HANOI (AFP) ? Vietnam's one-party parliament waved through 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 instability.
A symbolic vote by the communist-controlled National Assembly brought no surprises as it elected 61-year-old Dung, the sole candidate, for a second five-year stint.
"Dung has been re-elected prime minister with 94 percent of votes," in the 500-member assembly, a parliamentary source said.
Activists fear the return of Dung, Vietnam's seventh premier, will herald a further assault on freedoms in a country where dozens of political critics have been jailed since late 2009, according to Amnesty International.
There was a crackdown in the lead-up to the ruling Communist Party's secretive Congress in January, which determined top leadership positions being confirmed this week.
Dung was re-elected to the 14-member Politburo at the Congress, where support from security and defence delegates helped him fend off a leadership challenge.
His re-election as prime minister may mean a harder time for dissidents, but Dung's strong position could also help him push through "the right medicine" for the economy, an Asian diplomat said, speaking on condition of anonymity.
"The prime minister will... face a tremendous challenge on the economy, which has been destabilised very much in his first term," said economist Le Dang Doanh.
Vietnam's numerous economic imbalances include galloping inflation, a large trade deficit, high current account and budget deficits, inefficient state spending, and increasing foreign debt, Doanh said.
"Many small and medium-sized enterprises are on the brink of collapse."
The European Chamber of Commerce in Vietnam on Monday said business confidence among its members has continued to decline.
Long focused on growth, the government this year shifted towards economic stabilisation, but Doanh said problems persisted.
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 people 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".
But the government says the economy is stabilising, with key indicators on the rise.
Dung's rival Truong Tan Sang, who was elected to the largely symbolic post of president on Monday, said the country faced "huge opportunities and challenges" on its path to development.
Quoted in the state-controlled Dan Tri online newspaper, he said Vietnam would overcome these issues to become "a rich, civilised country".
Activists predict that concerns about economic dissent and Arab Spring-style unrest will prompt the one-party state to further tighten its grip on freedoms.
They foresee a strengthened role for the security ministry after Congress increased the department's representation in the elite Politburo from one member to two.
On the eve of Dung's re-election one of Vietnam's most prominent dissidents, Catholic priest Nguyen Van Ly, was re-arrested, according to official media.
Convicted in 2007, he was serving an eight-year prison term for propaganda against the state but the sentence was suspended in March last year to allow him to seek medical treatment.
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