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Half of Companies Bribe Officials in Vietnam

<span style="display:block">From <a target="new" href="http://www.rferl.org/">RFA</a></span>

Policemen on motorcycle in Hanoi, Vietnam, June 11, 2010
Policemen on motorcycle in Hanoi, Vietnam, June 11, 2010
Joshua Lipes

Nearly half of Vietnam’s companies say they have had to bribe officials in order to do business, a new survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) revealed.

Some 80 percent of businesses in the country reported their operations had been negatively affected by corruption, the survey, released Wednesday, claimed.

Of the 270 business and entrepreneurs, business associations, and civil servants interviewed for the survey, nearly 50 percent said they had to pay bribes, which consisted of cash, luxury items or holiday packages, to officials in return for the right to bid on contracts for public sector work.

Around 63 percent of respondents said that the system of licensing a business was too confusing and was a leading reason for the graft.

“There are many reasons for businesses to opt to give bribes to state officials, and when they are doing so, they think about the short time benefits they can gain," said Doan Duy Khuong, vice chairman of the VCCI.

“However, in the long run, such a practice will undermine their business ability and damage their competitiveness, since they have become much more reliant on bribes than on their capabilities to obtain their goals,” he added.

Forty percent of businesses polled said that “unofficial” expenses account for one percent of their annual operating costs, while 13 percent of respondents said the rate was as high at five percent of costs.

Only 31 percent of those polled said the procedure of granting land use rights had become more simplified, but half of the respondents complained about the complexity of land allocation, and 40 percent said maintaining “close relationships” with land officials would get a company through the process more easily.

‘Unofficial expenses’

According to VCCI, “unofficial” expenses are routinely paid by firms to agencies which safeguard food quality and cleanliness, natural resources and the environment, and social welfare.

And more than 10 percent of the businesspeople polled said that the “under-the-table” money they had to pay to tax, customs, and market management agencies was remarkable, and sometimes “huge.”

More than 50 percent of respondents said that they could not obtain a loan without paying a “tip” to officers at the bank, while 60 percent said they had to establish “good relationships” with banks if they wanted to get a loan.

In many cases, the survey said, officials personally suggested that businesses pay them a bribe or a gift in return for assistance resolving problems. It said the phenomenon was most commonly seen in the land, banking, and business registration industries.

As many as 87 percent of surveyed businesses said corruption in Vietnam was a result of legal loopholes exploited by corrupt state officials, while 75 percent said ineffective law enforcement had allowed the spread of corruption.

About two-thirds of the respondents said low salaries for civil servants are among the main causes of corruption.

In order to combat corruption, VCCI suggested that the Vietnamese government take measures to increase legal income for civil servants, strengthen the moral education of state employees, and raise the level of punishment for those convicted of accepting bribes.

Vietnamese officials have said corruption and rising inequality poses “the biggest risks to the ruling party.”

Find more coverage at Radio Free Asia
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