1. While Vietnam’s anti-corruption push has been ongoing for several years, 2022 marked an acceleration in the process with several high-profile take downs. How is this being seen by your clients, and is it having any impact on the speed at which business is being conducted in Vietnam?
Answer: On the one hand, this is considered as a good sign for foreign investment in Vietnam. Top authorities would still welcome big projects to maintain the country as a destination for investments. Corruption in licensing process, which is quite frequent in Vietnam, varying from small to big ‘gifts’, will possibly be less as authorities are fear of being investigated and caught up. On the other hand, this could also slow down business approvals and project implementation progress. Officials fearing potential charges on wrongdoings or alleged corruption are more likely to delay approving projects that might put them at risks.
2. We’ve heard some rumblings about slowdowns in license acquisitions and in public financing for approved infrastructure projects because officials have become a bit scared of being caught up. Have you experienced anything like this? How does that level of scrutiny compare to previous years?
Answer: As mentioned in our answer above, there are actually certain delays in approving infrastructure projects. We have been given several reasons for this delay but only the authorities know exactly the underlying obstacles. This happens more to big projects rather than small sized ones.
3. I’d be curious in any specific examples if its possible to avoid naming names — just to give our readers a sense of what’s happening on the ground.
Answer: Ho Chi Minh metro project should have been operated about 10 years ago but there is still a lot to be done. Government-officials have less interest in implementing capital-investment projects because they fear exposure to investigations.
4. How big an issue is this kind of scrutiny/slowdown likely to be, especially if Vietnam continues its anti-graft campaign at the same tempo in 2023? And ultimately, how does that jive against the country’s other major priority — to encourage foreign investment?
Answer: In the short term, the anti-graft campaign will not jeopardise Vietnam’s growth. Mr. Trong wants Vietnam to become a middle-income country by 2030. Friendly and attractive business environment is still among top priorities as the country economy needs foreign investment. Party cleanup is political and might be at the expense of those who are foreign investment friendly. However, in the long run, clean companies will benefit more from this anti-corruption campaign while state related companies/ projects might face more slowdown. Honest officials should be able to approve projects without being fear of being arrested.
Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.