In the Year of the Snake, shed the corruption skin

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A worker at the Quang Minh Ceramics Porcelain Co. factory in Bat Trang Village in Hanoi. According to a national survey released last December, more than half of firms say that when they encounter problems from state agencies, they give gifts or money to the officials in charge.

It's that time of year again. The time when the great Vietnamese Tet tradition of celebration gets subverted by firms seeking favorable treatment by public officials. 

In a new World Bank and Government Inspectorate survey on corruption released in late 2012, the majority of firms said that they had presented gifts to public officials on the occasion of public holidays or festivals in the previous year: 44 percent of firms said they gave such gifts to the tax agency, and 20-30 percent gave to their sectoral regulators, banking and the local police. 

Giving gifts to friends and family is a Tet tradition and a sign of personal respect between Vietnamese people. But why would firms give gifts to public officials? 

Skeptics may argue that these holiday gifts are different from bribes, since they are clearly voluntary. It turns out that most bona fide bribes are also given voluntarily, albeit grudgingly, at times. 

The survey, which covered 1,058 firms in ten provinces, shows this: 44 percent of firms had given gifts or money in their latest interaction with different state bodies, and the usual suspects led the list: taxation, sectoral administrative agencies, banking, traffic police, customs, and others. And for each of these agencies, more than 75 percent of those who paid said that it was initiated by the enterprise itself. 

That does not mean that the officials who receive such gifts and payments are off the hook.  Firms and citizens alike complain that officials make difficulties for them, and they feel they must pay. But the payments are given all too readily. More than half of firms say that when they encounter problems from state agencies, they give gifts or money to the officials in charge; 63 percent of firms say that informal payments "create unspoken mechanisms to get things done quickly." And indeed, from a short-sighted perspective the bribes may seem effective.

But firms take note: those firms that were quicker to bribe have not been doing better; they are actually growing more slowly than firms that don't pay bribes.  Paying an extortionist only encourages more extortion, and making unofficial payments only feeds"”"fertilizes" might be a better word!"”the culture in which bribes are expected. 

Seeking alternatives to bribery is a better business strategy: know the procedures and follow them without seeking shortcuts; know your legal rights and demand them; work collectively to push for transparency and administrative simplification. 

The surveys show that such policies work: Provinces with the most attention to openness and transparency (according to officials) had 40 percent less bribery (according to firms); provinces with the most attention to administrative reforms had 35 percent less bribery.

Working collectively is easier said than done, but some firms are up to the challenge. In 2007, the Saigon Hi-Tech Park (SHTP) and Intel signed an MOU agreeing to do business "ethically and within the bounds of applicable law, to act against corruption, bribes, kickbacks and any forms of abuse of power for personal interests"¦" 

The SHTP, with support from the Vietnam Anticorruption Initiative (VACI), has gone on to broaden the ethics base by inviting firms to sign a voluntary pledge to behave ethically,  and by now twelve firms, half the number of occupants of the park, have signed such MOUs.

The regulation of gifts faces two problems. The law is not completely clear on which ones are illegal, and the provisions that do exist are not enforced. How big is too big? The laws provide rules for gifts that public officials or public agencies can give, but not for gifts that can be received by public officials. The absence of legal provisions governing behavior within the private sector exacerbates the problem. 

According to media reports, these gifts can be substantial. One newspaper article about Tet gift-giving went so far as to say that companies give apartments, plots of land or "long-legged women" to bosses of agencies that help those companies.

Clarifying and enforcing the rules on gifts would pay off. The survey shows that bribes by firms were 50 percent less prevalent in places that more seriously implement other rules, such as those on entitlements, norms and standards. If the rules on gifts are similarly clarified and enforced, the ambiguity on which corruption feeds will be removed.

It is far too easy to point to shortcomings in the legal framework and make excuses for waiting.  Just as the vicious circle of bribery is fed on both the demand and the supply side, the solutions can be found in both public sector reform and private sector behavior. 

Tet is a time for celebration, not for corruption. Let the Year of the Snake be the year when the snake sheds its old, corrupt skin to reveal a new skin of integrity.

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