Sofia Jefcoate*

Bangkok, 19/06/2024

This article discusses what corruption is and the history of corruption in Vietnam. It then goes into detail about the Anti-Corruption campaign launched in 2013 which has accelerated over recent years. This campaign has had both positive and negative implications on the country’s political and economic systems – which will also be discussed. 

For context, Vietnam is a communist state run by one party and has been since 1975. It currently serves under the name The Communist Party of Việt Nam (CPV) (Croissant, 2022).  This means that there is no private ownership of property, services or goods, therefore, the state owns everything and determines the distribution and allocation of all means in society – the aim is to have no inequality (Features of Communist Society, n.d.). As a result, the CPV has ultimate power in the country. Within the CPV there are four key positions in the National Assembly  (the overarching political institution) known as the ‘Four Pillars’: General Secretary (the most powerful position), State President, Chairman of the National Assembly and Prime Minister (mainly a ceremonial position) (Nguyen, 2022).  

The government also controls all media in the country, ranking 174/180 on the Press Freedom Index. One reason for ranking so low is that they are the third largest jailer of journalists. Another reason is that they have a cyber-soldier unit with 10,000 soldiers who defend the CPVs reputation online. Finally, they have strict censorship laws on topics such as human rights, questioning the legitimacy of the CPV and the corruption of high ranking officials (Reporters Without Borders, 2024). Therefore, facebook, bloggers and citizen journalists are popular news sources (“Vietnam Profile – Media,” 2018). However, in order to maintain public satisfaction and reassure citizens of CPV’s commitment to the anti-corruption campaign, the government has been more transparent (Truong, 2024); for example, the case of Truong My Lan caught the attention of the international media after she was sentenced to death for embezzling $12.5 billion which is estimated to be 3% of the countries GDP (Davis, 2024).

Vietnam has struggled for decades with corruption and continues to do so. In 2023 it ranked  83/180 on the corruption perception Index with 64% of Vietnamese people thinking corruption is a big problem and 15% of public service users paying a bribe in the past 12 months (Transparency International, 2023). Similar things were found in a 2012 survey that was conducted with 13,500 respondents; one-third said bribery was necessary to receive medical care – this stretches to all sectors including education. It is estimated that at the time of this survey in 2012, $125 was the average amount spent a year on bribes whilst the average monthly income was only $150 (Brown, 2012). One explanation for widespread corruption is the belief that uncovering corruption within CPV will undermine the party’s rule and show weakness. 

In Clause 2 from Article 1 of the 2005 Law on Anti-Corruption of the Socialist Republic of Vietnam, corruption is defined as, “an act committed by a person in a position of power who has abused their position and/or power for personal benefit.” (Mény & Sousa, n.d.). Examples of corruption include bribery, clientelism and embezzlement. Bribery is when a person in a trusted position receives an advantage, for example, money or a favour, in exchange for an illegal or unethical act (Transparency International UK, n.d.). Clientelism is allocating a client, who could be a friend or relative, private goods such as contracts in return for favours (Roniger, n.d.) and embezzlement is when someone entrusted with legal assets, for example, government funds uses them for their gain (Hearty, 2023).

However,  General Secretary Nguyen Phu Trong started an anti-corruption campaign known as ‘Blazing Furnace’ in 2013 to try and tackle corruption which has had great success (Giang, 2023). Since 2013, there have been nearly 20,000 party members disciplined and since 2021, 7,500 individuals have been investigated for corruption (Nguyen & Giang, 2023).  CPV also passed a new Anti-Corruption Law in the National Assembly on 20 November 2018. The new law came into effect on 1 July 2019 and outlines regulations and actions for the prevention and detection of corruption (Nguyen, 2019).  This campaign has had both positive and negative consequences in Vietnam which have stretched far beyond politics.

One positive effect of ‘Blazing Furnace’ is that there has been a significant decrease in the informal cost of doing business. A survey conducted by the Vietnam Chamber of Commerce and Industry found that the rate of businesses paying unofficial fees dropped by 39%  to 41% between 2006 and 2021. This is beneficial to Vietnam as research has shown that bribery has negative impacts on innovation and productivity consistently across countries at all levels of development (Wu & Meeks, 2019). This is particularly important in the context of Vietnam as CPV states that innovation is the ‘driving force’ to improve the Vietnamese economy (Vietnam Plus, 2024). 

A reason innovation stalls in an economy filled with corruption is that government officials are more likely to target innovative than non-innovative firms whilst there is no evidence to suggest they receive better government services as a result of their bribes. This corruption also serves as a form of tax, decreasing profits and consequently the motivation of innovative firms (Ayyagari et al., 2014). However, to further support innovation in Vietnam, the Vietnam Ministry of Science and Innovation released the Provincial Innovation Index in March 2024 which focuses on the best ways to improve innovation on a local level. 

Another positive impact of reducing corruption is that it also increases the attractiveness of Vietnam to foreign countries that may want to invest in their economy. This is because reducing corruption makes the economy less impenetrable and more streamlined (Guha et al., 2020). Ultimately, this is beneficial for economic growth in Vietnam as there is a strong positive correlation between Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) growth (A. T. Nguyen, 2022). 

On the other hand, corruption can act as a form of ‘speed money’, ensuring that processes happen quicker therefore, removing bribery and corruption can slow down the bureaucratic system and cause disruption to critical services such as health care. Nevertheless, this is generally only a short-term problem as once corruption is tackled on a larger scale, the systems in place are addressed and made more efficient consequently decreasing the necessity of corruption (Thoma, 2006). 

Disruption and the slowing down of services as a result of ‘Blazing Furnace’ is shown by the statistic: 65% of large hospitals in Vietnam experienced shortages of medical equipment and drugs in 2022 (Guarascio, 2022). This is due to the fact officials have become frozen in fear of inadvertently breaking rules which can in some instances be easily misinterpreted. They therefore fear being caught up in the anti-corruption drive. As a result, new contracts to meet the demand for certain medical equipment and drugs aren’t being signed or created. 

In conclusion, this article has given some context to the political structure in Vietnam and defined what corruption is. It has also discussed the potential positive outcomes as well as the ramifications of the anti-corruption drive, with statistics to give an impression of the scale of this campaign.

* Sofia Jefcoate is a research associate at HDFF.

References

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