‘Burning furnace’ purge stoking new faith in Vietnam – Asia Times

'Burning furnace' purge stoking new faith in Vietnam - Asia Times

In the blistering oven of Vietnam’s anti- problem campaign, the flames have raged strongly, engulfing Communist Party officials like dried tinder. Some people were quickly sacked, while people saw their social occupations smoldering beneath the surface.

First, this circumstance appeared to convey a management problems with the termination of five out of 18 Politburo members, two presidents, one National Assembly chair and two prime ministers. However, Vietnam’s improved economic prospects are inevitably boosted by less corruption.

Nguyen Phu Trong, the 80- yr- old secretary- standard of Vietnam’s Communist Party, has relatively spared none in tackling the state’s widespread level of corruption.

The foreign investors who benefit from the reduced costs of conducting business, simplified administrative procedures, and the dissolution of ensnared, frequently crooked interest groups are among the beneficiaries of his “burning furnace” law to boost transparency and good governance.

In Vietnam’s political system, the principles of “democratic authoritarianism” and” shared leadership, personal duty” remain as important pillars governing the organization and functioning of the Communist Party of Vietnam.

The 13th National Congress passed a resolution outlining the nation’s developmental trajectory for the 2021- 2030 period. The high-ranking officials ‘ rotation neither alters the flow of business nor departs from Vietnam’s policy direction.

Instead, it advances the implementation of crucial policies that the Congress ratified and strengthens the political system.

After all, Vietnam’s dynamic economy, the envy of all of Southeast Asia, has been on a stable growth path, driven by robust domestic demand and export- oriented manufacturing for over two decades.

Many economists predict that Vietnam will join ASEAN and the Greater Mekong Subregion in achieving rapid economic growth, making the acclaimed” Asian Tiger” the 20th-largest economy in the world by 2050.

Trong’s swift and defensible actions in the removal of discredited Party officials merit praise. The Party is well-known for its commitment to promoting a conducive and equitable business environment, including for international investors.

Vietnam recently vigorously pursued the property developer Van Thinh Phat Group. Although the US$ 12 billion fraud scandal has sparked some immediate and long-term effects and gained some attention in the public and abroad, it will ultimately encourage a more healthy financial system.

Truong My Lan, chairwoman of Van Thinh Phat Holdings Group, was sentenced to death on April 11 by the Ho Chi Minh City People’s Court. Photo: X Screengrab

In response to the scandal, which saw the chairwoman of Van Thinh Phat Group receive a death sentence for her role in the massive banking fraud, the State Bank of Vietnam has taken action quickly to reassure depositors, improve control, and improve transparency in the banking system.

Building on earlier efforts to combat corruption, the burning furnace campaign builds on them. More than 800 corruption cases have been investigated and prosecuted by the Central Anti-Corruption Steering Committee ( CACSC), which was founded in 2013, according to a study.

That does not, however, mean that politically connected businesses gain more from the anti-corruption campaign than non-connected ones. However, recent analysis has revealed that the anti-corruption initiative is generally boosting investor efficiency in the public sector.

The problem, to be sure, is n’t new: the concept of corruption was recognized officially in the documents of the 6th National Congress in 1986. Then, corruption was viewed as a social evil that could be eradicated through strict inspection procedures.

Vietnam had signed the UNCAC by 2003. Although the nation had already ratified the Corruption Action Plan for Asia, the process was finished in 2009.

According to the 2021 Provincial Competitiveness Index (PCI) survey completed by the Vietnam Chamber of Commerce and Industry, the rate of businesses paying unofficial fees or what is sometimes referred to as “red envelopes”, had dropped from 70 % in 2006 to 41.4 % in 2021.

The Communist Party’s standing both domestically and abroad has been strengthened by Trong’s most recent anti-corruption initiative, which builds on that success. And as the government continues to implement policies that promote the growth of the economy, capital markets, and banking sector, it is arguably had little to no effect on Vietnam’s commitment to liberalizing reforms.

Meanwhile, Vietnam continues to scale the value- added ladder. High-tech products are now the focus of Vietnam’s primary exports to the United States, with many Apple products now being produced in Vietnam.

The nation’s exports of high- tech goods increased from 13 % in 2010 to 42 % in 2020, according to Long S Le, a lecturer at the Leavey School of Business at Santa Clara University.

The World Bank projects that Vietnam’s economy will continue to grow by 5.5 % in 2024 and 6.6 % in 2025 despite the conflict between Israel and Gaza and the global geopolitical strains caused by the war in Ukraine and the Gaza conflict.

Ho Chi Minh, Vietnam’s president at the time, issued a warning to citizens about greed in advance of the Democratic Republic of Vietnam’s establishment, warning that it might turn into a serious national issue.

Doi Moi“, or Renovation, the nation’s path toward creating a socialist- oriented market economy first initiated in 1986, created many new opportunities for bribery and fraud.

The public and private sectors ‘ salaries were significantly impacted by the transition from centralization to free trade and a market economy.

Now, bribery is still rampant across Vietnamese society, with payoffs often made to police, school admissions departments and for employment opportunities.

Among public officials, there’s one clear reason for corruption: stubbornly low salaries. For example, the basic monthly salary for a provincial judge is$ 253 while a school teacher earns only$ 100 a month. Researchers have highlighted how corruption is still a result of low wages.

Low wages contribute to Vietnamese corruption. Image: Facebook

The real estate sector and related industries, which make up at least 16 % of GDP, have now experienced a significant cooling effect as a result of Trong’s anti-corruption campaign. Real estate markets across Vietnam have been impacted significantly by the country’s unrestrained criminal justice system.

However, a boom in factory land demand has been caused by changes in the global supply chain that favor Vietnam, including the US’s decision to decouple from China.

Vietnam’s ambitious anti- corruption efforts have prompted top- level resignations, spurred renewal among Party officials and ultimately are building confidence in the Party and Vietnam’s broad business environment.

Effectively, the campaign has reassured the sclerotic bureaucracy that overarching authorities are closely monitoring their actions. The resultant unease among officials and the general public may help to encourage further political reform and end corruption’s long-standing root causes.

James Borton is the author of Dispatches from the South China Sea: Navigating to Common Ground and a non-resident senior fellow at Johns Hopkins/SAIS Foreign Policy Institute.