According to some sociologists, corruption is a way of life in Asian societies. At the same time, the UNDP points out that corruption hinders economic development by reducing domestic investment, discouraging foreign direct investment, encouraging overspending in government and distorting the composition of government spending (away from education, health and infrastructure maintenance toward less efficient but more manipulable policies.
Moreover, the World Bank also confirms that corruption harms the poor and vulnerable the most, increasing their costs and reducing their access to basic services such as health, education, social programs and even justice. It exacerbates inequality and reduces private sector investment to the detriment of markets, job opportunities and economies. Corruption can also undermine a country’s response to emergencies, leading to unnecessary suffering and, at worst, death. Over time, corruption can undermine the trust and confidence that citizens have for their leaders and institutions, creating social friction and in some contexts increasing the risk of fragility, conflict and violence.
Hence, Vietnam is one of many case studies of how a government tries to crack down on corruption that hinders economic development and discourages foreign investments. In fact, it’s similar to many other developing countries in Southeast Asia, including Thailand as it plays out in the form of facilitation payments, kickback schemes and bribes used to circumvent or speed up bureaucratic processes – as well as to influence officials’ decisions to gain benefits or favours.
Now, though, Vietnam’s current government and Communist Party (CPV) seem aware of the corruption that has long existed in its bureaucracy and has been hindered development and slowed down foreign investment during the past two decades. So, the current government, under the guidelines introduced by the Communist Party of Vietnam, has become more motivated to create an image of a clean government and started an anti-corruption crackdown to attract more foreign investment as it competes with other ASEAN countries.
In April, for example, the country’s biggest ever financial fraud case saw local businesswoman Truong My Lan sentenced to death for her role in committing fraud amounting to USD12.5bn. The last several months have seen multiple government ministers arrested as part of the clampdown and its resulting investigations.
Alongside this anti-corruption drive, there has been further upheaval in the government, with Vo Van Thuong resigning as Vietnam’s president in March and Vuong Dinh Hue, the head of the country’s parliament, stepping down in April. In each case, the Communist Party said that unspecified ‘violations and shortcomings’ were the reason for the resignations. That this is happening to high-profile personnel ‘indicates to lower-level officials that they have to be very careful.’ (DW.com).
Hence, according to a report by International Bar Association (IBA), as many countries struggled to balance managing the Covid-19 healthcare crisis and preserving their economies, Vietnam was a leader in this trend. Its economy still rose by 8% in 2022, exceeding average rates of 7.1% between 2016 and 2019.
Also, in 2023, forecasts expected Vietnam’s GDP growth to slow to a ‘moderate’ 6.3%, which was still remarkable considering the current global macroeconomic outlook at that time. From a foreign investment perspective, Vietnam saw approximately USD 27.72 billion in investments across sectors in 2022, with around USD 12.45 billion invested in 2,036 new projects. Investment numbers fell in Q1 2023 with USD 4.3 billion invested in the country – a 2.2% drop from the same period for the previous year. Some attribute this drop in investment to ‘lower global demand’, but there have also been whispers about ‘uncertainty’ regarding Vietnam’s domestic situation.
The IBA report also stated that the crackdown has led to the resignations or removals of senior government leaders, including former President Nguyễn Xuân Phúc and two out of four deputy prime ministers. These senior government leaders were embroiled in Covid-19 related graft cases, including a highly publicized scandal involving Covid-19 test kits. In recent years, multiple senior-ranking members of the government, CPV and security apparatus have been arrested, investigated and prosecuted on a variety of charges, including bribery, abuse of power and fraud.
In addition, Based on Transparency International’s CPI 2022 results, which rank perceptions of public-sector corruption, Vietnam improved by nine points from its score of 33 in 2018 to a score of 42 in 2022, ranking 77th out of 180 countries surveyed. The latest Economist Intelligence Unit’s business environment rankings, which measures the attractiveness of doing business in 82 countries across 91 crucial indicators, showed Vietnam jumped 12 places in a single year, the biggest improver worldwide.
However, John Frangos, a partner at Southeast Asian law firm Tilleke & Gibbins, says that Southeast Asia isn’t like Europe, where countries might influence each other’s legal approaches. Instead, it’s more siloed by nature, and neighbouring countries won’t necessarily follow the ‘blazing furnace’ crackdown in Vietnam. Also, Hanim Hamzah, a member of the IBA Law Firm Management Committee Advisory Board and KPMG Law’s Asia Pacific Regional Leader for Legal Services, expressed her belief that the eradication of corruption in Vietnam itself remains ‘another generation and a half away’ because poverty persists alongside limited access to infrastructure and services in the country. These can be driving factors behind corruption. When people lack the essentials, they need to survive; ‘one would argue it would compromise certain values,’ she says.
However, Nguyen Thi Kieu Vien, Executive Director of Towards Transparency, said, “Vietnamese citizens believe they can make a difference in the fight against corruption. Therefore, the Party and the State at all levels should create more space and provide more tools for people to participate in the fight against corruption. It is also crucial to ensure that citizens will not suffer negative consequences when fighting corruption!”
In case of Thailand, Transparency International Corruption, the leading global indicator of public sector corruption scoring 180 countries around the world, reports the Corruption Perceptions Index report every year. In 2023, Thailand had a score of 35 out of 100, placing it 108th out of 180 countries., with Denmark ranked first with a score of 90, Finland second with 87, New Zealand third scoring 8, Norway fourth with 84 and Singapore fifth scoring 83. Hence, some researchers, including TDRI, suggest that the Thai public sectors need to initiate clear, effective and concrete policy to cope with the spread of corruption in their organisations to catch up with Vietnam.
