The history of nations rarely moves in straight lines. Eras of genuine policy and structural reform are rare. But when they do occur, they are often followed by long periods of rapid economic growth. This was Australia’s experience after the reforms of the late 1980s and early 1990s. But eventually all reforms, by their nature, become outdated and inefficiencies creep back into the system. Economic stagnation can follow. In some countries another cycle of reform is eventually initiated. In others, the stagnation just continues indefinitely.

Australian Ambassador to Vietnam Andrew Goledzinowski.

In Vietnam also, the late 1980s were a period of bold change - change that established the conditions for decades of success. An elderly Vietnamese engineer explained Doi Moi to me like this: he said it was like a giant mechanical spring that propelled the Vietnamese economy and society forward over many years. But “that spring has used up all its energy and a new spring is needed to push the country forward again”, he said.

During my time in Vietnam, I’ve come to understand the importance of balance and harmony in the Vietnamese society. This means a balance between the forces of Yin, representing innovation and creativity, and Yang which represents stability and continuity. I’ve learned that Yang is the dominant tendency in Vietnamese history, but that it is interspersed with periods of Yin, when important changes take place.

Today it feels to me (as a foreign observer) that we are on the cusp of a new Yin era. I sense a broad consensus, out there in the population at large, that a new period of renovation is necessary. But there is also some skepticism about whether it will be possible. So, my purpose in writing this article is to provide a sympathetic, but honest, perspective on current trends.

Change, especially when revolutionary in nature, is often unsettling and even the most necessary changes inevitably create winners and losers. In the Australian context, major policy changes are often accompanied by vigorous public debate. We value that. But sometimes much-needed reforms fail due to partisan differences or political disagreements. Vietnam’s system relies more on consensus. I don’t think any system is perfectly suited to navigating change and every system has examples of successes and failures. But strong leadership and perseverance are always crucial ingredients.  

General Secretary of the Communist Party of Vietnam To Lam delivers a speech at the National Conference held on December 1. Photo: Dang Khoa

On Sunday December 1, General Secretary To Lam delivered a speech to a special conference of the Politburo and the Party Secretariat. There was much to appreciate in the speech, and it deserves careful analysis. Several things struck me immediately.

First, there was an absence of ideological language – the speech was about actions rather than ideas.

Second, instead of the usual calls for increased foreign investment, infrastructure and energy transition, the focus was on creating the necessary conditions to make all these things happen.

Finally, the language was very direct. The General Secretary held up a mirror, in which everyone could see themselves reflected. It was a very powerful statement indeed.

His focus was on the machinery of government and ways to improve its operation. The Vietnam Australia Centre (VAC) within the Ho Chi Minh Academy of Politics has facilitated numerous studies and exchanges on civil service reform. To be effective, change must be not just structural but also cultural, and at all levels. The best civil service models reward initiative while emphasising accountability, responsibility, and transparency.

But, for me, the most striking section of the speech was the commitment to double digit economic growth – which is both essential and achievable, but which will require a new way of doing business.  Previous governments appeared to be happy to drive the Vietnamese economy forward at a steady 6-7% growth, while keeping both hands firmly on the steering wheel. To achieve faster growth – the sort of rates that China enjoyed when it was at the per capita GDP level that Vietnam is at now – the administration will need to release the steering wheel and give economic direction from the back seat.  There are examples in east Asia showing it can be done.

Vietnam’s New Era is dawning at a critical time.  Global conditions are becoming more challenging. On the economic front, so-called China+1 strategies may help Vietnam. But a half century of steady globalisation may be over. We are in a period of derisking and decoupling, shorter supply chains and possibly higher tariffs. This is not ideal for trading nations like Vietnam and Australia. But Vietnam has some significant advantages. There is enormous interest in Vietnam at a time when global capital is looking for safe havens. But money is like water. It prefers to flow downhill. It does not wait. And, when it is blocked, it goes elsewhere.

There is a wall of money available to Vietnam, particularly from institutional investors, if the legal and regulatory settings are correct. For Australian investors this means faster approvals, clearer tax laws, regulatory certainty, and the ability to divest if and when the time comes.

The current geostrategic environment is also difficult. The full consequences of the Russia–Ukraine conflict, including for our own region, are still unfolding. Conflicts, tensions, and realignments are cascading around the globe. Many of these are interlinked. Fortunately, Vietnam’s Ministry of Foreign Affairs and its diplomats are a great national asset, and its diplomacy is globally admired. In the face of rising geopolitical competition, I expect that Vietnam will continue to maintain its careful neutrality. I also expect Vietnam’s engagement with the world to increase, but on its own terms and according to its own interests.

Vietnam and Australia are unlikely partners, different in many ways. But 50 years of cooperation have created a relationship of trust and mutual respect. We were once among Vietnam’s top three investors, delivering the first submarine cable, the first satellite links, the first north-south 500 KV powerlines and the first bridges over the Mekong. As Vietnam climbs the value curve and modernises its economy, the opportunities for collaboration with Australia will again grow. Right now, I have Australian companies ready to invest in Vietnam’s offshore wind capacity, in the processing of rare earths and critical minerals such as tungsten, in digital transformation and agritech, and in higher education. I am hoping our projects will proceed in all these sectors.

My purpose in writing this article is to clearly state Australia’s strong support for the direction that Vietnam is taking. You are an important country for us - and not just as a trading partner. History, geography, and common sense tell us that a peaceful, prosperous, and sovereign Vietnam is essential for the stability and prosperity of our region. And while the challenges facing Vietnam may be significant, they are nothing compared to the challenges Vietnam has previously faced and overcome. 

In the past I have jokingly compared Vietnam to a Vinfast VF8 - with the handbrake left on. The handbrake is about to be released and the whole world will marvel at Vietnam’s rapid acceleration into a new and exciting future.

Sadly, my time in Vietnam is ending. But I will be leaving behind a part of myself, with the wonderful Vietnamese people. I look forward to staying connected with Vietnam and with all the many friends I have made here.

H.E. Andrew Goledzinowski, Australian Ambassador to Vietnam.