Vietnam 2012: Safe to get back in the water yet?


28 oct. 2013 (il y a 5 années et 4 mois)

93 vue(s)

Vietnam 2012: Safe to get back
in the water yet?

Presentation to EUROCHAM lunch group

September 19, 2012

Hanoi, Vietnam

Adam McCarty

The Brief

How damaging is corruption and is the Party
serious about stopping it?

How can banking consolidation be undertaken?

What is behind the ACB scare?

The problems in the State Sector and how can it be

Recession in Europe and the States: impacts on

Will EU FTA have any effect?

What are other priorities the government should
focus on in 2012?


A minimisation problem (level => opportunities,
norms, chance to be caught, penalties)

Corruption perceptions: a weak proxy for corruption
prevalence (VN 112/182).

Visible anti
corruption = f(political infighting)

Important to distinguish between “high level” and
“household level”

High level: endemic and uncertain (“not sure I get what
I pay for”); FDI signalling a secondary concern.

Household level: much less than you may assume
(transparency and accountability).

Stronger Communist Party

Party Central Committee conference
(13 August) => “self

Politburo proposed central steering
committee on anti
corruption under
themselves (along with re
Department of Interior)!

Is this “Serious”? => if it sustainably
minimises opportunities (clear and
transparent systems and public

Somebody is serious:

“Initially, we believed that some problems were not so
difficult to solve theoretically. However, in reality,
these problems were much harder to solve
because of the different interests held by certain
groups that are looking to benefit from the situation.
Meanwhile, others took the opportunity to fish in
troubled waters or to put a spoke in the wheel, and
resort to other malicious acts.”

President Truong Tan Sang National Day speech
(2 September 2012)

ACB, Banks++

Arrests linked to higher
level struggles and
bank restructuring issues:

Some dubious M&A activities

Banks lack capital to buy and merge with
weak banks (and incentives)

Huge, but unclear capital injections needed

State Bank Governor, Nguyen Van Binh,
under pressure.

Securities companies also facing losses

SBS under investigation; some ceased
operations but not declared bankrupt (licence

State Sector Reform

SOE reform is just one of the same list for
10+ years

we know the problems and solutions:

product corporations stifle competition
(patronage “leaking buckets”)

Technical experts still have a weak voice on
economic policy (targets/forecasts)

Public investment planning is grossly inefficient
(no CBA, regional planning)

Inadequate universities that “push” thousands
overseas each year (at huge forex cost)

The consequence is low productivity

GDP Growth, Investment Rates, and ICOR (Selected Countries, 2007

EU/USA Recession impact?

Obviously large and negative; EU
recession inevitable, but when?

China slowdown (8.5% in 2012).

Consequences: lower world prices; slumps
in manufacturing, tourism.

EU FTA: no impact, zip.

Vietnam needs more (macroeconomic)
“wiggle room”.

Vietnam’s scope to
shocks is limited.

(my) GoV priorities for 2012

Systematic (transparent) cross
country study
of corruption and systems to control (beyond
“educating cadre”).

Close (not merge) a significant set of the
weakest banks and securities companies.

level studies to specify how to:

change VN corporations into more
Korea/Japan competitive privatised versions.

completely liberalise (“let float”) vocational
and tertiary education

Impose regional planning and quality control
upon public investment choices

Vietnam 2012: Safe to
get back in the water

Presentation to

EUROCHAM lunch group

September 19, 2012

Hanoi, Vietnam

Adam McCarty