ODA corruption: It’s time for Vietnam to review the system
ODA corruption: It’s time for Vietnam to review the system
"It's a shame," was a comment heard from many experts who spoke to the media about the recent allegations of ODA corruption in Vietnam. Most agreed that anti-corruption measures are ineffective.
Slush funds and bribery scandals
Vietnam’s citing of figures showing the efficient use of ODA has been overshadowed by news about embezzlement of funds in highway projects.
Vietnam should take all possible measures to thwart corruption in projects funded by Japan’s ODA loans; otherwise, Japanese aid will stop, Mori Mutsuya, chief representative of the Japan International Cooperation Agency (JICA) in Vietnam, said at a news briefing in Hanoi on April 1.
Mutsuya said JICA wanted the high-profile JTC graft case to be the last related to projects financed by Japanese aid in Vietnam because if there is yet another case emerging, the Japanese taxpayers would force their government to suspend ODA for Vietnam.
Mutsuya issued the warning when he fielded questions at the news briefing about Japan’s response to bribery allegations in connection with the Japan Transportation Consultants Inc. (JTC) in a railway project in Vietnam.
In March last year, Japanese newspaper Yomiuri Shimbun reported that JTC President Tamio Kakinuma had admitted paying kickbacks to civil servants in Vietnam, Indonesia and Uzbekistan in return for five ODA projects. This company was suspected of having paid illegal payments to five government employees, including a senior official of an office responsible for project administration at Vietnam Railways.
Most recently, the South Korean steel giant Posco has been suspected of setting up a slush fund for highway projects in Vietnam from 2009 to 2012.
Korea Times reported Posco’s managers have been accused of running a slush fund worth 10 billion won ($8.9 million), for the transport projects. The managers were found colluding with local sub-contractors to exaggerate the estimates for highway projects in Vietnam.
Ugly image
"I find it embarrassing when JICA said if it (ODA corruption) happens the third time, they will no longer grant ODA for Vietnam. Every time there is a suspected case of ODA bribery, the world will know more about Vietnam with bad images. We need to seriously re-examine our systems," said Dr. Le Dang Doanh, former chief of the Central Institute for Economic Management.Dr. Dang Ngoc Dinh, director of the Center for Community Support Development Studies said that such incidents also urge people in the ODA providing countries protest their governments from giving ODA to Vietnam as their tax money is used improperly.
"Such incidents create a bad name for Vietnam, making Vietnam’s transparency and integrity worse. This also affects the development of Vietnam because it will be more difficult for Vietnam to borrow ODA. Also, things like these make Vietnamese people frustrated and disappointed," said Dinh.
Dinh said the latest case of ODA corruption allegation reflects the worrying corruption and bribery situation in Vietnam. Corruption and bribery can be seen in daily life. People have to bribe to send their children to famous schools, they have to pay doctors to be treated well or they have to give money under the table to win contracts or bids.
"Once tiny corruption becomes common, then surely there will be big corruption cases," Dinh said.
Dinh said that ODA is granted by foreign governments to the Vietnamese government at low-interest rates and with a grace period. But ODA is given to specific projects, which are implemented by the companies of both sides. In most cases, the Vietnamese companies are state-owned and the foreign ones are private firms.
"The private companies in Japan, Korea and the United States dare not bribe their countries but in Vietnam, they have to do as the Vietnamese do," Dinh said.
Tight control of ODA
Experts noted that all the suspected cases of ODA corruption in Vietnam have been discovered by foreigners. Doanh said the biggest loophole in ODA projects are at the stages of procurement, supervision and contract signing."So we have to seriously review the bidding process and the supervisory task. Clearly, the control system has a very large hole, the transparency, internal supervision is ineffective and the use of cash in Vietnam hinders the control of the real income of the officials," Dr. Doanh said.
In other countries, state officials have to prove the origin of the money they have when they buy houses or cars, while Vietnamese officials do not.
"These cases also show that Vietnam’s anti-corruption measures are ineffective and it is time to look at the fact that other countries can detect ODA corruption while we cannot, and we still react very slowly," Dr. Doanh said.
Ms. Le Thi Nga, Vice Chair of the National Assembly Judiciary Committee, said that improving the effective management and use of ODA is very urgent, especially in the current situation of public debt and corruption. The legal framework for ODA management in Vietnam is now at the decree level so the legal effect is low.
Nga suggested the National Assembly issue a law on management and use of ODA and conduct close supervision of ODA to strictly control the efficiency of ODA use, to prevent losses and waste in ODA use and at the same time to use ODA selectively, to have a roadmap to put an end to ODA borrowing in the near future.
