Exposing a growing rift in Vietnam’s one-party regime, the communist-controlled
National Assembly has rejected the government's US$56 billion plan to develop a
high speed north-south railway. The project, set to cost 60% of gross domestic
product (GDP) and based on Japan's cutting-edge Shinkansen technology, would
have cut overland travel time from Hanoi to Ho Chi Minh City (1,760 kilometers)
from about two days to around six hours.
The government has recently initiated several mega-projects, but this one was
surprisingly voted down by the assembly by a 178-157 vote on June 19. The
unprecedented result does not mean that Vietnam's legislature, traditionally a
rubber stamp for
Communist Party decisions, is evolving into an independent branch of
government.
The National Assembly consists almost entirely of Communist Party members with
just a few token independents. Convening for several weeks twice a year, its
members tend to lack the expertise and attention to play an active political
role. According to one well-placed source, the party's 14-member politburo, the
de facto highest power, declined to express a position on the railway project
and passed the issue to the assembly instead.
Stung by a series of controversial decisions in recent years, including one
concerning the expansion of Hanoi's city limits and a China-backed bauxite
mining project in the central highlands, the politburo's members were unable to
come to a joint decision. The National Assembly thus became the battlefield
where competing interest groups inside the party engaged in an unusually
spirited debate.
During the vote, a diverse coalition rose in opposition to the corporatist
government faction led by Prime Minister Nguyen Tan Dung, which initiated and
strongly backed the multi-billion dollar railway plan. While the particular
vote of each legislator has not been made public, delegates more closely
associated with the military reportedly opposed the project. The military is
believed to be worried that the big-ticket mega-project would divert funds from
armed forces modernization programs.
Certain respected academics serving in the National Assembly questioned the
cost-benefit of the bullet train, pointing to Vietnam's still low stage of
economic development and high debt load and budget deficit. State debt has
surged to around half of GDP and the government is struggling to finance the
budget deficit, which is estimated at around 10% of GDP. Meanwhile, rising
inflationary pressures forced authorities to devalue the local currency on two
occasions last year.
However, some believe the chief concern over the railway project was the
potential for corruption involving Japanese contracts and aid. It would not
have been the first time. In the 2008 PCI scandal, four Tokyo-based consultants
pleaded guilty in Tokyo two years ago for bribing Ho Chi Minh City officials in
return for consulting contracts on a $400 million highway project.
The potential for graft on the high-speed railway project - from selling land
at inflated prices to kickbacks on equipment purchases - would have been
unprecedented. According to one Japanese diplomat, Dung, Planning and
Investment Minister Vo Hong Phuc and Transportation Minister Ho Nghia Dung were
all potentially well positioned to profit personally from the rail project.
There is no evidence that any of the mentioned ministers were involved in foul
play with the proposed project. However, the scheme was derailed at a time the
Communist Party leadership faces growing public criticism over corruption
issues. Although the party rejects checking and balancing democracy, it is
sensitive to public perceptions and pressures.
For instance, when the central government decided to quadruple the size of
Hanoi in 2008 by absorbing neighboring provinces, officials claimed that a
modern Vietnam required a physically larger capital city. However, certain
observers claimed that Communist Party officials who had invested in
strategically located parcels of land stood to make personal fortunes on the
government scheme.
Last year, Hanoi approved a highly controversial $15.6 billion plan to mine and
process bauxite in Vietnam's ecologically sensitive central highlands in
conjunction with a Chinese state-owned firm. Critics blew the whistle over the
Internet on the potential environmental and security risks, but senior
officials pushed ahead with the plan. A website critical of the project was
later attacked and shut down by anonymous hackers.
The bullet train project, some suggest, could have been the final straw. The
National Assembly's refusal of the project was ultimately a rejection of Dung's
growing affinity for expensive mega-projects. Squeezed between rising public
criticism and respected intellectuals calling for more responsible governance,
and with intra-party rivals exploiting the corruption card for political gain,
the prime minister's camp now finds its prospects in question.
Some now believe Dung and the key backers of his favored projects could lose
their posts at the next party congress, scheduled for January 2011. Whether
intentional or not, Vietnam's one-party National Assembly has cast its first
no-confidence vote against this or any other government.
The Hanoist writes on Vietnam's politics and people.
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