This material belongs to: Forbes.
Vietnam’s export-led economy has grown at an enviable 6% or so since 2012 and shows no signs of stopping, if you listen to analysts on the ground. The country’s low costs and abundance of blue-collar labor help that expansion, which in turn is ballooning the middle class. Government incentives add to the enthusiasm of foreign investors, who now push out everything from shoes to smartphones.
But the investors still want a cleaner place to do business, while Vietnam’s own companies may struggle for reception overseas. So this year the Communist country is stepping up a crackdown on corruption among its numerous state-owned enterprises to ensure graft doesn’t spoil the economic miracle, those analysts say.
“I do think the government is properly addressing the concerns of people that the state-owned enterprises are being plundered by a corrupt few,” says Frederick Burke, partner in the international law firm Baker McKenzie in Ho Chi Minh City. He points to a glut of graft cases since September. “The fact they’ve been able to do what they’ve done in the past couple months is I think significant in that they’re serious about reining in some of the more flagrant abuses.”
High-profile cases in 2017
Transparency International, a nonprofit that tracks graft worldwide, ranked Vietnam 113th worst of 176 countries and regions that it surveyed last year for perceptions of corruption. But the country has wielded an Anti-Corruption Law for 12 years. At least four government agencies can attack graft. And Vietnam goes on an anti-corruption swing every few years. This year was one.
This month the former chairman of state-run Vietnam Rubber Group and four other leaders of offshoot companies received prosecution orders for alleged crimes, news media in Hanoi reported. They invested in areas outside their legal boundaries and mobilized capital without permission, news website VietnamNet Bridge says.
The company neither answered a call to its Ho Chi Minh City offices nor replied to an e-mail request for comment.
In September a court in Hanoi gave a death sentence to Nguyen Xuan Son, former director general of Vietnam’s Ocean Bank, for embezzlement. The bank’s former board chairman received a life sentence over embezzlement and “abusing position and power to appropriate property,” among other charges, Voice of Vietnam says. The bank’s publicity office in Hanoi did not answer calls.
Vietnamese intelligence agents went to Germany in July to kidnap businessman Trinh Xuan Thanh, according to this report. Thanh was wanted for financial crimes and Vietnamese officials said he returned home on his own. The German government, however, protested to Vietnam over the apparent kidnapping and said Thanh was seeking asylum there.
Divestment trend
Although 2017 saw a spike in graft cases, Vietnam still has distance to cover. People living in the financial hub Ho Chi Minh City say land-use graft is still common, likewise petty stuff such as police officers accepting bribes at traffic stops.
“Many people are pessimistic about the public service in Vietnam and don’t trust they have a clean government compared to other countries,” says Trung Nguyen, international relations dean at Ho Chi Minh University of Social Sciences and Humanities. “It hampers the economic growth,” he says, adding that would-be entrepreneurs either cancel their ambitions or do business underground.
But anti-corruption work has a partner in busting crime. It’s Vietnam’s nonstop effort to sell off, privatize and more efficiently operate its state-owned enterprises. Why? It’s those companies that are spawning the corruption. Some may fancy they can operate without bringing in profits, Burke says. A no-profit mentality, which invites corruption, obviously makes a company less competitive in a market economy.
A reduction of SOEs to date, including the sale of thousands of firms in the 1990s, had reduced public firms’ assets to 80% of GDP in 2015. By 2020, per a plan by the Ministry of Planning and Investment, the private sector’s contribution to the economy is expected to reach 50%, Vietnam Economic News says.
Vietnam investigates former PetroVietnam head for corruption
This material belongs to: EFE.
Vietnamese authorities have opened an investigation into a former chairman of PetroVietnam, Phung Dinh Thuc, over financial losses suffered by the state-run energy company, the Ministry of Public Security said Wednesday.
The ministry said in a statement that Thuc deliberately violated economic regulations causing serious consequences in connection with the construction of the Thai Binh 2 thermal plant.
