Where is Vietnam heading under leadership of new General Secretary To Lam?

◆On July 19, 2024, Ngyuen Phuc Trong, who had been serving as the General Secretary of the Communist Party of Vietnam for 13 years, passed away. Vietnam’s President To Lam succeeded Trong as the new General Secretary on August 3, 2024. Overseas investors may worry regarding the transition of power in terms of the possibility of its causing economic and political unrest. However, the author considers such worries to be unnecessary. Rather, under the leadership of Lam, Vietnam is expected to continue carrying on economic reform, and to become a more favorable nation with a good business environment under which overseas companies can enter and do business. It is unlikely that Vietnam will face political instability of the sort that could cause foreign capital inflows to be impeded, as in Thailand, Malaysia, and Myanmar.

◆Under Trong’s administration, Vietnam not only saw a continuous increase in foreign direct investment, but also experienced a rise in the share of exports in its GDP. The fact that Vietnam has become a country that achieves growth through both domestic demand and foreign demand proves Trong’s achievements. However, it should also be noted that there are economic issues which Trong was not able to completely solve. Ongoing reforms are in need to address these remaining issues, such as inefficient management of state-owned enterprises, military business, innovation, and the shortage of electricity.

◆Under Lam’s administration, Vietnam is expected to proceed with economic reform, continue Bamboo Diplomacy to maintain good international relations, and enjoy a stable domestic political environment.