Corruption still popular among local businesses

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VietnamNet English - 71 month(s) ago 15 readings

Local enterprises still engage in corrupt practices in exchange for favorable conditions for business activities, said a research on corruption situation in Vietnam.

Corruption has become more and more popular among Vietnamese business community as well as between enterprises and the State agencies, leaving far-reaching impacts on the local business environment, said the research results announced on Wednesday by the Vietnam Chamber of Commerce and Industry (VCCI) and the Development and Policies Research Center (DEPOCEN).

The results are based on the direct interviews with 270 enterprises, associations and governmental officials. Most of the respondents admitted they are victims of corruption but also bribe-givers themselves,

The survey participants are fully aware of the negative impacts of corruption on the local business environment, as well as relations among enterprises and between enterprises and the public sector.

Some 40% of the respondents said unofficial expenditures accounted for around 1% of the total annual business expenditures, while 13% said such expense made up 5%.

A considerable 63% of the surveyed enterprises shared the view that corruption occurred between enterprises and the State management agencies right in the process of business registration and other licensing processes. “The complicated and ambiguous system of trade licenses is a cause of corruption in Vietnam,” said a respondent.

Regarding the land use procedures, 40% of the enterprises believed they had to have personal relationships to receive allocated and transferred land.

Businesses also spend hefty unofficial expenses on tax, custom and market management agencies.

The survey participants expressed neutral opinions on biddings and goods procurements, but a half of them admitted giving gifts to the officials in charge of biddings is very common.

Corrupt practices between enterprises and enterprises are also popular. Organizing biddings is considered a transparent way to select capable suppliers, but not all enterprises follow this way.

Only 30.45% of the surveyed enterprises replied they chose suppliers via biddings, but less than 8% said they always do so.

Even during the bidding process, enterprises are willing to adopt preferential polices for the contract negotiators of the other parties, with 30% of the respondents saying they regularly do so and 40% sometimes or rarely do.

Most enterprises said they often pay kickbacks worth below 5% of the contract values, while a few others said the percentage is over 10%. Kickbacks in the service sector are said to be higher than in production and trading.

The popularity of corrupt practices in the local business community partly explains why Vietnam always ranks among the bottom nations in the Corruption Perceptions Index of Transparency International in the last seven years, regardless of the efforts to reform the country.


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