Rethinking aid and corruption in Analysts say major graft allegations stemming from a Japanese aid project warrant a reconsideration of aid’s role in international relations and a deeper rooting-out of corruption  The In a show of assuring the public about its resolve to tackle rampant graft, A deputy transport minister almost immediately led a delegation to Japan last month only to learn that agencies concerned there would not be able to reveal any further information other than what the Japanese media had already reported: The president of Japan Transportation Consultants (JTC) admitted that his company had paid bribes of 130 million yen (US$1.3 million) to civil servants in Vietnam, Indonesia and Uzbekistan between February 2008 and February this year to win work tied to projects funded by Japanese official development assistance (ODA). An official or officials at Vietnam Railways, the state-owned operator of the railway system in the country, allegedly received 80 million yen ($782,000) for a Japan-funded ODA project totaling 4.2 billion-yen. Apparently, the specter of a similar scandal in 2008 that galvanized Japan into suspending aid to Vietnam still looms large, sowing worries that Tokyo, Hanoi's largest ODA donor, may do so again this time. While analysts have sought to assuage such fears, they also say the bottom line is that in a country where corruption is rife in public infrastructure projects, “ Since 1993, international donors have pledged an estimated amount of $58.4 billion worth of ODA to But a very small part of it is non-refundable. Most of it are loans with interest rates which are not as preferential as assumed. Interest rates and loan fees increase if disbursement is delayed and the use of loans is ineffective. Two thirds of the international aid has been earmarked for infrastructure projects where the bidding process and equipment purchase has long been considered fertile ground for graft and corruption. The 2013 Corruption Perceptions Index, which measures the perceived levels of public sector corruption, sees Given the status quo, analysts say at the end of the day ODA is a financial burden that Vietnamese younger generations will have to shoulder. “It is the bane of their future,” Thanh said. ‘Important aid partner’ As a country seeking to be a good international citizen and be recognized as a major power, 2015 will mark the target date for the UN’s Millennium Development Goals (MDGs) – a set of targets for education, poverty, health and other areas – and all donors have tried to claim their economic aid has been effective toward accomplishing the MDGs. In the context of With corruption, such as the most recent bribery case, risking prompting skepticism among the Japanese people of the benefits of economic assistance to Vietnam, the Japanese government may have to respond by scaling back ODA to regain the trust of its people. But “it is unlikely Japan will suspend aid in any serious form or length of time given that Vietnam is one of its most important aid partners and models of success,” Edward Feasel, an expert at Soka University of America who has studied Japanese ODA to Vietnam, told Vietweek. In 2008, Huynh Ngoc Si, former deputy director of the Many of “ “They support port construction for trade, they often link ODA to contracts to Japanese firms or consultancies, or the purchase of Japanese machinery and equipment,” he said. “It’s not that this is unusual, but no one does it to the degree that the Japanese do.” Who benefits who? During a meeting on the sidelines of the Nuclear Security Summit in the “If the allegations are true, [the two sides] need to immediately draw lessons from that,” Nguyen Van Nen, Minister and Chairman of the Government Office, told the media this week. But analysts say the bottom line is that instead of focusing on the actors, The issue is to implement practices that reduce corruption in all government projects. The next step – but one that only works after corruption is minimized – is to evaluate very carefully whether a project, ODA or not, is the best deal for the country. The analysts raise an important question: Would Vietnam be better off without foreign aid and Japanese ODA in particular? “Whatever the inequities in “But it should be noted that when I use the term ‘Japan’ and ‘Vietnam’ I’m mainly including not only the people who benefit from the aid, but the groups of elites who provide and monitor the delivery of aid.” |
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