The Impact of New Vietnamese Leadership on Anti-Corruption and Foreign Investment

Following the death of Nguyen Phu Trong in mid-July, To Lam, the former public security minister and current president, has officially become the most powerful figure in Vietnam. Lam was named General Secretary of the Communist Party on August 3, replacing Trong, who had held the position since 2011. A police officer who rose through the ranks of the Ministry of Public Security, Lam became well known as the enforcer of Trong's sweeping anti-corruption campaign, which resulted in the arrest or dismissal of hundreds of politicians, civil servants, and businesspeople. The crackdown also throttled foreign direct investment in Vietnam, as multinational corporations struggled to get approvals and licenses from bureaucrats afraid of being accused of corruption.

With Lam now controlling two of the top four positions in Vietnamese politics - the other two being Prime Minister and Chair of the National Assembly - international businesses are closely watching for any change in the anti-corruption campaign that will impact the investment approval process. Although Lam has vowed that “the work on anti-corruption will be continued fiercely," there are signs of positive change from a foreign business perspective. Vietnamese political experts believe that, in preparation for Communist Party Congress in early 2026, the anti-corruption campaign will slow down to demonstrate political stability, a feature that has long made Vietnam an attractive investment destination. Furthermore, unlike Trong, a conservative Marxist-Leninist who placed primary importance on preserving the Communist Party's authority, Lam is more of a pragmatist who will seek to legitimize the party's rule through continued economic growth, according to Zachary Abuza of the US National War College. Finally, a variety of sources in Hanoi say To Lam is expected to fill both formal and informal advisory roles with technocratic policy experts rather than career party insiders.

Vietnam continues to offer foreign investors numerous advantages, such as favorable tax rates, a strategic location, and lower capital costs. The country is particularly enticing to businesses looking to diversify production centers and supply chains outside of China. But, given the uncharacteristically high degree of leadership turnover in Vietnam over the past few years, it is imperative that foreign investors keep a close eye on how Lam consolidates power in the coming months.