Citing Singapore, South Korea and Taiwan as examples, the former air force general said a strong one-party government that provided "stability and discipline" was essential for Vietnam to escape the clutches of poverty.
"The priority is to build the economy, to have a middle class in the country and then later on think about political reform," he told reporters after a round of golf and lunch with the head of Ho Chi Minh City's local government.
Asked whether he opposed the ruling Communist Party and wanted to see political reform in Vietnam, the dapper looking Ky launched a virulent attack on pro-democracy activists in the United States, his adopted country.
"I think it is very wrong that some, especially some Vietnamese overseas in America, today are asking, demanding that Vietnam has to adopt some sort of democracy like they have in America.
"My personal opinion is that it is wrong. It does not fit Vietnam in the present situation," the 73-year-old said, in comments that will be music to the Vietnamese government's ears.
Ky, who was given permission last month by Hanoi to celebrate next week's Lunar New Year festival of Tet in Vietnam, said he wanted to help heal the scars of war that have divided the Vietnamese community for so long.
"I have returned because I miss the country but secondly because I want to contribute to the country," he said. "My presence here proves that I want to be a messenger for national reconciliation."
Around 2.7 million Vietnamese live abroad. Known as Viet Kieu, many left for the West following the end of French colonial rule in 1954 and at the end of the Vietnam War in 1975.
Ky dismissed the deep divisions his trip has caused among the 1.4 million Vietnamese living in the United States, many of whom see his return as a sign of acquiescence to the communist regime.
"The people who want to return to the past and talk about the so-called utopia are a very small minority, and mostly they will die soon," said Ky, who served as prime minister of the US-backed South Vietnam after the 1965 military coup and then as vice president from 1967 to 1971.
"When my soul yearns for my home country I will take my own path regardless. The protests neither harm nor benefit myself or my country."
Ky, one of the most senior officials from the US-backed South Vietnamese regime to return to home, arrived Wednesday in Saigon with his wife, daughter and several friends.
Until Wednesday, his last glimpse of the city -- now known as Ho Chi Minh City -- was from an American helicopter on April 29, 1975, the day before it fell to North Vietnamese forces.
"Yesterday when my plane was about to land in Saigon I burst into tears for only second time in my life. The first time I cried was when I left my country in 1975 and today I cried again because I found myself back in my home country."
The Vietnamese government had previously rejected his requests to return, but in July last year Ky said Vietnam's ambassador to France, Nguyen Dinh Bin, approached him and proposed the trip.
Ky, who is due to fly to Hanoi after Tet and visit Son Tay town, his birthplace northwest of the capital, also hinted that he was considering a permanent return to Vietnam to live out his remaining years.