Good morning! Welcome to the latest edition of the Vietnam Weekly, written by Ho Chi Minh City-based reporter Mike Tatarski. The Friday newsletter is always free to read.
On Tuesday, I published an article for paying subscribers on new General Secretary Tô Lâm’s pledge to keep the anti-corruption campaign “relentless,” the end of the high-profile FLC Group trial, and more. If you haven’t already, you can upgrade to a paid subscription below. The Vietnam Weekly is entirely supported by such subscriptions.
Following up on last Friday’s newsletter, the Cambodian government broke ground on the controversial US$1.7 billion Funan Techo Canal on Monday, with Prime Minister Hun Manet proclaiming “We will build this canal, no matter the cost.”
There won’t be a new Vietnam Weekly Podcast episode on Monday - my apologies, but some weeks end up being a scheduling nightmare.
On to the news.
HCMC Isn’t Spending its Money, Part 32
It’s time for a periodic check-in on how Ho Chi Minh City is doing (apologies to Hanoi).
Officials recently reviewed the year since Resolution 98, a special mechanism aimed at giving the city more administrative and financial autonomy, came into effect.
On the positive side, Thanh Niên quoted city chairman Phan Văn Mãi as saying: “After one year of implementation, I assess that Ho Chi Minh City has achieved a volume and quality, creating a more fundamental foundation than the period of implementing Resolution 54. [Editor’s note: this policy, implemented in 2018, was also designed to give the city greater decision-making autonomy.] In the coming time, Ho Chi Minh City will complete the strategic investor policy; deploy the HFIC [Ho Chi Minh City State Financial Investment Company] mechanism to become an investment financial institution; deploy carbon credits, TOD [transit-oriented development], and a number of large projects such as the Cần Giờ international transit port, urban railways..."
He also highlighted accomplishments related to e-governance, the creation of digital databases for both the public and government agencies, and poverty reduction.
All of this is admirable and certainly worth highlighting, but the city continues to struggle mightily with physical infrastructure and public budget disbursement.
Through July, just 15% of the target budget for the year had been disbursed - VND11.8 trillion (US$468 million). To reach the goal the city set for itself, officials will have to spend at least VND10 trillion (US$398 million) per month for the rest of 2024.
I don’t think you need me to explain how difficult that will be.
Officials have already transferred VND13 trillion from slow-moving projects that can’t use that funding this year, including the chaotic An Phú Intersection, the bane of anyone attempting to enter/exit the Hồ Chí Minh - Long Thành - Dầu Giây Expressway. (I’ll reiterate my not particularly bold prediction that this intersection will be a disaster once Long Thành International Airport opens.)
The first metro line is stuck in bureaucratic purgatory with no realistic opening date, even as officials say they are “determined” to build 183 kilometers of metro lines by 2035. Hanoi, in the meantime, opened the elevated section of its second line yesterday morning after 15 years of construction and many delays.
I could go on, but you get the idea. This public budget issue isn’t unique to HCMC within Vietnam, but it’s perhaps most acute here given the city’s many critical, well-documented urban development challenges.
Officials portrayed the first year under Resolution 98 as laying the groundwork for faster movement in the future, but there’s no time to waste at this stage.
The Verification Proposal
Staying in HCMC, last month the municipal Department of Information and Communications proposed rules that would only allow people with verified accounts to comment on social media platforms.
According to VnExpress, the department’s director “suggested banning all unverified social media accounts in the long run,” but prohibiting such accounts from commenting on posts would be the first step.
This would cover accounts from platforms based outside of Vietnam as well and require account owners to provide their real names, phone numbers, and email addresses.
I’m not sure why something so sweeping and (surely) controversial is being proposed at the city level, and there hasn’t been follow-up from the national government (unless I missed it), but this would be an enormous deal if implemented.
As with the recent bank transfer regulations, officials highlighted the prevalence of online scams as a reason for more online control - that’s a real problem, as scams are increasingly widespread and sophisticated. Scammers even took advantage of those new transfer rules to scam people.
But the coverage also makes other concerns clear: “rampant anti-state accounts, and how to manage information on the Internet and these accounts.”
Despite the use of ‘rampant’ there, the HCMC information department has only detected 18 cases that violate cyberspace regulations this year, and 24 in all of 2023.
This is worth keeping an eye on, but it’s hard to see such a proposal moving forward, at least for platforms like Facebook and YouTube - Zalo and other domestic companies could be a different story.
Not a Market Economy
The United States Department of Commerce issued its decision on Vietnam’s non-market economy status on Friday: the status remains unchanged.
According to a brief public statement, the DOC “received over 36,000 pages of comments from U.S. domestic industries as well as the Government of Vietnam. Commerce appreciates and commends U.S. domestic industries as well as Government of Vietnam’s extensive participation in Commerce’s transparent, quasi-judicial process. This determination was based on a thorough evaluation of all the comments submitted.”
Vietnam’s Ministry of Industry Trade, which lobbied particularly hard on this issue, said it “regrets” the decision.
Voice of Vietnam published an eye-catching story titled ‘Slanderous allegations about Vietnamese market economy come under fire,’ explaining that “On their websites and fanpages, reactionary groups and organisations held discussions and forums, drumming up the results of their lobbying activities with the US Government, asking it not to recognise the market status of the Vietnamese economy.”
The article closes in a colorful manner: “It’s undeniable that the socialist–oriented market economy Vietnam has pursued over the past decades has yielded important gains, helping to improve the material and spiritual life of the masses to boost the country’s image internationally. Judging from that fact, such slanderous allegations by reactionary forces will soon sink into oblivion.”
State media also highlighted the fact that Costa Rica recognized Vietnam as a market economy on Monday, becoming the 73rd country to do so.
Data Corner
195: The number of planes with air operator certificates currently held by Vietnamese airlines, down from 231 a year ago due to a global engine recall. On an average day, 167 of these aircraft operate.
100: The number of kilometers from Nha Trang that a Chinese military drone flew within last week. A second drone flew a similar course on Wednesday.
333: The number of millimeters of rain (over 13 inches) parts of Quảng Ninh Province received on June 9, shattering a national record. Intense rain across northern provinces through June and July killed 48 people.
90%: The percentage of Vietnam’s population that has a mobile broadband subscription, surpassing the government’s target of 87.5% by the end of this year.
Extra Links:
Vietnam is the latest battleground in BYD’s bid to dominate Southeast Asia’s EV market (Rest of World)
Understanding The Origins Of The Vietnamese Legal System (Postcards from Vietnam)
Philippines, Vietnam to hold first-ever joint coast guard exercise (Reuters)
Southeast Asia pushes back on cheap Chinese imports (Nikkei Asia)
In choice of mangroves or livelihood, Vietnam shrimp farmers choose the latter (Mongabay)
Have a great weekend!
Referring to the Market Economy section of your piece - whoever advised GOV / MOIT that submitting an application for determination (I believe it was submitted 09/2023) of a change of status, in the middle of the US election cycle, involving high levels of protectionist rhetoric and policies coming out of both parties, they should be fired for incompetence.
Why does the government have such a hard time spending money? Seems like a strange problem to have.