Vietnam’s Corruption Problem

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Vietnam’s Corruption Problem

The country struggles to fight corruption as the public is kept in the dark about officials’ wealth.

Vietnam’s Corruption Problem
Credit: REUTERS/Stringer

The stony-faced corruption czar of Vietnam might not have expected that his political rhetoric aimed at defending the country’s anti-graft efforts would become the subject of such widespread ridicule and social satire over the past year.

In December 2014, Huynh Phong Tranh, chief of the Government Inspectorate, tried to put a positive spin on Vietnam’s poor ranking in an international standard gauge of government malfeasance by saying, “Corruption in Vietnam has reached a level of stability.” He was referring to the 2014 Transparency International’s Corruption Perceptions Index, which ranked Vietnam 119 out of 175 countries and territories; the country was ranked 116 in 2013 and 123 a year earlier. Its position has barely budged, moving to just 112 in 2015.

It is in this context that Tranh’s stance on Vietnam’s anti-corruption progress has both infuriated and amused a public already disenchanted with government platitudes about the rampant corruption. In a country that boasts around 30 million Facebook users armed with a biting sense of humor, the “stable corruption” concept has become a favorite of satirists and gone viral. It has also made its way to a recent much-anticipated comedy that is aired nationwide annually on the eve of the Lunar New Year, winning rave reviews.

The Gregorian New Year has not bode well for Tranh either. Last January he was ousted from the Central Committee, a powerful grouping of 200 members of the ruling Communist Party. This means that he is unlikely to be able to hold on to his job when the National Assembly, Vietnam’s legislature, rubberstamps the new leadership lineup later this year.

The troubles that besiege the head of the very agency tasked with fighting corruption underscore how Vietnam’s anti-graft drive has stalled. Almost at the same time Tranh coined the “stable corruption” term in December 2014, his embattled predecessor, Tran Van Truyen, was rebuked by the Communist Party for trying to conceal his outsized real estate holdings. Financial reports also showed that Truyen, who headed the Government Inspectorate between 2007 and 2011 and made less than $9,000 a year, had hundreds of thousands of dollars in cash in addition to a significant holdings of property and stock.

But it was only when the media swung into action that Truyen’s illicit wealth came into light. Truyen’s disgrace was emblematic of another entrenched problem: It was not the only time that government auditors had proven less effective than the state media in exposing potential corruption. And that is the heart of what has bedeviled Vietnam’s fanfare anti-corruption campaign for years.

In 2013, a government decree began requiring public officials to submit financial disclosure forms. The decree requires around one million officials from to declare their incomes and assets worth more than the equivalent of $2,400, including cash, gifts, savings, stocks, and vehicles – held both inside and outside the country. But the annual outcomes of these financial disclosures have always stood in stark contrast to Vietnam’s poor international corruption rankings. Of one million public officials who were required to file last year, five were found to have made false declarations. Only one was punished in 2014.

To put things in perspective, the Transparency International’s ranking is not the only yardstick to gauge the pervasiveness of corruption in Vietnam. According to the most recent country report on human rights commissioned by the U.S. State Department, corruption has remained a “major problem” in Vietnam. Last year, the Vietnam Provincial Competitiveness Index reported a significant jump in the prevalence of bribes. Of the nearly 10,000 Vietnamese firms who participated in a 2014 survey, 66 percent said they usually pay extra informal charges to officials to facilitate business activities; during the previous year, 41 percent of the survey’s respondents said they did so. Vietnam does not release any estimate of how much money officials are siphoning off from the public annually.

This is the context in which Vietnam’s financial disclosure laws, billed as one of the most powerful tools for tackling corruption, have turned out to be toothless. Perhaps one of the most glaring pitfalls in the process is that “financial disclosures are not made available for public review,” said Sarah Dix, anti-corruption policy advisor to the United Nations Development Program in Vietnam.

