How The Ruling Elite In Vietnam Was Formed

In December 2020, a special issue on Vietnam was released by the Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO), titled Pathways to Prosperity in Vietnam: Structural and Transitional Inequality in the Distribution of Opportunity. [1]

The IDE specializes in studying economic, political, and social issues which affect developing countries and regions. This institute is under the Ministry of Economy, Trade, and Industry of Japan.

This special issue features a remarkable study of the political elite in Vietnam by Futaba Ishizuka – an outstanding scholar with extensive research work on Vietnam. Her work is entitled "Political Elite in Contemporary Vietnam: The Origin and Evolution of the Dominant Stratum."

“Nomenklatura”: From the Soviet Union to Vietnam

Futaba Ishizuka connects the situation in Vietnam to the concept of "nomenklatura," which was used to refer to the ruling class of the Soviet Union. Literally, it means "a list of names." It also refers to a list of key positions and the people who were appointed. [2]

There are three main features of the nomenklatura mechanism in the Soviet era.

First, politicians in the nomenklatura hold absolute state power under a one-party totalitarian regime.

Second, political power produces economic power. All significant means of production are under the control of the nomenklatura. This creates a super-monopolistic empire unmatched by any capitalist. The nomenklatura is exempt from all legal and political responsibility for any acts of corruption if they serve the interests of their social class.

Third, the model of nomenklatura creates a hierarchical system in which every position needs to be approved by a person holding a higher rank. Therefore, one cannot get a promotion in this system on one’s own, and those who want to climb to a higher position must join smaller sub-factions within the system itself.

According to the author, Vietnam also follows the nomenklatura model. However, the concentration of wealth and power is less than that of the former Soviet Union or Eastern Europe, probably because of the Vietnam War where resources were all put towards the military. After the Vietnam War ended, the Vietnamese political elite quickly accumulated wealth.

The Privilege of Vietnam's Political Elite

The author cites studies that illustrate the privileges reserved for high-ranking cadres, even in times of war.

The rationing system during the Vietnamese subsidy period is a good example. The rice rations that the State distributed to the populace were often not enough to meet basic needs. The distribution could also be delayed, and people had to queue from early morning at government stores to receive rice. Therefore, people often lived in a state of anxiety and stress.

By contrast, senior officials were given too much rice of the best quality without delay or queuing. They were also given priority to shop in particular and specialized stores to buy more and better food, clothing, as well as foreign goods.

The Central Committee members had their own cars and drivers, so they and their families could go out on weekends and during summer vacation. Each member of the Politburo or the Secretariat could also charter a plane to attend conferences or take vacations.

Even high-ranking cadres took advantage of the business trips to smuggle goods in large quantities and receive precious gifts from foreign counterparts. At that time, workers and low- and middle-level officials could only use bicycles to go to work. [3] [4]

Vietnam's political elite at that time was mostly composed of hereditary politicians. Children of the Party elite were given the opportunity to study in prestigious colleges both at home and abroad, while those from the other social classes were not afforded the same opportunities.

Because of this, only children from the elites were qualified to enter the bureaucracy and take up privileged positions in the government. Children of Party cadres rarely become workers or artisans. [5]

After the Doi Moi era, Vietnam's economy changed from a state-owned and collective-dominated economy to a multi-sector economy. Subsidies for state-owned enterprises (SOEs) were generally reduced. The means of production were predominantly privately-owned and guaranteed by the Constitution. These changes were a big step forward for Vietnam's economy and several entrepreneurs have even been recognized by Forbes magazine as billionaires.

However, Ishizuka points out that until this day SOEs still dominate the private sector in terms of access to essential resources such as credit and land. She cites that as of 2017,  the state sector still accounts for nearly 30 percent of the country's GDP, and out of 10 enterprises with the largest revenue in Vietnam, nine are SOEs; the remaining private enterprise has foreign investment capital.

In 2020, this number rose by 1, making 2 out of the 10 enterprises privately owned in that year; these companies were Vingroup and Mobile World JSC. [6] This does little to change the status quo with SOEs still remaining dominant.

As for the private sector, most big private businesses became the backyards of officials or their business affairs were linked with the interests of the Vietnamese Communist Party (VCP) and State officials. Although the Law on Cadres and Civil Servants prohibits them from participating in the establishment or management of private enterprises, in reality, many civil servants still engage in one way or another. [7]

Rampant Corruption Among the Privileged Class

Futaba Ishizuka assumes that Vietnam's political elite is a privileged class. This assessment is based on two aspects: the level of wealth accumulation and the ability to monopolize positions in the state.

