HERE we go again. In an attempt to staunch its haemorrhaging economy, Vietnam has imposed price controls on key commodities from milk to petrol to steel.

The move, made in the face of soaring double-digit inflation, was roundly condemned by Vietnam’s trading partners because it violates Hanoi’s commitments to the World Trade Organisation.

In short, it was an illegal act by the floundering gargoyles in the ruling Vietnam Communist Party who have no idea how to rescue and restructure their economy.

International experts have told them bluntly that the price controls, like earlier moves to devalue the currency and impose foreign exchange curbs, will not work. They are mere fingers in the dam.

The problem is systemic. Vietnam’s top-down command economy, controlled and micromanaged by apparachiks with a 19th-century mindset, is simply unsustainable.

God knows, there are enough examples to prove that from Albania to Cuba to the Soviet Union. Now we have Vietnam, where the warnings of impending catastrophe grow ever louder.

Last week, Stewart Newnham, an Asian currency strategist at Morgan Stanley, told a conference in Ho Chi Minh City that due to the weak economy and deteriorating balance of payments deficit Vietnam’s dong was in “extreme trouble”.

Its previous devaluation in August occurred amid fears that increased imports might cause Vietnam to fall short of capital to fund the burgeoning trade deficit, now running at US$10.66 billion.

Newnham’s warning came two days after the International Monetary Fund cautioned that Vietnam’s reserves were at dangerously “low” levels and covered less than two months of imports.

Tomorrow, the European Chamber of Commerce in Hanoi will discuss “The Future of the Vietnam Dong” and members will mull whether the currency will be devalued for a third time this year and how long the foreign reserves might last.

Make no mistake, it is serious. Not only for Vietnam, but for neighbours like Cambodia and other members of the Association of Southeast Asian Nations.

If Vietnam’s economy crashes, the waves will wash over the region and threaten ASEAN, just as the banking crises in Greece and Ireland financially rocked the European Union.

And despite the largesse of the Asian Development Bank, which will announce tomorrow a multi-billion rescue package for Vietnam, a more radical and lasting solution is needed.

Thankfully several brave voices in Vietnam itself have already identified the essential and inter-related steps that need to be taken.

The first is that the hierarchy of the ruling communist regime must be revamped.

By great good fortune that will happen next month at the party’s five-yearly congress when all senior members will face re-election.

Of the VCP’s topmost troika, it is already known that the doddery party boss Nong Duc Manh and the nice but ineffective President Nguyen Minh Triet will step down.

What now seems likely, and it is real bombshell in the context of Vietnamese politics, is that Prime Minister Nguyen Tan Dung will be forced out.

Recently humiliated in the National Assembly where he faced a no-confidence motion, Dung had to apologise for the way Vinashin, the state-owned shipbuilding group, ran up debts of US$4.4 billion when helmed by one of his lackeys.

Dung’s probable replacement will be Deputy Prime Minister Nguyen Sinh Hung, hardly a pocket dynamo but at least someone who understands economics. He will need that understanding in spades, because Vietnam’s other urgent need is for a second doi moi, or economic reformation.

It will have to be just as revolutionary as the first doi moi in 1986, which partially opened the country to free-market practices.  “A second doi moi!” is the new clarion call now heard all over Vietnam these days.

Unless that call is heeded soon, Vietnam’s leaders risk facing the same fate as their counterparts did in Romania, Poland and East Germany not so long ago.