(This article is a personal observation on Vietnam’s socio-political landscape from 2006 to 2015, viewed through the eyes of a returning entrepreneur, Dr. Nguyen Quoc Toan.)
The year 2016 marked a turning point for me: ten years after returning to Vietnam following more than a decade abroad, and the end of my 40s. This essay encapsulates my highly personal (and non-academic) observations of the decade from 2006 to 2015, coinciding with a key transition in Vietnam’s government term.
For me, that decade was defined by five critical, interrelated forces:
- The rampant rise of crony capitalism, which General Secretary Nguyen Phu Trong termed “group interests.”
- The peak of systemic budget mining within the public sector.
- A comprehensive crisis in the national education system.
- The explosion of social media as a powerful force in political life.
- The ensuing great exodus of Vietnam’s knowledge and capital elite.
The dominance of crony capitalism
The past decade saw the most explicit manifestation of crony capitalism in Vietnam. This “group interest” phenomenon is the fusion of private companies and state officials to secure non-competitive privileges for exploiting state resources or market advantages. The most common phrase heard during this period was, “This territory belongs to Mr. A; that one is controlled by Ms. B.” It seemed no major business deal could proceed without the political patronage of a high-ranking official. Economic relationships were entirely replaced by complex political-business entanglements.
The inherent danger of this cronyism is that it creates an uneven playing field, locking out legitimate businesses and granting monopolies to the politically connected. These “group interest” firms exploit resources and typically cause long-term harm to consumers. In finance, cronyism means using political power to forcibly acquire companies. In education, it means granting one company the sole right to supply a service or equipment that students and parents are forced to buy. In real estate, it means changing zoning laws or obtaining prime land through political favors.
Instead of transparent, long-term development, Vietnam appeared to be sliding toward the development paths of nations plagued by deep-seated cronyism, such as the Philippines, certain Latin American states, or pre-reform Russia and China. If not checked, these large corporations will eventually dictate the political economy, silence critics, and truly destabilize the political system, becoming the hidden force that elevates and removes leaders. When politics is determined by money and connections, the state becomes merely a tool of large capitalists, embodying a primitive and repulsive form of capitalism, far removed from the socialist ideals of the Party.
The problem of budget mining
The second critical issue was the “budget mining” or “looting of the state budget” (to borrow a phrase from Dr. Tran Vinh Du). The decade was marked by reckless, high-spending decisions by local governments. Hundreds of millions of dollars were poured into non-essential public works—excessive pagodas, monumental statues, and colossal administrative centers. Public projects became the easiest way to siphon funds from the state. A vanity project worth hundreds of billions of VND would be assigned to a politically connected construction firm, which, acting as the prime contractor, would share the proceeds with the decision-makers.
The most shocking and infuriating aspect was that despite everyone knowing about the blatant waste and theft, the central government appeared unwilling or unable to decisively intervene.
This paradox has a political explanation. The central government is primarily assessed by two bodies: the Central Committee (largely composed of provincial leaders) and the National Assembly. Since the Central Committee holds the real power to elect the Politburo and the Prime Minister, and the National Assembly’s confidence vote is mostly symbolic, local leaders hold critical leverage. This creates a political trade-off where local governments receive tacit approval for frivolous spending in exchange for political support, particularly mid-term. To prevent this squandering of resources, Vietnam must design a mechanism that ensures the accountability of local leaders and the decision-making independence of the central government.
The power of social media and the education crisis
Social media fundamentally altered Vietnam’s socio-political dynamics. The Vietnamese public is no longer a passive recipient of state media. Social networks became the primary outlet for collective frustration and outrage. Where citizens abroad might stage a street protest, Vietnamese citizens organize an “online protest.”
Social media’s influence grew so immense that public opinion successfully steered mainstream media, forcing changes on issues like controversial tree-cutting projects, tablet computer policies in schools, and food safety scandals.
Looking at politics and media relations, social media effectively canceled two incumbent ministers—those of Education and Health—while public sentiment affectionately rallied around former Minister of Transport Dinh La Thang. While the Education and Health ministries had made efforts, their handling of media was disastrous. The Ministry of Health was clumsy and consistently reactive; the Ministry of Education appeared arrogant, treating the public with a paternalistic attitude and issuing shock policies (like the $1.5 billion project or the university entrance exam likened to “gambling”) without genuine, self-critical explanation. Meanwhile, just one widely circulated photo of Mr. Thang surveying an accident site was enough to win over millions of hearts, which arguably contributed to him being elected directly to the Politburo.
For me, as someone deeply involved in education and a parent, the crisis in education was the most painful observation. Curricula remain decades behind international standards. Scandals over outdated textbooks are rampant. The content my children study is virtually unchanged from what my father and I studied 30 to 50 years ago. Teaching remains dogmatic and creativity-stifling. Curricular reforms never seem to finish.
The looming promise of AEC and TPP integration was met with managerial complacency, even though over 80% of high school graduates scored below average on the English exit exam. Bilingual education and the teaching of foundational sciences like Math and Science—the basis for an “innovation nation”—were constantly undervalued.
The great exodus: Insuring against instability
The lingering economic volatility from the 2008 crisis, coupled with chronic instability, environmental pollution, and food contamination, triggered a quiet but profound phenomenon: the buying of “insurance policies” in the form of a foreign passport or residency.
In 2006, when I returned, the common topic among financiers was “where to invest.” In the past few years, the constant conversation has shifted to “where to emigrate” and “how to transfer capital abroad.” People are leaving because they see persistent instability: economic unpredictability, severe environmental crises, ubiquitous toxic food, and, most critically, an outdated education system incapable of preparing their children for an undefined future.
Among every ten business owners I met, at least three or four had permanent residency in a Western country, and more than half of the rest were actively preparing applications. The major difference is that this exodus is not ideological; it is being led by the most successful and intellectual elite. They are leaving with immense capital and intellectual power—a brain and capital drain larger than all previous exoduses combined. (For myself, the only reason I would ever leave is if I could no longer stand the systemic dishonesty occurring here.)
The call for responsible governance
As of 2016, I see a glimmer of optimism in the Communist Party’s actions. Leaders seem to have felt the heat of public discontent. Corruption is now formally labeled a “national scourge.” Recent high-level appointments and cadre rotations suggest a genuine move toward reform. The current administration has a relatively young leadership cohort. Media and social networks are given more weight. Officials now react to public opinion, and even if some of their actions are merely “performative,” this acknowledgement of public sentiment is a significant step forward.
I sincerely hope that the government in this next decade will solve these deep-seated problems. Vietnam needs a more decisive government, one that empowers its technocrats and holds officials personally accountable for their decisions. We must transform Vietnam into an “Education Nation,” where the study of English, Math, and Science is paramount.
The government should be more open to social critique. They should view it as a mirror, not a weapon. Stop labeling social critics as “peaceful evolution agents” or “reactionary forces.” The Communist Party of Vietnam has always reinvented itself in times of existential crisis. It is time for that reinvention now—to embrace change for a better country.
A close economist friend of mine once said with great bitterness: The biggest irony and tragedy of the current political system is that it takes responsible, patriotic, and pragmatic citizens (like us, who in some ways benefit from the system) and forces us into dissent. We deeply love this country, but this system must change positively, lest it turn patriots into political dissidents.
