University of New York in Prague School of Business Bachelor of Business Administration Program FINAL PROJECT Assessing the role of corruption in Vietnam, its implications and remedies Author: Dat Thanh Quach Mentor: William A. Cohn Statutory Declaration / Čestné prohlášení I, Dat Thanh Quach, declare that the paper entitled: Assessing the role of corruption in Vietnam, its implications and remedies was written by myself independently, using the sources and information listed in the list of references. I am aware that my work will be published in accordance with § 47b of Act No. 111/1998 Coll., On Higher Education Institutions, as amended, and in accordance with the valid publication guidelines for university graduate theses. Prohlašuji, že jsem tuto práci vypracoval/a samostatně s použitím uvedené literatury a zdrojů informací. Jsem vědom/a, že moje práce bude zveřejněna v souladu s § 47b zákona č. 111/1998 Sb., o vysokých školách ve znění pozdějších předpisů, a v souladu s platnou Směrnicí o zveřejňování vysokoškolských závěrečných prací. In Prague, 26.04.2019 Dat Thanh Quach Acknowledgements: I would like to express my gratitude to my parents, to whom this thesis is dedicated and whose love and support have given me the strength to finish this thesis. I own my sincere thanks to my great-uncle Thang Manh Nguyen for his guidance and valuable insight. And besides my family, I extend my thankfulness to my mentor William A. Cohn for his support in the entire process of writing this thesis. Under your guidance, I have been inspired to seek and improve my knowledge. Your feedbacks and recommendations have helped me so much in completing this paper. I also want to thank all the responders of my personal interviews. Abstract This thesis explores the current state of corruption in Vietnam and finds out about its implications which have been widespread in all sectors. With a primary research on the citizens’ perspective, it shows that the Vietnamese people and corruption have a somewhat harmonious co-existence, as most Vietnamese citizens consider bribery as a common practice. It then examines some anti- corruption efforts from Singapore and Norway in order to learn from their experience and to obtain possible remedies. The thesis concludes that there are a few remedies that could be applied in Vietnam to fight against corruption, which are implementing new Anti-Corruption Law and more severe penalties, having a more transparent and accessible system, adopting cryptocurrencies and blockchains, and improving the salary policy. Keyword: Vietnam, corruption, remedies, implications, graft, anti-corruption. TABLE OF CONTENTS Introduction ................................................................................................................................. 1 1. Understanding Corruption ................................................................................................ 3 1.1 Defining Corruption ....................................................................................................... 3 1.2 Corruption’s effects on Vietnamese Society and Business Environment...................... 6 1.3 Interviews on Vietnamese citizens’ perspectives on corruption .................................. 19 1.4 Vietnamese people’s perspectives toward corruption ................................................. 21 2. Anti-Corruption ............................................................................................................... 29 2.1 Anti-corruption in other countries in Asia .................................................................. 29 2.2 Remedies ....................................................................................................................... 33 Conclusion.................................................................................................................................. 42 References .................................................................................................................................. 46 Figure 1. The Ease of Doing Business in Asia. ............................................................................... 5 Figure 2. The GDP Growth in Vietnam from 2010 to 2017 ............................................................ 6 Figure 3. The Wedding of Rats (Đám cưới chuột). ....................................................................... 22 Figure 4. Several patients sharing one bed in a Vietnamese hospital. ............................................ 27 Figure 5. Minimum and Living Wages in Vietnam (in VND, per month). ..................................... 41 List of Abbreviations PCI Provincial Competitiveness Index VCCI Vietnam Chamber of Commerce and Industry NSC National Supervisory Commission CPV Communist Party of Vietnam VND Vietnam Dong PCI Provincial Competitiveness Index VCCI Vietnam Chamber of Commerce and Industry NSC National Supervisory Commission INTRODUCTION Since the Vietnam War ended on April 30, 1975, the socialist model in Vietnam began to collapse. Being cut off by the US and denied reconstruction support, Vietnam sank into poverty after the war (Elliott, 1992). Fortunately, since the government’s implementation of a new market- oriented economic reforms (Đổi mới Policy in 1986), the people’s living standards in Vietnam have been ameliorated. However, with the marriage of the communist political system and the capitalist economy in Vietnam, the corruption culture has been prevalent (Vuvinh, 2013). Some 40 years have passed, the booming of Vietnam’s economy has been going hand in hand with corruption epidemic (Davies, 2015). In recent years, although the GDP grew steadily with 5-7% per year from 2010 to 2017 in Vietnam, the corruption in Vietnam is still rampant and remains a critical issue (The World Bank, 2019). It has been permeating into Vietnam’s society, business environment, and even into citizens’ mindset, to a state that more than half the nation accepts it as a way of life (United Department of State, 2018). For organizations (both national and local; foreign and international), they have experienced bribery, political interference and shady facilitation payments in every sector they have encountered (GAN Integrity, 2017). For society and the people, the situation is even worse when people have already accepted it, and to a certain extent, even “love” it. One popular norm in Vietnam about corruption is that “the poor detest it, the rich embrace it, and the middle class hate it but cannot live without it”. As such, it indicates that they have been withholding the ugly truth about corruption itself and tolerating it for far too long, and it has lurked inside their minds deeply that they no longer detest it (Ngo, 2017). As a result, corruption has made Vietnamese people to accept it as a crucial part of their daily life and even evolved itself to become a Vietnamese culture. Nevertheless, the Vietnamese government has endeavored to fight 1 corruption. Though the results are not truly optimistic, there are notable attempts in changing the current state of corruption in Vietnam from some influential politicians (Tran, 2019). The elite leaders do recognize the severe threat of corruption posed to the economic development of Vietnam, but the true question is, would they be willing to sacrifice their privileges and other perks they are enjoying today for a better development of the country, and for the next generations in the future? The goal of this thesis is to look into how deeply the corruption in Vietnam has spread throughout the society, business environment, and government system since a good understanding of the issue is needed before it can be dealt with. Subsequently, its implication and remedies shall be assessed to shed light on possible elimination of the corruption in Vietnam effectively. There are many countries that have successfully dealt with corruption, hence, with proper regulations in combination with educating its citizens, Vietnam can possibly achieve similar results. In this thesis, qualitative research methods will be used in order to seek answers to the questions and obtain remedies of the problem. At first, a primary research shall be conducted by surveying and interviewing people in Vietnam, who can provide some real opinions along with local perceptions about the corruption in the country. Additionally, as there are already numerous online and offline sources, along with downloadable books and documentaries about the corruption in Vietnam, this research will also be used in order to provide appropriate remedies, from both scholarly and ordinary views. By conducting interviews and surveys with people who have been experiencing corruption in Vietnam firsthand, as well as combining the readily available academic sources, it should be sufficient to provide good results on the subject matter. 2 1. Understanding Corruption This chapter starts with definition of corruption types as defined in Vietnamese law and regulations and then shows the current state of corruption and its detrimental effects in Vietnam. Furthermore, the characteristics of corruptions viewed in the eyes of Vietnamese people will be discussed. 1.1 Defining Corruption Before discussing about corruption and its implications, it is important to understand the definition of corruption from different perspectives. Although the term corruption is somewhat meaningless, as it is inclusive and encompassing numerous types of fraud such as bribery, nepotism, extortion, or vote buying; this paper will only focus on the general