BANGKOK >> Vietnam’s president resigned in the latest episode of the ruling Communist Party’s “blazing furnace” anti-corruption campaign, and Vice President Vo Thi Anh Xuan was named acting president.

The appointment is Xuan’s second stint as acting president after she stepped in when Vo Van Thuong’s predecessor resigned in early 2023. The turmoil among top leaders is raising questions about Vietnam’s political stability as its fast-growing economy plays an increasingly important role in world supply chains.

Vietnam depends heavily on exports and foreign investment, but its leaders have been tightening the party’s grip on power and cracking down on dissent as well as widespread corruption. Analysts say the turnover in leadership pinned to the anti-graft campaign also stems from rivalries within the ruling party.

VIETNAM’S POLITICAL SHAKEUP

Thuong is the second leader in two years to resign as president, a largely ceremonial role. The most powerful post is held by Communist Party general secretary Nguyen Phu Trong.

Xuan’s appointment as acting president until the National Assembly meets to elect a new president is a rare instance of a woman ascending to a top political post in the Southeast Asian country.

In announcing Thuong’s departure, state media said his violations had “left a bad mark on the reputation of the Communist Party.” His resignation came days after the former chief of Quang Ngai province, in central Vietnam, was arrested on suspicion of corruption. Thuong is a former party chief of the province.

Thuong was a protege of Trong, who has headed the party since 2011 and is 79, and it’s unclear how this change might Vietnam’s future leadership.

WHO IS VIETNAM’S ACTING PRESIDENT?

Xuan, 54, has been vice president since 2021. A former high school teacher, she is Vietnam’s first female president, but she was acting president for six weeks last year after Nguyen Xuan Phuc resigned as president in the midst of a scandal linked to Vietnam’s response to the COVID-19 pandemic.

Reports in Vietnam’s state media say Xuan studied chemistry teaching and holds a master’s degree in public administration. She initially rose in party ranks as a leader of the women’s union in southern Vietnam’s An Giang province.

Official media give little further information about Xuan.

WHAT IS THE LIKELY IMPACT OF THIS RESHUFFLE?

Vietnam’s economy has boomed over the past decade as foreign investment poured in and the country became a preferred alternative to China as relations festered between Beijing and Washington.

The flood of foreign investment, especially in manufacturing of high-tech products like smart phones and computers, raised expectations it would become yet another “Asian tiger” economy. Since nearly half of Vietnam’s manufacturing involves multinational companies, investor confidence is vital.

Analysts say the anti-corruption campaign has paid some dividends in cracking down on illegal fees and other costs for domestic businesses. But it has also brought on a flurry of scandals and raised political uncertainty. Economic growth slipped to 5.1% last year from 8% in 2022, as exports slowed.

Vietnam’s leaders have also drastically narrowed the scope for dissent in the country, jailing clean energy experts as well as environmental activists. Meanwhile, the anti-corruption campaign, described by Trong as a “blazing furnace,” has netted thousands of business people and officials. Real estate tycoon Truong My Lan is facing a possible death penalty for allegedly embezzling $12.5 billion. Lan’s trial began earlier this month in Ho Chi Minh City. It’s Vietnam’s largest financial fraud case on record, amounting to nearly 3% of the country’s 2022 GDP.

WHAT’S NEXT?

Vietnam’s leaders are next due to convene a Communist Party congress in early 2026. Until then, experts say, there may be more turmoil as rivals to take Trong’s place jostle for dominance.

The anti-corruption drive also has made Vietnam’s bureaucracy more cautious, with “public officials becoming anxious about being investigated and shirking their responsibilities,” according to a report from Singapore’s ISEAS-Yusof Ishak Institute. Government spending has slowed for similar reasons, state media have reported.

“Even after the new president is elected, political infighting will likely persist until 2026 unless a clear succession plan for Trong is announced,” Le Hong Hiep, a senior fellow and coordinator of the Vietnam Studies Program at the ISEAS — Yusof Ishak Institute in Singapore said in a report.

“In the meantime, investors and Vietnam’s partners will have to live with the country’s new political realities,” he said.