Vietnam’s economic transparency under strict scrutiny

Posted on July 15, 2012

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The Government Inspectorate and the State Auditing Agency have recently inspected many State-owned enterprises (SOEs) and discovered their big debts. Though some SOEs operate at big loss but their officials still get promotion or have “safe landing.”

International partners are paying greater attention to transparency in Vietnam’s socio-economic development before they make decisions on investment and cooperation.

According to the recent survey “Vietnam in Transition: Changing Attitudes towards the Market and the State 2011″ (CAMS 2011), jointly conducted by the Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank (WB), transparency is one of the most important criteria in the market economy. It plays a key role in establishing organisational principles and administrative management goals. However, there is growing concern over transparency in Vietnam’s socio-economic situation.

Dr Dau Tuan Anh, deputy Head of the VCCI Legal Department, says around 92 percent of participants in the CAMS 2011 survey, mostly media workers, researchers, diplomats and international organisation staff, emphasized the need to ensure transparency in drafting plans and implementing State policies.

The survey shows that transparency in making and implementing policies is still low. Dr Tuan Anh says most Vietnamese people are not fully aware of how important transparency is to the policy making process.

Sharing this view, leading economist Le Dang Doanh says international partners are familiar with transparency in the global market but now they are facing an unpleasant lack of transparency in Vietnam.

The Provincial People’s Committees, as well as ministries, and other agencies, are pessimistic about the transparency situation in Vietnam, which is bringing to bear upon them, Doanh says.

In the current context of deeper international integration, people and civil organisations in both Vietnam and abroad are not satisfied with the transparency situation in the country.

Dr Nguyen Tran Bat, Chair and general director of Investconsult Group, says Vietnam’s transparency in almost all sectors is being closely scrutinised from different angles by the outside world.

Bat elaborates that before deciding to invest in Vietnam, investors must know facts and figures such as per capita GDP, purchasing power, and consumer demand in different areas across the country. If investors do not have this important information confirmed by the government, they cannot devise an investment strategy nor do business in Vietnam. Transparency requires accurate and adequate information on all relevant factors to help properly assess investment risks, he adds.

Deputy minister of Planning and Investment Dang Huy Dong says transparency in the national economy will have a significant impact on attracting foreign direct investment (FDI), especially when Vietnam gives priority to the development of the FDI sector on an equal footing with other economic sectors.

He considers the FDI, private and State-owned sectors the three key pillars that make it possible for Vietnam to achieve an average annual economic growth of around 7 percent.

To attract more FDI, Nguyen Xuan Trung from the Vietnam Academy of Social Sciences (VASS) claims it is essential to have a synchronous and transparent legal system to ensure strict implementation of policies at all levels. He also underlines that legal guidance must be issued promptly and comprehensively to avoid “exceptional cases”.

Country director of Asian Development Bank (ADB) in Vietnam, Tomoyuki Kimura, emphasizes that increased transparency regarding the financial activities of State-owned enterprises (SOEs) will be an obvious signal that the Vietnamese government is really committed to pushing through reforms.

Vietnam must improve its transparency if it wants to build partnerships and consolidate investor trust, he adds.

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Posted in: Corruption, Economy