Vietnam Endeavors to Make Good on Anti-Graft Pledge

In unofficial circles, Deputy Prime Minister Ngo Xuan Loc was known as “Mr. Cement,” a man of uncommon wealth who oversaw a 1990s building boom and the development here of an unfinished, scandal-plagued water park.

By last autumn, questions about his deal-making were swirling even in the state-run press--a sure sign that the Communist Party had sanctioned the discussion. On Nov. 11, the ax fell: Loc was dismissed from his post by the Politburo for “mismanagement” and thus became the most prominent victim of the government’s widening campaign against corruption.

Also accused of mismanagement were a former central bank governor and a former customs chief. Although there is no indication that any of the three ex-officials are headed for trial, much less jail, the action is welcomed by foreign investors and the Vietnamese themselves. It is seen as a signal that Hanoi is serious about its pledge to end the corruption that has taken root since big-project money started pouring into Vietnam in the early 1990s.

The campaign began in May on orders of Le Kha Phieu, secretary-general of the Communist Party. The Politburo’s concerns were threefold: Corruption had tainted the party’s once-unsullied image among the Vietnamese; it was detrimental to foreign investment; and it was making society distrustful of any representative of authority, from the lowliest traffic cops to the highest party officials.

Phieu’s campaign coincided with the start of Vietnam’s biggest corruption trial. In Ho Chi Minh City, formerly Saigon, 77 businesspeople were charged in a banking and real estate fraud case involving state losses of $280 million. The judge promised no mercy even before a verdict was rendered: “Those involved should be punished harshly to serve as a warning to others.”

The court found 47 of the defendants guilty, imposing the death sentence on four and prison terms ranging from two years to life on the rest. An appeals court upheld the sentences Wednesday.

However well-intentioned the attempts to clean up the party’s image--members have been told, among other things, to hold self-criticism sessions and to stop visiting massage parlors and karaoke bars--foreign diplomats are wondering if the message isn’t as much about politics as it is about economics and ethics.

They note that the officials sacked in Hanoi were associated with reformists, most notably Premier Phan Van Khai. Last August, Loc had criticized barriers to the sale of state-owned companies, and analysts question whether his sacking and the censuring of the former central bank chief were intended as a message from Politburo conservatives that reformers should pursue their agenda with less gusto.

Foreign economists note that it is difficult for a government to come to grips with corruption until it adopts a large measure of transparency, which Vietnam has yet to do. Despite foreign correspondents’ requests, for example, no government officials were willing to discuss the campaign against corruption, the vigorous battle Hanoi is waging against drugs (22,000 drug arrests last year) or the campaign to improve road safety (7,000 annual highway deaths).

Even the director of tourism has rejected a foreign reporter’s request to talk about a government campaign that increased the number of visitors in 1999 nearly 12%, to 1.7 million.

Vietnam’s problems are not unique. Corruption long has been widespread in Southeast Asia, particularly in Indonesia, Thailand and the Philippines. At the lower levels, it is rooted in poor pay for civil servants and underemployment. At the higher levels, it is linked to foreign companies’ willingness to pay bribes to secure approval for projects or sales--a practice that is against the law for U.S. companies that do business abroad.

Only one country in the region, Singapore, is virtually corruption-free--at least in part because a high standard of living reduces temptation. Singapore pays its judges up to $120,000 a year, civil servants earn salaries comparable to what they would get in the private sector, and annual per capita income in the city-state has reached $27,000.