Business Leaders Meet to Tackle Corruption in Vietnam

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By Shawn Greene

Nov. 11 – During a seminar in preparation for the 12th annual Anti-Corruption Dialogue in Hanoi tomorrow, new statistics reveal that more than 60 percent of enterprises operating in Vietnam gave ‘unofficial money’ to public officials – oftentimes without being asked to do so.

Organized by the British Embassy in cooperation with the Government Inspectorate and the Vietnam Chamber of Commerce and Industry, the dialogue will focus on “Enhancing business engagement in promoting integrity and tackling corruption in Vietnam.” According to Soren Davidsen of the World Bank who spoke at the preparatory seminar on October 31, corruption was the third most serious problem businesses were facing in Vietnam after price hikes and falling revenue.

A survey conducted last year by the World Bank and Vietnam’s Government Inspectorate showed that enterprises operating in Vietnam were partly to blame for the problem. Of those surveyed, 59 percent admitted to having handed gifts or money to state officials.

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More than 70 percent of those who gave unofficial money said they had given bribes despite not being asked to do so. A further 63 percent explained that unofficial money was given in order to create a mechanism through which future business troubles could be resolved more quickly.

According to Davidsen, “this means that local companies have played a role in creating the vicious cycle of corruption.”

Also speaking at the event, British Ambassador to Vietnam Antony Stokes questioned the necessity of bribing officials. According to Ambassador Stokes, discourse during two workshops held in Da Nang and Ho Chi Minh City earlier this year demonstrate that it is indeed “not necessary.” Stokes went on to call for private firms to co-operate with efforts to combat corruption in the country.

In a similar survey released this year by the Anti-Corruption Bureau and Vietnam’s Government Inspectorate, however, 68 percent of private enterprises surveyed said they must offer bribes to get contracts with state-owned enterprises. Of the staff surveyed, 80 percent characterized giving bribes to state-owned enterprises as a very “normal practice.” In the survey, more than 800 individuals from 232 enterprises operating in five different regions of the country were questioned.

Chief Deputy Inspector Tran Duc Luong concluded that this “proves that private firms are both the cause and victims of corruption.”

Among the most corrupt sectors cited in both surveys were the traffic police, economic police, natural resources and land administration offices, customs, taxation, and construction. Luong lamented the present culture of corruption perpetuated by the tendency for businesses to unnecessarily bribe local officials, and explained that corruption is becoming significantly more complicated and difficult to detect in Vietnam. Since the Law on Anticorruption was enacted by Vietnam in 2005, corruption has continued to plague state agencies, state officials, citizens, and firms.

Interestingly, however, firms that explored other options besides corruption were more successful overall than those that chose to pay bribes.

Diplomatic Scandal

Evidently, however, Vietnamese officials are not the only ones in the country prone to accepting bribes.

In a high-profile case last week, four American diplomatic officials in Vietnam admitted to accepting over USD$3 million in bribes for the issuance of visitor visas to the United States. U.S. Foreign Service Officer Michael Sestak, in charge of reviewing visa applications at the U.S. Consulate in Ho Chi Minh City between 2010 and 2012, pleaded guilty to conspiracy to commit bribery and visa fraud.

Charging as much as $70,000 per application, Sestak and five other American and Vietnamese conspirators used their profits to buy nine properties overseas, laundering funds through China into Thailand. The entire scheme is estimated to have generated at least $9.78 million dollars for a number of conspirators including Vietnamese-American millionaire Vo Tang Binh and his relatives.

Seeking Change

Unfortunately, corruption in Vietnam is unlikely to abate in the near future. Transparency International reports that the proportion of Vietnamese respondents willing to get involved in the fight against corruption was categorically lower for every single form of action when compared to the Southeast Asia regional average. Vietnam also rated lowest in respondents’ willingness to report incidents of corruption to authorities.

Optimistically, however, more than 60 percent of Vietnamese believe ordinary people can make a difference in the fight against corruption, and 45 percent believe stronger government punishment of perpetrators of corruption should be the state’s top priority. While tackling corruption in Vietnam will continue to remain a challenge for state and private actors, continued dialogue on the issue preserves hope that Vietnam will someday mitigate the impact of corruption to doing business in the country.

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