Vietnam PM's future uncertain as communists meet

BANGKOK — The political future of Vietnam's prime minister is hanging in the balance as communist party chiefs gather for talks overshadowed by financial scandals and economic malaise, experts say.
Nguyen Tan Dung, 62, has had little reason to celebrate since the communist-controlled parliament formally approved his appointment for a second five-year term in July 2011.
Hit by a string of scandals and a growing list of economic problems, observers say his leadership may be in danger, although his removal appears unlikely in the immediate future.
Rising public dissatisfaction over slowing economic growth, resurgent inflation, rampant corruption and banking turmoil have put Dung under growing pressure as the Communist Party's 175-member Central Committee meets this week.
The gathering is likely to see "a showdown between the prime minister and his critics", according to Vietnam expert Carl Thayer, emeritus professor at Australia's University of New South Wales.
"At the very least it is likely that the Vietnam Communist Party will attempt to cut back on the enormous powers accumulated by the prime minister and his office," he wrote in a report on Tuesday.
"The big question is whether the prime minister's critics will push for his dismissal," Thayer added.
The secretive Communist Party's Central Committee meeting began on Monday and is expected to last two weeks -- twice as long as usual -- highlighting the growing to-do list facing Vietnam's political mandarins.
"It is rare for so many subjects to be on the menu of a plenum and for it to last so long," Communist Party Secretary General Nguyen Phu Trong, seen as one of Dung's main rivals, was quoted as saying by party mouthpiece Nhan Dan.
"Most of the topics that we have to discuss and make decisions on are very important, difficult and sensitive," he added.
Experts noted that the Central Committee, which includes Dung, has the power to oust any member from its ranks or from the powerful 14-member Politburo, comprising top leaders.
Vietnam's authoritarian government is struggling to keep a lid on growing public discontent because of the rising popularity of blogs and other social media sites as an outlet for political expression.
The authorities have sought to crack down on bloggers with a series of harsh jail sentences, but online political blogs remain a hugely popular news source in the heavily censored country.
"Never before has a prime minister been so vigorously attacked in public because of economic problems and corruption," a Communist Party official said on condition of anonymity.
"It's a fight between one force which has the money and another which has the power, at the heart of the party, to tackle corruption and clean out its ranks," he added, referring to Dung and his economic allies on one side and his political rivals on the other.
Dung, a former central bank governor who took office in 2006, is said to have become the country's most powerful prime minister ever.
Seen as a moderniser when first appointed, he used his power to aggressively push for rapid economic growth and champion South Korean chaebol-style development, relying on state-owned giants to drive the economy.
But in recent months economic growth has slowed sharply, inflation has picked up again, foreign direct investment has plunged and fears about toxic debt in the fragile banking system have mounted.
The near collapse of scandal-tainted shipping behemoth Vinashin in 2010 put the spotlight on the financial troubles of state-owned giants, while the arrest of a disgraced multi-millionaire banker seen as an ally of Dung, in August, shook investor confidence in the country and triggered a run on deposits.
Growing concerns last week prompted Moody's to downgrade Vietnam's credit rating, citing weaknesses in the banking system and "an elevated risk" of a costly government banking bailout.
Observers say Dung's rivals, notably Communist Party Secretary General Nguyen Phu Trong and President Truong Tan Sang, appear to want Dung to pay for his failures.
"With Vietnam's economy facing such deep-seated economic problems, the risk of an escalating power struggle between the PM and President Truong Tan Sang that could result in the ousting of the PM and his political allies is increasing," said Rajiv Biswas, Asia-Pacific chief economist at the IHS Global Insight consultancy firm.
But Dung, observers note, has weathered past political storms and could do so again.
"Dismissing him is not an easy thing," said the party official.