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Systematic Corruption ruptures Vietnam with inequality

Since the mid-1980s, the time when Vietnam launched the ‘Doi Moi (industrialization)’ project to boost the national economy, Vietnam has recorded remarkable GDP increase rate, 7 to 8% a year. However, the economic inequality gap and government debts are huge, and show no sign of shrinking.

Primary reasons for the problems lie in the structure of the ‘industrialization’. The only legal political party, the Vietnam Communist Party, utilized state owned enterprises(SOE) as useful tools which enable the government to take a firm grip on the state economy. In a rare thesis discussing the privatization of the Vietnamese economy, Fredrik Sjöholm pointed out that it’s actually a state takeover of economy in disguise of ‘privatization’; about one-quarter of state revenues come from SOEs and the state can take control of any SOEs by having ‘minority state ownership share’(Sjöholm, 2006)

Commonplace collusion between politics and economy, interwoven through shares, squandered bailout money and venal practices in the name of ‘industrialization’, generated astounding breeding ground for corruption and rapidly increasing debts. The ‘industrialization’ process had few constructive plans behind it, which produced obfuscated ownership responsibility while working on ad hoc economic strategies. This opened the door for private, often political, actors to ‘hijack’ the real control of the firms.