Vietnam's PM keeps cool in region's hottest seat

Greg Torode, Chief Asia Correspondent

As prime minister of Vietnam, Nguyen Tan Dung occupies one of the hottest seats in regional politics.

His country may be far from a democracy, but Mr Dung (pronounced Dzung) still must deal with some tough constituencies.

First, there are the Politburo and the two other leaders who sit at the top of the ruling troika, Communist Party General Secretary Nong Duc Manh and President Nguyen Minh Triet. And in the shadows are the often conservative party elders - old-guard revolutionaries - who still hold considerable influence across Vietnam's collective leadership.

More visible is the public. Vietnam's young and fast-growing population that is eager not just for continued economic growth, but for reforms and improved social conditions - whether greater freedoms or improved health and education systems. As the highest-profile of all Vietnam's leaders, Mr Dung is the lightning rod, the one who must keep them happy.

Then there is a far smaller grouping - the sometimes embattled band of foreign investors determined to make the most of Southeast Asia's second-biggest population and newest tiger economy.

Three years into his five-year term, Mr Dung, 59, has had to deal with all those domestic groupings as well as managing foreign policy - a complex effort to build ties with all major powers while ensuring Hanoi is beholden to no one.

Mr Dung had foreign investors and Beijing on his mind as he visited Hong Kong and Macau this week - the first official visit by a senior leader from modern Vietnam.

He sought to ease any fears from foreign investors that the international financial crisis would spark a further slowdown in Vietnam's reform process or lead to further coddling of inefficient state-owned enterprises. And by promoting ties with Hong Kong, he made clear he believed he was helping ties with China, Vietnam's giant neighbour and former enemy, and its most sensitive relationship.

"The potential for co-operation between Vietnam and Hong Kong is enormous," he told the South China Morning Post before his arrival.

"The two sides need to make greater efforts to tap and unleash this potential," he added, saying it could only strengthen Sino-Vietnamese ties in general.

And, according to sources on both sides, Mr Dung left Hong Kong after a long and relaxed banquet with Chief Executive Donald Tsang Yam-kuen at Government House satisfied there was a new momentum to the official relationship. For many involved in the private sector, it is about time, given an official relationship that has lagged more than 20 years of expanding trade, investment, tourism and social ties.

Smiling and apparently at ease, Mr Dung dealt with three business forums, insisting that Vietnam was "holding up" better than many in the region.

He anticipated growth in gross domestic product for this year dropping as low as 5 per cent - hardly enough to absorb Vietnam's growing ranks of young workers - but that recovery was close.

"Vietnam will meet its commitments to foreign investors," he said at one session, hooked up to major financial capitals, answering questions in Vietnamese. "Vietnam is a friendly and reliable partner."

If he seemed relaxed, on tour, it is tempting to think it could be because life is tougher at home. In late 2007, months before the global crisis was apparent, his government was grappling with double-digit inflation and asset bubbles as foreign currency flooded in.

With party conservatives worried about rising social discontent, he tightened liquidity - rattling alike, at times, foreign investors and the chiefs of freewheeling state-owned enterprises. Unpopular as he may have been at times, either by luck or good management, the tough action meant that Vietnam was better placed to cope than it might have been as international markets tumbled.

Amid the pressures, he has faced a lot of internal elements nipping at his heels.

"Foreign investors have come to see him quite favourably," a veteran foreign banker in Ho Chi Minh City said. "There was concern that he wouldn't be able to handle the economy or do enough to rein in the worst parts of the bureaucracy, but he has shown commitment and a willingness to listen."

On the streets of Hanoi and Ho Chi Minh City, it still may not be enough for many. Mr Dung took office amid unusually high hopes after a decade of being touted as a fast-rising star in the leadership.

The youngest prime minister in modern Vietnam, Mr Dung injected a touch of dynamism to the ranks of grey apparatchiks - even if, as a former Interior Ministry official and teenage guerilla fighter, he had enough polish on his party credentials. He had a law degree and had also headed the State Bank.

Initially, there were online, meet-the-public sessions and he appeared eager to cut a dash on the regional and international scene, playing golf and sporting sharp suits.

"I'm not sure he has ever really met our expectations," said Binh, a 28-year-old Hanoi broker. "There was a great deal of hope when he took office that he would be something really new - maybe the job and the system are just too difficult. It is hard to see him charting a new course at this point."

Amid the domestic pressure, some have also questioned the activities of his children - a frequent problem for Vietnamese leaders. His daughter, Nguyen Tan Phuong, has a master's degree in business administration from Geneva University and has managed Swiss investments in Vietnam - a pursuit that could have proved trickier had she represented a less neutral country. She is also married to a Vietnamese-American.

For the moment, however, there is little doubt Mr Dung is secure in his job - even if his precise legacy is still a work in progress. He repeatedly told his audiences that he hoped to see signs of recovery in the next three quarters of the year. After a tough three years, Mr Dung has his own reasons to hope his economic advisers are correct.