A series of scandals pose a legitimacy problem for Vietnam’s established regime

BANGKOK — A scandal engulfing Vietnam’s foreign ministry and a range of other public and private entities is putting Hanoi’s reliability on the map as the linchpin of an expected US-led Asian economic framework and a bulwark in the international fight to tame the COVID-19 pandemic Sample.

In recent weeks, officials from the foreign ministry, tourism, aviation, medicine and industry have been arrested and expelled from the ruling Communist Party. They are accused of raking in $240 million by tricking frightened Vietnamese citizens into paying excessive fees for government-mandated COVID-19 repatriation flights and cumbersome permits, and price-fixing emergency medical supplies and equipment to have.

The scandal and regime crackdown have given a black eye to a country that has been promoting itself as a model of clean government and economic efficiency, and an alternative to China for international investors. It can also prove divisive at home.

The controversy has also called into question the effectiveness of Communist Party Secretary General Nguyen Phu Trong’s “Blazing Furnace” campaign against corruption, launched in 2016.

“The anti-corruption campaign is causing increasing uncertainty and concern among the population [Vietnamese Communist Party] Base,” said Carlyle Thayer, Professor Emeritus at New South Wales University of the Australian Defense Force Academy. “The steering committees for each of Vietnam’s 68 administrative units are expected to be more proactive in eradicating economic corruption.”

The controversy “raises the possibility of factional struggles at the national and local levels,” Mr Thayer said in an interview. He returned from Vietnam last month.

Vietnam is a founding member of the Biden administration’s US Indo-Pacific Economic Framework, which President Biden launched in May to address trade, investment, supply chain integration, good governance and deeper ties between the US and more than a dozen Asian countries promote countries. The proposal was also widely viewed as an alternative to China’s encroachment into the region.

Many in Vietnam also saw Hanoi’s participation as a tool to push through domestic reforms, but the scandal dashed those plans. Vietnam’s other international partners are also concerned.

“The scandals are definitely damaging Vietnam’s image with governments, financial and development institutions and the private sector,” said Bangkok-based Kasit Piromya, board member of the ASEAN parliamentarians for human rights. “It also undermines the reputation of the [Communist Party of Vietnam].”

ASEAN is the regional bloc of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

“The US and other investors and trading partners of Vietnam need to be more resolute in governance [and] Anti-corruption measures and the rule of law,” said Mr Kasit, who was Thailand’s foreign minister from 2008 to 2011.

Mr. Biden presented the Indo-Pacific Economic Framework at a meeting of representatives from Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam on May 23. Among the “key pillars” of the framework, according to the White House, is the “criminalization of bribery under UN standards … to enhance our efforts to fight corruption.”

Mr Trong, 77, won re-election in early 2021 to a five-year term – his third – largely on the basis of a tough anti-corruption platform.

“This fight against corruption is still very tough,” Mr. Trong said at the time.

COVID-19 testing controversy

When COVID-19 first swept Southeast Asia in 2020, Vietnam was lauded for efficiently controlling the spread of the coronavirus with mass testing, strict lockdown measures and expedited medical treatment. In 2021, however, Vietnam’s “demand for medical devices has skyrocketed, leading to more opportunities for corruption,” said Global Compliance News, a platform moderated by international law firm Baker McKenzie.

As the country’s COVID-19 cases surged from 1,500 in 2020 to 10 million in the first few months of 2022, with 43,000 deaths, testing kits suddenly became unusually expensive. The government’s crackdown on the Blazing Furnace eventually arrested more than 60 officials accused of price-fixing, including in the State and Health Departments.

Officials were also arrested at the Ministry of Science and Technology, the Military Medical Academy, the state-run Viet A Technologies, the Centers for Disease Control and Prevention in Hanoi and local health authorities.

Hanoi CDC director Truong Quang Viet was arrested on June 10 for “violating tendering rules with serious consequences” and overpricing COVID-19 test kits, police told Vietnam’s Tuoi Tre News agency.

“Several officials – including senior military generals and directors of provincial branches of the [Hanoi] Center for Disease Control – have been arrested or prosecuted for their involvement in the case,” VnExpress reported.

Mr Viet’s predecessor, Nguyen Nhat Cam, was sentenced to 10 years in prison in 2020 for similar corruption related to COVID-19 testing equipment, costing the government $233,000.

Vice President Kamala Harris opened a US CDC Southeast Asia regional office in Hanoi in August 2021, in part to work with the Vietnamese Health Authority. There was no public evidence or allegations of corruption involving the US Regional Office or American citizens.

Bribes reportedly prompted Vietnamese health officials to ship overpriced COVID-19 testing kits to Hanoi’s CDC and several hospitals.

In January, Phan Quoc Viet, general manager of Viet A, which made the swab kits, admitted to paying $35 million in bribes to health and hospital officials, VnExpress reported.

“In April 2020, the company received a license to distribute COVID-19 test kits from the Ministry of Health,” reported Vietnam News. “It has been delivering the test kits ever since [Vietnam’s] Centers for Disease Control and other medical institutions in 62 provinces and cities across the country.”

Various officials are accused of reselling the kits for public use for $20, a 45% increase over their normal price, and raking in millions of dollars in illicit profits.

Meanwhile, Viet A’s PCR kits have been hailed as a successful joint venture with the Military Academy of Medicine, and the company has received a government award for its entrepreneurial spirit.

The suspicion arose after the World Health Organization said Viet A’s kits were “not eligible for WHO procurement”. This conflicted with an April 2020 depiction by the Science and Technology Department that the WHO had approved the kits. The Viet-A director said nearly a dozen countries want to buy them.

Investigators said Viet A claimed it manufactured at least 3 million rapid test kits locally in 2021, but the kits are actually cheap imports from China.

In June, officials expelled Health Minister Nguyen Thanh Long and Hanoi Communist Party leader Chu Ngoc Anh from the party, accusing them of corruption.

The two were accused of violating party and government regulations, “causing serious consequences, damaging state money and assets, undermining the COVID-19 fight, causing social unrest and damaging the reputation of the party, the health ministry and the science ministry.” , according to the Hanoi Politburo and Secretariat.

More corruption cases were to follow. In April, the Ministry of Public Security arrested Deputy Foreign Minister To Anh Dung and two others in connection with exorbitantly expensive air tickets for emergency repatriation flights. Vietnam has flown home more than 200,000 citizens from more than 60 countries and territories.

Mr Dung, 58, arranged airline tickets for Vietnamese, including poor migrant workers who lost jobs abroad as a result of the pandemic’s economic devastation. Others had to fly back to Vietnam to help affected relatives.

In May, the former deputy foreign secretary was sentenced to four years in prison for selling counterfeit medicines.

In March, security officers arrested Nguyen Dieu Mo, general manager of An Binh Air Services and Tourism Trading Co., on charges of paying bribes for favors.

Some foreign ministry consular officials have been arrested on charges of “gaining personal gain” by passing bribes to licensing companies for arranging repatriation flights, the public security ministry said.

The Communist Party Central Committee said in May that anti-corruption steering committees would be set up in all provinces to root out illegal activities at the local level.

Concerns over corruption have raised questions about the regime’s stability, which has remained largely unchallenged in the decades since the end of the Vietnam War.

The Blazing Furnace operation, now in its sixth year, “has failed to deter wrongdoing,” reporter Nate Fischler recently wrote in the Asia Times. “Widespread institutional corruption, which comes under particular scrutiny during the peak of the pandemic, remains the most serious existential threat to [Vietnamese Communist Party] rule and legitimacy in the country.”