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Background Briefing: Vietnam: Anti-Corruption Unit Begins Work Carlyle A. Thayer February 24, 2013

[client name deleted] We are currently researching Vietnam's recently appointed head of Central Internal Affairs Commission, Nguyen Ba Thanh. We request your assessment of the current state of Vietnam's government and the challenges Nguyen Ba Thanh faces in this newly created role. Here are our specific concerns: Q1. As the head of the Central Commission of Internal Affairs and therefore leader of the advisory body for the Central Steering Committee for Anti-corruption how much influence is Nguyen Ba Thanh likely to have in the fight against corruption in Vietnam? ANSWER: Nguyen Ba Thanh will not have the power to act independently on corruption cases. He reports to the umbrella Central Steering Committee for AntiCorruption headed by the party Secretary General. He also takes guidance from the party Secretariat. In the end, all recommendations made by Mr Thanh have to be approved by the Politburo. The Minister of Public Security is a member of this body. The Central Steering Committee for Anti-Corruption is a mix of individuals from the partys major factions. Their deliberations, like those of the Politburo, will be made mainly on political not legal grounds. Nguyen Ba Thanh will have the power to pursue the most complex corruption cases once these higher-level bodies have given their approval. Nguyen Ba Thanh will have wide powers to consult and work with a number of bodies including party committees in government ministries, the Central Military Party Committee, and other agencies specifically charged with dealing with corruption, such as the Ministry of Public Security. Q2. Does his role extend beyond fighting corruption? ANSWER: Traditionally, the Central Commission for Internal Affairs also looked at disciplinary cases unrelated to corruption. The revived Commission, however, has been given responsibility to implement the recently adopted Law on Corruption. This will be Nguyen Ba Thanhs major priority.

2 Q3. Mr Thanh himself has been unable to avoid accusations of corruption - in 2009/2010 he was implicated in a major corruption case in which he was accused of receiving bribes in the construction projects of Han River Bridge and North-South Street in Danang is Nguyen Ba Thanh the right person for the role as head of Vietnams Central Internal Affairs Commission? Why? Why not? ANSWER: In Vietnam the right person is not necessarily the individual with the best merit-based qualifications and experience but the person who has friends in high places. As early as 2000 Nguyen Ba Thanh came under allegations he accepted bribes in the Han River Bridge and North-South Bridge construction projects. Mr Thanh has been the subject of formal letters of denunciation (complaints by private citizens to government authorities) for taking kickbacks in urban development schemes. Even more damaging, Nguyen Ba Thanh has been mentioned in various party and government reports for his alleged corrupt activities. None of this mud has stuck. Nguyen Ba Thanh has a reputation for being something of a progressive in managing urban development and pioneering the first direct election of the chairman of the peoples committee in Da Nang. He is also a comparative outsider to Hanoi, coming from central Vietnam. What is clear is that Mr Thanh has the support of the party Secretary General and other senior party officials. Q4. What impact is corruption within the Vietnamese government having on the international perception of the country? ANSWER: In 2012, Transparency Internationals Perceptions of Corruption of Index ranked Vietnam 123rd out of 174 countries surveyed. Vietnam has consistently languished toward the bottom of the league table of corrupt countries. Corruption is a major concern of the business community and international donor agencies. They have little choice, however, but to support efforts by the party and government to improve governance and reduce corruption in the hopes these efforts might achieve some success. Despite corruption, foreign investment continues to come into Vietnam. In 2012, Vietnam experienced a 4.9% drop in foreign direct investment compared to a year earlier. The major factor was the international economic crisis. In January this year an HSBC report stated that relative to gross domestic product, Vietnam attracted the second-highest amount of foreign direct investment after Singapore in ASEAN. Q5. How concerted are Vietnams efforts to clean up its reputation as one of the most corrupt nations in the world? ANSWER: Vietnams attempt to eradicate corruption has been mixed and generally poor. It should be recalled that when Prime Minister Nguyen Tan Dung first came into office he set up the Central Steering Committee for Anti-corruption and appointed himself head. Under Dungs watch corruption grew so bad that he was almost unseated last year. Major state conglomerates and other state-owned enterprises are notoriously corrupt. The problems are that no party or state entities are truly autonomous and independent. Corruption runs through the body politic like veins. Any concerted attempt to end massive corruption across the board would

3 quickly intrude into networks of interests and patronage. The best Vietnam can do is address high profile cases and pick a few sacrificial lambs for show trials. Q6. Does the government have anything to lose from cleaning up corruption within its members? ANSWER: Prior to the tenth congress in 2006 many senior party officials publicly identified corruption as the major threat to the legitimacy of one-party rule. This remains the case today. The party has a lot to gain by trying to end everyday petty corruption that afflicts the ordinary citizen. Recent surveys reveal that half of all businessmen report that they paid bribes in order to do business. Reducing largescale corruption that damages relations with donors and negatively affects Vietnams international prestige would also result in gains for the party. The Vietnam Communist Party regularly disciplines and expels its members for corruption, disciplinary breaches etc. But an independent concerted campaign to end endemic major corruption would run the risk of destabilizing the political system. Those targeted would immediately seek the protection of higher ups in their network. Those affected would also begin to circulate counter-charges against their perceived enemies. Some of this would find its way into the media and, more likely, on blogs. In summary, if the Government began to clean up corruption it would have to amputate patronage networks that are its support base. Since the Government is divided into rival factions this would produce destabilizing in-fighting.

Suggested citation: Carlyle A. Thayer, Vietnam: Anti-Corruption Unit Begins Work, Thayer Consultancy Background Brief, February 24, 2013. Thayer Consultancy Background Briefs are archived at Scribd.com