In Vietnam, a delicate dance with and against bribery

Surveys continually reflect how deeply bribery has come to color Vietnamese life.

The first time around, the Ho Chi Minh City businessman spent days waiting for a government office in Hanoi to stamp his official paperwork. So the next time he slipped $200 into his next application and received a call within hours. 

"Your papers are ready," he was told. 

"I wasn’t expecting it to be that easy,” the businessman said, speaking on condition of anonymity because bribing an official is technically a crime in Vietnam, where the practice remains rampant. 

“That's how business goes here."

In Vietnam, the practice of passing money under the table is so common many don't consider it bribery, but an inevitable part of getting things done. For years studies have confirmed what everyone in the country knows: Bribery is bad and getting worse.

Last week, the Governance and Public Administration Performance Index, which interviewed around 14,000 residents in all 63 Vietnamese provinces and cities, highlighted “noticeable spikes” in reports of extra money paid for everything from civil service positions to good grades. For example, around 54 percent of respondents claimed bribes were required to get government jobs, up from 51 percent in 2015 and 46 percent in 2011.

In March, the Vietnam Provincial Competitiveness Index pointed out that in 2016, around 66 percent of Vietnamese businesses said they had to offer bribes or make informal payments to public officials, higher than from 2008 to 2013. The index, an annual business survey that seeks to gauge the economic governance quality of provincial authorities across Vietnam, also quoted many firms as saying: “It is common for businesses to experience informal charges related [to] harassment during administrative procedures.”

The same month Berlin-based Transparency International identified India and Vietnam as suffering the highest bribery rates (69 percent and 67 percent respectively) in the region. The respondents said they had to pay bribes to access basic services like public education and healthcare.

Those findings came as no surprise for insiders.

"Many, if not all, businesses consider paying bribes a routine part of their daily lives," said Hoang Nhu Lam, who runs a ceramics business in a southern province.

“Only when stricter laws are imposed to punish the officials who take bribes and only when they get decent salaries will there be any hope of ending the practice,” Lam said. "Otherwise, we can expect to stop paying bribes if and when our officials are replaced with robots."

'Payoffs are higher'

In what was apparently an unprecedented move, in 2005 Le Kha Phieu, Vietnam’s Communist Party chief between 1997 and 2001, told Tuoi Tre (Youth) newspaper in a headline-grabbing interview: “I can say frankly that there were people who came to see me with money — 5,000 or 10,000 dollars — no small amount."

Also in 2005, when the first Provincial Competitiveness Index was launched, the Communist Party commissioned an unprecedented survey that confirmed nearly a third of government employees in Vietnam admitted they would take a bribe if one were offered.

Many analysts blamed the problem on Vietnam’s failure to complete market reforms that began in the late 1980s. They say there is still too much state control over the economy, which allows connected insiders to profit.

According to the analysts, individuals who have access to centrally planned or government-controlled assets like land or capital are getting very rich. Meanwhile, individual entrepreneurs who have to compete without subsidized land, capital, fast-tracked approval, or tax breaks are having a much harder time.

That has fueled an entrenched bribe-for-approval system that has permeated the system.

 “Since the rewards from obtaining permission for such thing as land use, company registration, foreign direct investment are higher, more are willing to pay bribes to obtain such permission,” said Dennis McCornac, a professor of economics at Loyola University in Baltimore (Maryland).

While Vietnam is still grappling to fix the broken system, its growing economy tends to foster more corruption, not less, analysts say.

“The problem is getting worse since the payoffs are higher,” McCornac said. “Given Vietnam’s rapid development and the extent of increases in infrastructure or government procurement, the monetary size of contracts is much larger and even if the bribe or payoff is only a small percentage of the contract, the amount can be quite large.”

Intolerable tolerance

But what is more worrisome, according to analysts, is that the status quo has perpetuated widespread public distrust in the government’s determination to its corruption fight.

Over half of Transparency International's Vietnamese respondents reported their government was doing a poor job of fighting corruption. Questions about public faith in provincial leaders drew rock bottom responses in the most recent Governance and Public Administration Performance Index and only 3 percent of respondents said they blew the whistle on corrupt officials.

In an explicit gesture to restore shattered public trust, Vietnam is amending its first anti-corruption law, passed by the national legislature in 2005.

Notably, lawmakers are looking to plug the many loopholes in the country's new asset disclosure process. Even the Vietnamese authorities have repeatedly acknowledged that the law, billed as one of the most powerful tools for tackling corruption, has remained all but toothless. 

But during the latest parliamentary plenary session, the passage of the amended law has been put on the back burner pending further reviews.

The country’s top leaders have repeatedly pledged to launch no-holds-barred crackdown on corruption – to little effects.  But on the other hand they have also publicly acknowledged that malfeasance plagues the very agencies charged with fighting corruption.

In a high-profile case, in 2014 Tran Van Truyen, the chief of the Government Inspectorate (the top government agency tasked with fighting corruption) between 2007 and 2011, was rebuked by the Communist Party for trying to conceal his outsized real estate holdings.

Financial reports showed that Truyen, who made less than $9,000 a year as the Government Inspectorate chief, had hundreds of thousands of dollars in cash in addition to significant holdings of property and stock. According to inspectors, several of Truyen’s houses and apartments were registered under the names of his wife and daughter, who did not reside there but rented them out to others.

Truyen’s successor, Huynh Phong Tranh, was not immune from public eyebrows either. Tranh was found dishing out dozens of unusual appointment decisions shortly before his retirement in April 2016. In 2014, Tranh both infuriated and amused the public as he tried to put a positive spin on Vietnam’s poor ranking in Transparency International’s Corruption Perception Index by saying: “Corruption in Vietnam has reached a level of stability.”

The troubles that besieged the very agency tasked with fighting corruption underscored a major problem Vietnam’s anti-graft drive needs to address, analysts say.

“It is a situation of ‘the fox guarding the henhouse.’ That is, a job assigned to a person who is exploiting it to his own ends,” McCornac said.

Dien Luong

Photo by Reuters/Kham

By Dien Luong