This article talks about China, but it could as well apply to Vietnam:
What about “happy ending” for Vietnam?
Again, based on the rich experience of democratic transitions since the 1970s, there are five ways China could become democratic:
“Happy ending” would be the most preferable mode of democratic transition for China. Typically, a peaceful exit from power managed by the ruling elites of the old regime goes through several stages. It starts with the emergence of a legitimacy crisis, which may be caused by many factors (such as poor economic performance, military defeat, rising popular resistance, unbearable costs of repression, and endemic corruption). Recognition of such a crisis convinces some leaders of the regime that the days of authoritarian rule are numbered and they should start managing a graceful withdrawal from power. If such leaders gain political dominance inside the regime, they start a process of liberalization by freeing the media and loosening control over civil society. Then they negotiate with opposition leaders to set the rules of the post-transition political system. Most critically, such negotiations center on the protection of the ruling elites of the old regime who have committed human rights abuses and the preservation of the privileges of the state institutions that have supported the old regime (such as the military and the secret police). Once such negotiations are concluded, elections are held. In most cases (Taiwan and Spain being the exceptions), parties representing the old regime lose such elections, thus ushering in a new democratic era. At the moment, the transition in Burma is unfolding according to this script.
But for China, the probability of such a happy ending hinges on, among other things, whether the ruling elites start reform before the old regime suffers irreparable loss of legitimacy. The historical record of peaceful transition from post-totalitarian regimes is abysmal mainly because such regimes resist reform until it is too late. Successful cases of “happy ending” transitions, such as those in Taiwan, Mexico, and Brazil, took place because the old regime still maintained sufficient political strength and some degree of support from key social groups. So the sooner the ruling elites start this process, the greater their chances of success. The paradox, however, is that regimes that are strong enough are unwilling to reform and regimes that are weak cannot reform. In the Chinese case, the odds of a soft landing are likely to be determined by what China’s new leadership does in the coming five years because the window of opportunity for a political soft landing will not remain open forever.
“Gorby comes to China” is a variation of the “happy ending” scenario with a nasty twist. In such a scenario, China’s leadership misses the historic opportunity to start the reform now. But in the coming decade, a convergence of unfavorable economic, social, and political trends (such as falling economic growth due to demographic ageing, environmental decay, crony-capitalism, inequality, corruption and rising social unrest) finally forces the regime to face reality. Hardliners are discredited and replaced by reformers who, like Gorbachev, start a Chinese version of glasnost and perestroika. But the regime by that time has lost total credibility and political support from key social groups. Liberalization triggers mass political mobilization and radicalism. Members of the old regime start to defect – either to the opposition or their safe havens in Southern California or Switzerland. Amid political chaos, the regime suffers another internal split, similar to that between Boris Yeltsin and Gorbachev, with the rise of a radical democratizer replacing a moderate reformer. With their enormous popular support, the dominant political opposition, including many defectors from the old regime, refuses to offer concessions to the Communist Party since it is now literally in no position to negotiate. The party’s rule collapses, either as a result of elections that boot its loyalists out of power or spontaneous seizure of power by the opposition.
Should such a scenario occur in China, it would be the most ironic. For the last twenty years, the Communist Party has tried everything to avert a Soviet-style collapse. If the “Gorby scenario” is the one that brings democracy to China, it means the party has obviously learned the wrong lesson from the Soviet collapse.
“Tiananmen redux” is a third possibility. Such a scenario can unfold when the party continues to resist reform even amid signs of political radicalization and polarization in society. The same factors that contribute to the “Gorby scenario” will be at play here, except that the trigger of the collapse is not a belated move toward liberalization by reformers inside the regime, but by an unanticipated mass revolt that mobilizes a wide range of social groups nationwide, as happened during Tiananmen in 1989. The manifestations of such a political revolution will be identical with those seen in the heady days of the pro-democracy Tiananmen protest and the “Jasmine Revolution” in the Middle East. In the Chinese case, “Tiananmen redux” produces a different political outcome mainly because the China military refuses to intervene again to save the party (in most cases of crisis-induced transitions since the 1970s, the military abandoned the autocratic rulers at the most critical moment).
“Financial meltdown” – our fourth scenario – can initiate a democratic transition in China in the same way the East Asian financial crisis in 1997-98 led to the collapse of Suharto in Indonesia. The Chinese bank-based financial system shares many characteristics with the Suharto-era Indonesian banking system: politicization, cronyism, corruption, poor regulation, and weak risk management. It is a well-known fact today that the Chinese financial system has accumulated huge non-performing loans and may be technically insolvent if these loans are recognized. In addition, off-balance sheet activities through the shadow-banking system have mushroomed in recent years, adding more risks to financial stability. As China’s capacity to maintain capital control erodes because of the proliferation of methods to move money in and out of China, the probability of a financial meltdown increases further. To make matters worse, premature capital account liberalization by China could facilitate capital flight in times of a systemic financial crisis. Should China’s financial sector suffer a meltdown, the economy would grind to a halt and social unrest could become uncontrollable. If the security forces fail to restore order and the military refuse to bail out the party, the party could lose power amid chaos. The probability of a collapse induced by a financial meltdown alone is relatively low. But even if the party should survive the immediate aftermath of a financial meltdown, the economic toll exacted on China will most likely damage its economic performance to such an extent as to generate knock-on effects that eventually delegitimize the party’s authority.
“Environmental collapse” is our last regime change scenario. Given the salience of environmental decay in China these days, the probability of a regime change induced by environmental collapse is not trivial. The feed-back loop linking environmental collapse to regime change is complicated but not impossible to conceive. Obviously, the economic costs of environmental collapse will be substantial, in terms of healthcare, lost productivity, water shortage, and physical damages.Growth could stall, undermining the CCP’s legitimacy and control. Environmental collapse in China has already started to alienate the urban middle-class from the regime and triggered growing social protest. Environmental activism can become a political force linking different social groups together in a common cause against a one-party regime seen as insensitive, unresponsive, and incompetent on environmental issues. The severe degradation of the environment in China also means that the probability of a catastrophic environmental disaster – a massive toxic spill, record drought, or extended period of poisonous smog– could trigger a mass protest incident that opens the door for the rapid political mobilization of the opposition.