"But to reach it is hard. It's not like we can take our ideas for building this country to the congress - it's far from us."

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Media captionDuong Bui: Music helps build Vietnam society

A battle at the heart of power

Vietnam follows the classic communist doctrine of democratic centralism, whereby the party is the only permitted political player. Once decisions have been made inside the organisation party members are expected to toe the line. Debates are usually resolved before the congress, which holds the highest authority in the party.

But that did not happen this time.

Prime Minister Nguyen Tan Dung made a bold play to win the top job, that of secretary-general of the party. He presided over the transformation of Vietnam's economy into an export-driven, manufacturing success story. Moving into that post would have made him one of the most powerful leaders of modern times.

Image copyright AFP
Image caption Mr Dung was always a controversial figure within his party

He had an unusually high international profile for a Vietnamese leader, pushing for warmer relations with the old enemy, the United States, and demanding faster reforms in bloated state industries. He built up a network of influence in the security forces and the local business community. Up until a few months before the congress, he appeared to have strong backing from the 200-member central committee of the party, which had helped him ride out at least two previous attempts to remove him from power.

So what went wrong? One sign support was slipping was a leaked letter, apparently from Mr Dung, responding to serious allegations against him by three academics. That he needed to respond suggests the allegations had powerful backers.

Image caption Although the secretive congress went on through the week, most people felt little connection with the process

It is worth remembering that for all his charisma and public popularity, Mr Dung was a controversial figure in the party. His family had gained wealth and political promotions; with rapid economic growth corruption had also proliferated; and his efforts to privatise the state sector had made slow progress.

What we do know is that by the time the congress began last week, Mr Dung was not among the candidates approved by the politburo to be the next secretary-general. An attempt by his supporters to get him onto the next central committee, where he might have been able to challenge the incumbent, Nguyen Phu Trong, fell flat partly thanks to Mr Trong's expert use of the Byzantine rules governing the congress.

Image copyright Reuters
Image caption Mr Dung walks past Mr Trong during the congress which saw a battle between ideologies

Mr Trong, an old-style ideologue, was a long-standing rival of Mr Dung. With his victory, it would appear that conservative factions of the party now predominate, casting doubt on Mr Dung's reform agenda.

Mr Trong's reaffirmation at the start of the congress that socialism and the state must remain at the heart of the economy seemed to support that view. But the party does not divide up so neatly. In fact the new central committee includes a number of younger, pro-reform politicians, and Mr Trong's options for changing course are limited.

"Life is stronger than any dogma", says economist Le Dang Doanh, "and the condition of the economy of Vietnam nowadays is so pressured that it must change. If the state sector plays a leading role, there will be no fair competition. Vietnam is now deeply integrated into the world economy."

The state-owned industries are a case in point. A legacy of the command economy built during the long war against the French and Americans, they are everywhere, making cars and ships, milk and clothing. They account for almost a third of GDP and consume most of the credit in the local banking system - most of them make a loss.

Image copyright AFP
Image caption Vietnam's government had high hopes for the shipbuilding industry

Mr Dung had encouraged a few SOEs to become national champions, allowing them to expand. It was a disaster. The state-owned shipbuilder and shipping line collapsed under ballooning debts. So in recent years he has encouraged them to restructure, partially privatising and selling off unprofitable businesses. But this is not easy.

Just ask Tran Viet, a director of the huge textile conglomerate Vinatex, which has become one of the most successful state-run companies, exporting suits and shirts to the US and the EU.

"As a stated-owned enterprise we were bound by a lot of conditions and regulations - a lot more than a private company. We cannot just go in and shut factories down."

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Media captionWill Vietnamese state-run firm Vinatex be able to compete in a competitive global market?

On a visit to one of Vinatex's many factories I was taken around by Nguyen Thi Phuong Lan. As she proudly showed me the factory kindergarten, the clinic and dormitories, she said her parents and grandparents had worked there, and she expected her children to do the same. "It's like a family to us", she explained.

In the brutally competitive global market in which Vinatex now sells most of its products, how much of its collectivist legacy can it afford to keep?

The old men of the communist party are ideologically loyal to this legacy. But the reality of raising living standards, to sustain the party's legitimacy, will force them to rely increasingly on the tremendous entrepreneurial energy of the Vietnamese people.

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