Vietnam PM set for second term

July 25, 2011 (AFP) -- Vietnam's one-party parliament is to elect Nguyen Tan Dung for another term as prime minister on Tuesday, confirming him as the country's most powerful politician at a time of economic crisis.

A symbolic vote by the communist-controlled National Assembly will choose Dung for a second five-year stint after his nomination on Monday as the sole candidate.

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Dung is in a strong position after he was re-elected to the 14-member Politburo with support from security and defence delegates who helped him fend off a leadership challenge, an Asian diplomat said on condition of anonymity.

That strength, while portending harder times for dissidents, could help him push through "the right medicine" for the economy, the diplomat said.

The Assembly on Monday elected Dung's rival, Truong Tan Sang, to the largely symbolic post of president.
The relationship between Dung and Sang is now expected to be cordial as the prime minister focuses on trying to stabilise the troubled economy.

Long focused on growth, the government this year shifted towards the recovery of an economy facing a complicated mix of challenges including a struggling currency, trade deficit and soaring prices.

Vietnam's inflation is among the highest in the world, an estimated 22 percent for July compared with the same month last year. Even official media have said the number of strikes is rising fast as workers struggle to cope.
"People's tolerance with inflation is getting less and less. Pressure on the new cabinet on this front is naturally overwhelming," said Vuong Quan Hoang, of DHVP Research and Consultancy.

He said the economy was in a crisis -- "a major one".

Small businesses have been hit by a credit squeeze that seeks to tame accelerating prices but has ramped up the cost of borrowing.

"I think the economy is going to stall," said the Asian diplomat. He remained hopeful over the longer term but said: "At this point in time it is rather pessimistic."

The government on Sunday said the economy is stabilising, with key indicators on the rise. After his re-election Dung will submit a list of his cabinet nominees, most of whom are new, for symbolic approval by the National Assembly.

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