Instead, each official’s finances are submitted for “the approval of the heads of the respective agencies” during an annual review process. The verification process is carried out only when there is a promotion or an appointment of, or a complaint that involves a public official.

That poses another problem. Every year these agencies take in (and must process) roughly a million financial disclosure reports. “Given the number of the people filing disclosures and the nature of the exercise, verifying the declarations is not a simple task that just any person can do,” said Tran Thi Lan Huong, a governance specialist at the World Bank in Vietnam.

Elsewhere in Asia, Hong Kong, China and South Korea, for example only disclose the filing of the top dozen officials, when requested. Indonesia makes the declarations publicly available through a website that links to the site maintained by the country’s anti-corruption agency.

Meanwhile, “access to financial disclosures of public officials and employees is a constitutional right in the Philippines, but not in Vietnam,” said Dix. “Freedom of information is an international human right, but governments also have the right to put some restrictions on public access to sensitive information,” she said.

The State Department report also weighed in, saying the Vietnamese laws did not provide for public access to government information, and the government usually did not grant such access to its citizens. With no solution in sight, “millions of asset disclosures will continue to collect dust, and the public will lose faith in government,” Dix said.

Transparency by Burglary

Given that, burglars may have a better chance than inspectors of finding out how much money officials are accumulating in a country where the average person earns just the equivalent of about $2,000 a year. In fact, several high-profile cases in which bandits targeted governmental official have laid bare corruption and irony.

In 2014, a senior official of the Ho Chi Minh City municipal administration reported a theft of around $77,000 in cash, saying it had disappeared from the desk drawer at his office. A year earlier, four thieves were caught breaking into the house of a finance official in the Central Highlands province of Kon Tum to steal nearly $143,000 worth of property. Also in 2013, a man received seven years in jail for stealing more than $472,000 from several government officials in the central city of Da Nang and neighboring Quang Nam Province since 2010.

Analysts say without public scrutiny, corruption will continue with impunity and permeate the whole network from top to bottom and bottom to top, punishing the most average people. Vietnam’s most recent Governance and Public Administration Performance Index has confirmed that about one fourth (24 per cent) of its citizen respondents reported paying “informal charges” for their land use right certificate. About 12 percent reported having to pay a bribe for hospital services, while almost one third (30 per cent) of respondents with children in primary school said they’d been illicitly solicited by educators.

“The index makes very clear that corruption is endemic in Vietnam,” said Zachary Abuza, a Southeast Asia analyst in Washington. “But when one looks at the trend over four years, what is most troubling is the strong and positive correlation between corruption and poverty. The poorest provinces also fare the poorest in four years of survey results,” he said.

In a country where corruption is rife in public infrastructure projects, ordinary people are still suffering from a lack of much-needed bridges. It is not unusual to see children and adults crossing rivers in innovative ways. A video that went viral in 2014 showed students and teachers in a northern province crossing rough water by putting themselves in plastic bags.  Each bag was pulled across the river by some strong local men swimming with one arm and using the other to grasp  the bag above the head of the person inside. Elsewhere, stories of locals in remote areas crossing rivers by zip-line have sporadically popped up in the social media, stirring public indignation.

The nation’s most senior figures have often admitted that corruption is chipping away at people’s confidence. They did so again at the national congress of the Communist Party in January, when the new leadership was picked.

But analysts say this is a make-or-break juncture for Vietnam to repair shattered public trust, as the country is reviewing its Anti-Corruption Law after a decade of implementation. Loopholes in regulations on financial disclosures should be addressed in the amended law, analysts say.

Failure to do so will  “make a mockery of the authorities,” said Abuza, the Washington-based analyst. “The bind for the Communist Party is that they know corruption is an existential threat, the issue that could cause them to lose popular legitimacy, but they know that their own members are the ones who have been able to benefit the most from an economy stuck between the plan and the market.”

“There is still too much state control over the economy, which allows connected insiders to profit.”

Dien Luong is an MS Candidate at Columbia Journalism School, New York.