Vietnam: The party will not be railroaded

David Koh, For The Straits Times

For decades, the National Assembly of Vietnam has been better known as a rubber stamp. But on June 19, the legislature rejected a proposal by the government for a high-speed railway connecting the capital Hanoi and Ho Chi Minh City.

Observers are calling the move unprecedented. But their euphoria about the usually placid Assembly needs to be put in perspective.

The Political Bureau of the Vietnamese Communist Party still calls the shots. If it had felt that the project had to go ahead no matter what the cost, the politburo would have activated its marketing and mobilisation agents to persuade the Assembly and the nation that the railway was essential to the country's interests.

If push came to shove, discipline would be enforced to ensure that there were enough votes to back the project. The fact that this did not take place suggests that opinion within the top echelon of the party over the railway may still be divided.

Furthermore, this was not the first time that the Assembly had said 'no' to the government, though it was admittedly the first time that the legislature had rejected a major investment project the government proposed.

In the past 10 years, government nominations for ministerial appointments have been met with close scrutiny and sometimes even refusal by the Assembly. The nominee for the post of state bank governor in 1997, for example, was rejected.

Some nominations also received few votes although they were ultimately approved, signalling disapproval of the candidates among the Assembly members.

There are several reasons the railway proposal was rejected. Media reports outside Vietnam have cited the high costs of the project and argued that it would have added little value to the economy. Few in the country are likely to use such a railway, given that its high capital costs would have led to high ticket prices.

The railway's projected cost of US $56 billion (S $78 billion) would also have been doubled by the time corruption and embezzlement are factored in. The assemblymen worried about the government's plans to pay for the entire cost of the project through official development assistance. This would have meant imposing US $600 worth of foreign debt on every Vietnamese, young and old, just because of this project.

Another reason was the suspicion that by seeking approval for the project this year, the government was going to use that investment figure or parts of it to boost investment expenditure statistics, and ultimately GDP figures, for 2010. These increases could then be reported as successes at major political meetings.

While this suspicion may be unfounded, it reflects a longstanding concern that the authorities pay more attention to rosy statistics than to policy substance.

Vietnam has a long coastline and travelling by train from north to south would take more than 35 hours. Upgrading this railway line is an urgent priority and could help promote investment and economic growth in the coastal areas.

But it may make more economic sense to improve the present railway system by building one more track to allow trains to run in opposite directions at the same time.

Good roads leading to industrial zones from the railway line are also needed. In addition, thousands of kilometres of rural roads should be upgraded and widened to raise their capacity.

While the rejection of the high- speed railway may seem historic, it has not actually changed the power equation in Vietnam.

The writer is a senior fellow at the Institute of Southeast Asian Studies.