As Vietnam looks to retool its economy, some foreign investors say the city of Danang, where Thanh is the local Communist Party leader, could be an example for the rest of the country.

"I think it should be the model," said Peter Ryder, chief executive officer of Indochina Capital, which invested about $300 million to develop beachfront properties and a downtown highrise in the city.

Ryder said Thanh, 58, has an "enormous footprint" and deserves a lot of credit for Danang's popularity among investors, partly thanks to its dynamic political culture.

"He's a pioneer," agreed Takafumi Matsumoto, secretary general of The Japan Business Association in Danang.

An index supported by the US Agency for International Development, based on a survey of 7,300 private Vietnamese businesses, placed Danang first among the country's 63 cities and provinces as a place to do business in 2010.

The index is based on various criteria including how long it takes to start a business, the amount of "informal" or corrupt charges paid, the time firms waste on bureaucratic compliance, and the initiative level of local leadership.

In contrast, Vietnam's business hub HCM City ranked 23 in 2010 while the capital Hanoi came in at 43.

In the quarter-century since communist Vietnam began to turn away from a planned economy to embrace the free market, Vietnam has enjoyed economic growth that has been the envy of many other Asian nations.

But excessive bureaucracy remains a top complaint for foreign investors, along with corruption, a shortage of skilled workers and an under-developed infrastructure including roads, electricity and ports.

The ruling Communists have pledged to carry out reforms long sought by foreign businesses, but the wheels of central government grind slowly and other parts of Vietnam are seen as lagging behind Danang in key infrastructure.

The city of about 900,000 people has progressed since 1997 when it broke away from a neighbouring province and Thanh, a native of the city, took on top leadership roles.

In contrast to the staid image of a communist cadre, foreign business sources described Thanh as "a character" and a "benevolent dictator", while one said "he's right off the set of 'The Sopranos'."

"He is known as the King of Danang", a longtime Vietnam-watcher said. "He is also quite megalomaniacal, saying he will transform Danang into a new Singapore. And when you know the two cities, there is quite a long way to go."

Thanh's supporters strongly reject the dictator label and say there is no proof to back up the corruption allegations.

Benoit de Treglode, director of the Research Institute on Contemporary Southeast Asia in Bangkok, said Thanh had benefited from close ties with prime minister Nguyen Tan Dung as well as the military, whose lands have been obtained for development.

Although the centre of Vietnam has lost some political clout in recent years, "as a compensation Danang has become the prime minister's top priority for investments," de Treglode said.

The city aims to reinforce its position as the hub of central Vietnam, focusing on high-tech industry while taking advantage of its natural beauty to boost tourism and services.

Vietnam has relied on natural resources and unskilled labour to achieve rapid growth but the country's leaders now want a more advanced system of production based on technology and "high-quality human resources".

Le Dang Doanh, a former government adviser, said Danang has already succeeded in becoming Vietnam's third economic pole and is "very much" competing with Hanoi and HCM City.

But the city still needs to show it can attract enough investors to fill its industrial parks and infrastructure, said a source who has done development work in the area and asked not to be named.

"If Danang is going to be the success story that everybody hopes it's going to be, then that's got to start happening," he said.

By Ian Timberlake - Agence France Presse - April 19, 2011