To Lam's Ascendancy: A New Era for Vietnam's Leadership and Economy
To Lam has been elected President of Vietnam and simultaneously re-appointed as General Secretary of the Communist Party. This dual leadership role centralizes significant power, a notable departure from the nation's traditional shared leadership model. This consolidation comes as Vietnam unveils an ambitious reform agenda, aiming for high-income status by 2045 through robust economic growth and an elevated role for the private sector. The shift in leadership and policy seeks to transform the country's economy, navigating domestic political challenges, global economic headwinds, and human rights concerns.
To Lam's dual role marks the strongest concentration of power in one individual in Vietnam since 1991.
Leadership Appointments and Power Consolidation
To Lam was re-appointed as Vietnam's Communist Party General Secretary for a five-year term during a party congress that concluded on Friday. Subsequently, he was unanimously elected as the President of Vietnam, also for a five-year term.
This dual role, combining leadership of both the party and the state, marks a significant concentration of power. Observers note this structure resembles leadership models in China and Laos. According to Professor Edmund Malesky of Duke University, it represents the strongest concentration of power in one individual in Vietnam since 1991.
This concentration of authority is suggested to enable faster decision-making and policy coherence. Upon his swearing-in, To Lam stated his primary objectives: maintaining peace and stability, considered crucial for sustainable growth, and improving people's livelihoods to ensure widespread benefits from development.
Background and Policy Direction
To Lam's career trajectory includes extensive experience in law enforcement, progressing through Vietnam's security services. Prior to his current roles, he served as head of the Ministry of Public Security, where he oversaw a broad anti-corruption campaign. This campaign resulted in the removal of numerous senior officials, including two former presidents and a parliamentary head.
As Party General Secretary, To Lam has spearheaded significant bureaucratic reforms, which include job cuts, the merger of ministries, and the redrawing of provincial boundaries. His policy focus signals a shift from a previous emphasis on party discipline towards economic performance and private-sector growth, aiming to evolve Vietnam's economy beyond a model reliant on cheap labor and exports. To Lam has been described as a "pragmatic reformer," evidenced by his acceptance of a U.S. offer to join the Board of Peace and his emphasis on Vietnam's readiness to contribute as "mediators and bridges to build peace."
Ambitious Economic Reforms and Targets
To Lam has outlined what have been described as the most ambitious plans for Vietnam in 40 years, focusing on comprehensive reform and economic growth. Key initiatives include:
- Administrative Overhaul: A reduction in bureaucracy, involving the decrease of provinces from 63 to 34 and the layoff of approximately 100,000 government employees.
- Private Sector Emphasis: A resolution, passed in May of the previous year, designated the private sector as "the most important driving force of the national economy," elevating its status to parity with state-run companies. This policy shift could grant major private conglomerates a larger role in sectors traditionally dominated by the state, such as infrastructure, energy, and industrial projects.
- "Leading Cranes" Strategy: A core component supporting national champion private companies to compete globally. The goal is to have 20 globally competitive private companies by 2030, drawing parallels to South Korea's chaebol model. A more recent resolution also designated State-Owned Enterprises (SOEs) as potential "leading cranes," targeting 50 Vietnamese companies, including SOEs, on the regional Fortune 500 list by 2030.
- Environmental Protection: The updated policy platform designates environmental protection as a central task alongside economic and social development.
- International Integration: Foreign affairs and international integration have been elevated alongside national defense and security as key policy priorities.
Vietnam has set ambitious economic targets, aiming for double-digit annual economic growth, specifically 10% or higher, for the next five years (2026-2030). The objective is to double the number of private businesses by 2030 and achieve an upper-income, knowledge- and technology-based economy by 2045, marking the centenary of Vietnam's independence and aiming to avoid the "middle-income trap."
"We must achieve double-digit growth to reach the set goals," To Lam stated.
Challenges and Considerations
Despite significant economic progress and ambitious goals, Vietnam faces several challenges:
- Economic Performance: While the economy grew at an annualized rate of 7.8% in the first quarter of the year (up from 7.1% last year), this was below the 9.1% target and slower than late 2025 projections. The country did not meet its previous growth target of 6.5% to 7% for the first half of the decade. The 10% growth target for the next five years is considered challenging due to limited new growth engines and continued reliance on exports, foreign investment, and infrastructure spending in the current global economic climate.
- Global Factors: The global economy, influenced by energy issues, presents an immediate hurdle. Vietnam's economy also relies on foreign investment, technology, and export markets, often operating at the lower end of the value chain, which can lead to environmental pollution risks.
- Domestic Political Dynamics: Challenges include securing support for reforms and potential risks if institutional reforms do not keep pace with the concentration of power, which could weaken intra-party checks and complicate future successions. Tensions exist with the party's conservative faction, notably the military, which has expressed reservations about the reform agenda and seeks to maintain socialist discipline. To Lam's expansion of the state security apparatus, granting broader police authority over legislation and businesses, has intensified a rivalry with the military, which holds extensive commercial interests.
- State-Owned Enterprises (SOEs): As of 2024, 671 SOEs account for 29% of Vietnam's GDP. These entities often receive preferential access to licenses, funding, and resources, which can create competition challenges for private companies.
- International Relations: Vietnam navigates pressure from the United States regarding its trade surplus while balancing relations with China, its largest trading partner and a rival claimant in the South China Sea. Maintaining this careful balancing strategy is expected to become more difficult in a turbulent international environment.
- Human Rights: The anticipated concentration of power has raised human rights concerns, given reports of intensified crackdowns on activists, journalists, and environmental advocates in the nation.
- Other Structural Challenges: These include an aging population, climate risks, and institutional weaknesses.
Notable Private Sector Companies
Examples of "leading cranes" cited in the context of the new economic strategy include:
- FPT: A technology company with over $1 billion in annual revenue and 80,000 employees globally. It secures contracts with international clients for software management and upgrades and has established its own university to ensure a supply of skilled graduates.
- Vingroup: Vietnam's largest private company, operating across diverse sectors including real estate, healthcare, education, resorts, and solar farms. Its subsidiary, Vinfast, produces electric cars and two-wheelers. While Vinfast has faced challenges in breaking into US and European markets, it maintains a strong domestic presence, supported by government policies such as bans on combustion-engined motorbikes in major cities.