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SCMP Reporter

Lieutenant-General Le Kha Phieu - the man of the moment in Vietnamese politics - is emerging from the economic shadows.

 A life-long military commissar, General Phieu is widely expected to replace Communist Party general secretary Do Muoi as Vietnam's top leader later this year.

 Every day his public exposure seems to be broadened and deepened after years of secrecy.

 With the new openness comes the first indications of his views towards the rest of the world - and the mounting challenges ahead for Vietnam's emerging economy.

 No one is pretending Mr Phieu is an economic specialist. But his views cannot be under-estimated.

 Other than once saying capitalism was 'obsolete', virtually nothing was known of his economic ideals until now.

 As the party machine appears to be pushing him forward, pressure from foreign economists is intensifying for more rapid reforms to sustain Vietnam's recent high growth.

 They want swifter trade liberalisation, new efforts to attract lagging foreign investment and tough action to tackle the myriad of problems facing the state sector.

 As the growth of neighbouring tigers slumps, the voices of conservatives such as Mr Phieu within Vietnam's leadership are expected to become louder - their long-held suspicions of fast change confirmed.

 Whatever happens, Mr Phieu's ideas are likely to prove crucial to the pace of any future reforms across all sectors and any further widening of the country's doors.

 If he snares the post, it is unlikely he will want to open the doors any wider or relax controls.

 As general secretary, he would be the first military cadre to hold the top job and the first among equals in Vietnam's usually collective leadership that pits reformers against conservatives, giving him an automatic power-base of considerable internal influence.

  Recent days have seen him lecture officials from the local Chamber of Commerce and expound his economic ideas on the pages of the semi-official Vietnam Economic Times in a rare interview.

 A feared party disciplinarian, his most recent views appear more moderate than other addresses over the past 18 months, geared more towards internal consumption.

 He has also made it clear he would not tolerate any weakening of the party's extensive cell structure - an organisation that includes infiltration of foreign enterprises.

 However, in the Vietnam Economic Times article - unsubtly headed 'View from the Top' - he pointed to 'differences' between socialism and capitalism, but stressed 'these can be resolved in a world of peaceful co-existence'.

 It is the rhetoric of the 'socialist-oriented market economy' that sees foreign involvement as an 'opportunity and a challenge'.

 'We will try our best to develop our own talents, our natural and human resources, so as to strengthen our position and capabilities,' he said.

  'Only by doing so will co-operation with foreign partners be effective and successful, and only then will the growth in foreign investment be maintained without sacrificing national independence and socialist orientation . . . the door will never be shut.'  He revealed he was examining the need for co-operative management among peasants to boost farm-gate incomes, while hinting at the need for more strict control of the country's troubled nascent banking industry.

 He also put his paw on the plate of reform of Vietnam's vast state sector. Moves to hive-off about 6,000 lumbering state firms at the core of the economy have been far slower than expected and the party continues to see privatisation as a dirty word.

 Mr Phieu said the party, including Minister for Planning and Investment Tran Xuan Gia, was committed to diversifying the economy, but the leading role would have to be played by the state sector.

 He wanted leaner, better controlled and more efficient state industry through carefully worked mergers, bankruptcies and better training and use of technology.

 He spoke of 'equitisation' rather than privatisation, but added it was not the only solution. He said the process would pull in capital while 'ensuring that workers, as well as managers, become the direct masters'.

 'If the nation is strong enough to maintain its principles, then the stronger partners will not be able to bully the weaker ones, and the richer side will not be able to bully the poorer,' he said.

 Initial test sell-offs had sparked increases in revenue and productivity, while boosting the pockets of the workers and the state coffers, he said.

 The party was keen to continue sell-offs, he said.

 Foreign economists in Hanoi are now eagerly digesting his words, and are taking some comfort from the fact Mr Phieu appears to have a sound overview of the issues at stake.

 'It seems he knows what needs to be done, but it will be a question of the pace . . . between the lines we can see considerable caution,' one party analyst said.

 'Le Kha Phieu seems to come from the classic Vietnamese mould of the silent cadre. These people value stability above all else. They know extremely high levels of patience.

 'If something needs 20 years, then 20 years it is,' he said.



Military man uses economic authority