The Communist Party has launched several campaigns against corruption. The primary problem seems to be, however, that officials expected to implement party reforms have lost much of their earlier revolutionary zeal. They now refuse to accept an ideology of frugality that requires them to struggle to feed their families on meagre wages ‘while people around them get rich’.
In Vietnam, and in the context of a socialist regime, abuse by bureaucrats and party officials has been far more blatant than in Japan. And, unlike the ‘iron triangle’ of Japan, it is difficult to argue that the form of cronyism that has developed in Vietnam has assisted the economy to grow. It has been more a situation of ‘rent seekers’ and communist party contacts draining State resources – in a similar fashion to the ‘princelings’ in China – than creation of wealth.
Given similar political and economic weaknesses in the neighbouring economies that have suffered severe downturn from the current Asian financial crisis, that of primarily a similarly weak banking system, there is considerable risk that Vietnam will also suffer from the economic fallout of the region. First and foremost the root problem of improper banking practices due to lax supervision and inadequate regulations, apparent in Vietnam’s financial sector will, if exposed to free international capital mobility, expose the economy to the similar mechanisms which have resulted in the ‘Asian meltdown’.
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