Vietnam: To do business, more than half of Vietnamese companies pay bribes

Research by Chamber of Commerce confirms that half of the companies must pay bribes for contracts and permits. The vice-president of the body speaks of short-sighted policies that in the "long term" undermine " business and competitiveness." The proposals: wage increase for civil servants and harsh ...

Hanoi - In order to do business and enterprise, at least half of Vietnamese companies have to pay "bribes" which end up in the pockets of government officials and high-level state officials. This is shown by a new survey, conducted by the Vietnam Chamber of Commerce and Industry (VCCI) and published recently by Radio Free Asia (RFA). Still, more than 80% of companies in the country states that corruption "has significantly undermined" business and transactions.

The VCCI's survey examined the responses of 270 companies, enterprises  and employees of public administration in Vietnam. About 50% confessed to having paid bribes to government officials and leaders in the form of money, luxury goods and leisure travel in exchange for benefits, permits or concessions. 63% also said that the system of permits and licenses is too "confused" and creates grey areas that lead to the paying of bribes.

Doan Duy Khuong, vice-president of VCCI, said that companies "think of the immediate gains they will make" and therefore subject themselves to the logic of bribery and corruption. In contrast, "in the long run - the official added - this practice ends up undermining the competitiveness and success in business." 40% of the business people said that a large part of their annual budget is devoted to "unofficial" expenditure; for 13% of respondents the figure rises to 5% of total business costs. An additional 40% added that maintaining "close relations" with officials or agencies related to land and property "streamlines" the process to obtain permits.

According to the VCCI it has been common practice for companies to pay "unofficial" taxes to organizations and agencies to protect food quality and hygiene, natural resources and the environment, as well as welfare and social services. Over 50% of them claim that you can not get a bank loan, without paying a "tip" to the manager, for 60% it is important to establish "good relations" with the bank for a loan and to do business.

Finally, two thirds say that the cause of the widespread system of kickbacks and bribes is due to the low wages received by state officials and civil servants, which to round up their incomes by pocketing bribes. For this reason, the VCCI suggests that the Hanoi government should increase salaries and strengthen moral and ethics in the workplace. Added to this is finally the request to increase the penalties for those who break the law and are caught pocketing money or other forms of bribery.

Source: Asia News


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