Regarding the degree of wealth accumulation, she cites a few studies as proof that rural households, whose relatives are government officials, have better access to credit. These people have invested more in the land than households with no relatives working as state officials. [8][9]

She also cites a study by Benedict  Kerkvliet (2014), in which the author provides figures on the wealth appropriated by the country's top former leaders, which amount to billions of dollars each.[10]

The worth of corrupt officials' assets is far beyond their income and was sometimes inadvertently revealed in the news. This news could cause immediate outrage, but the fact that high-ranking officials are wealthy comes as no surprise to the Vietnamese people. [11]

Regarding the ability to monopolize positions in the state, Ishizuka says that today, there are not many leaders who are still greedy for power when compared to the pre-Doi Moi era due to the age and term limits for positions.

However, she also cites a 2014 study that showed a significant impact a father's Communist membership card had on his child's appointment to State positions. [12]

In addition, the studies by Coxhead and Phan (2013, 2020) show a widening gap in educational investment and achievement between children of the populace and the children of government officials. This has led to a situation where "nepotism kids" have easier access to higher education, as well as being able to get lucrative jobs in the state. [13]

Likewise, these studies by Coxhead and Phan (2013, 2020) also present a widening gap in educational investment and achievement between children of households with staff who are Party members and those without.

This has resulted in a situation where privileged children and grandchildren of Party officials have easier access to higher education, as well as being able to get lucrative jobs in the state apparatus. [13]

After pointing out the corruption that exists in the system, the author also analyzes the anti-corruption campaigns launched by Party leaders, especially during the VCP’s 12th term.

She concludes that the anti-graft campaign was only successful in punishing a few individuals but not effective overall. The ultimate goal of the VCP is still to protect its party-state system and not disrupt it. Therefore, this kind of anti-graft campaign will not prosecute those who are at the top of the Party.

References

1.  Pathways to Prosperity in Vietnam: Structural and Transitional Inequality in the Distribution of Opportunity: The Developing Economies: Vol 58, No 4. (2020). Wiley Online Library. Retrieved 2022, from https://onlinelibrary.wiley.com/toc/17461049/2020/58/4

2.  Voslensky, Michael. 1984. Nomenklatura: The Soviet Ruling Class. Garden City, NY: Doubleday.

3.  Bùi, Tín. 1993. “Mặt thật” [Real face]. Saigon Press. https://www.vinadia.org/mat-thatbui-tin/

4.  Porter, Gareth. 1993. p. 63. Vietnam: The Politics of Bureaucratic Socialism. Ithaca, NY: Cornell University Press.

5.  See 3.

6.  Công bố Bảng xếp hạng VNR500 – Top 500 Doanh nghiệp lớn nhất Việt Nam năm 2017. (2017, December 5). Vietnam Report. https://vnr500.com.vn/Cong-bo-Bang-xep-hang-VNR500-%E2%80%93-Top-500-Doanh-nghiep-lon-nhat-Viet-Nam-nam-2017-7504-1006.html

7.  VnExpress. (2011, June 29). Công chức làm giàu bằng cách nào? vnexpress.net. Retrieved 2022, from https://vnexpress.net/cong-chuc-lam-giau-bang-cach-nao-2198813.html

8.  Markussen, Thomas, and Finn Tarp. 2014. “Political Connections and Land-Related Investment in Rural Vietnam.” Journal of Development Economics 110: 291–302.

9.  Đỗ, Thiên Kính. 2012. Hệ thống phân tầng xã hội ở Việt Nam hiện nay [The current social stratification system in Vietnam]. Hanoi: Nhà Xuất Bản Khoa Học Xã Hội.

10.  Kerkvliet. 2014. “Government Repression and Toleration of Dissidents in Contemporary Vietnam.” In Politics in Contemporary Vietnam: Party, State, and Authority Relations edited by Jonathan D. London. Basingstoke: Palgrave Macmillan.

11.  See an example: Hạnh Nguyên. (2014, July 24). Trộm vào nhà, quan chức lộ ra vàng khối, tiền tỷ. VietNamNet. https://vietnamnet.vn/vn/kinh-doanh/trom-vao-nha-quan-chuc-lo-ra-vang-khoi-tien-ty-187614.html (an example by the reviewer)

12.  Kim, Jee Young. (2004) “Political Capital, Human Capital, and Inter-generational Occupational Mobility in Northern Vietnam.” In Social Inequality in Vietnam and the Challenges to Reform, edited by Philip Taylor. Singapore: Institute of Southeast Asian Studies.

13.  Coxhead, Ian, and Diep Phan. (2013). “Princelings and Paupers? State Employment and the Distribution of Human Capital Investments among Households in Viet Nam.” Asian Development Review 30, no. 2: 26–48;_____(2020). “Persisting Privilege? Institutional Education Gaps during Vietnam’s Economic Boom.” Developing Economies 58, no. 4.