The current political crisis may well be resolved with the swift election of a new president, but risks remain that repeated reshuffles of top leaders hurt business sentiment in a country that is highly dependent on foreign investment.
The Ho Chi Minh City stock exchange, the country’s main bourse, shed on Monday nearly 3 per cent in the first hours of trading after news began circulating about the imminent resignation of the president.
Foreign investors’ net sales in the first two days of the week amounted to about US$80 million, according to Mirae Asset Securities, a broker.
Thuong’s “removal could see policy and administrative decisions slow further as officials are more anxious about the arc of the anti-corruption campaign”, said a Vietnam-based advisor to foreign corporates, noting however that Vietnam’s position on key policies would not change.Â
Investors who mostly praise political stability may not take well the premature departure of two presidents in about a year.
Recent developments raise questions about “predictability, reliability and internal workings of the system” on which investment decisions hinge, said Florian Feyerabend, the representative in Vietnam for Germany’s Konrad Adenauer Foundation, a think tank.
He noted however that “the overall political system of governance remains stable”, and Vietnam’s foreign policy aimed at maintaining good relations with both the United States and China would not change.Â
Source: CNA
