About 29% of foreign-invested enterprises (FIEs
) admit that they paid bribes when attempting to acquire their investment licenses and 35% paid bribes when competing for government contracts, according to the Provincial Competitiveness Index (PCI
) 2015 survey.
Up to 89% firms responded that they were disadvantaged in the selection process if they refused to pay a bribe during procurement, says the report. Among them, 29% always paid bribes, 32% usually and 28% sometimes.
“This sizable result indicates that a culture of commissions in contracting may be impeding the best selection of service providers, leading to higher costs and worse quality,” the report noted.
The surveys adds that corruption also appears to be demonstrably higher in 2014 for FIEs when it comes to customs procedures, administrative and market regulations and contractual disputes.
FIEs Find Vietnam A Relatively Safe Place
According to the survey, most existing investors in Vietnam find it to be a relatively safe place. Around 60% believe Vietnam is less risky than competitor countries and an additional 30% believe it is about the same. Only 5% of investors believe Vietnam is more risky this year.
By country of origin, FIEs from China, Thailand, and the U.S. have come to perceive Vietnam as much less risky over time. By contrast, investors from Germany perceive relative risk to be increasing slightly. Other countries, like most of the neighboring Asian investors, have more consistent views over time.
Macro Instability as Primary Risk Perceived by Foreign investors
As many as 49% of foreign investors consider macroeconomic instability to be the primary risk they face in Vietnam.
Meanwhile, 39%, 40%, and 46% of foreign investors consider contract, labor, and corruption risks to be among the top three, respectively. However, only 9%, 6%, and 9% think one of those issues was the actual primary risk, respectively.
The survey covers the responses of 1,584 businesses from 43 different countries whose operations are located in the 14 Vietnamese provinces with the highest concentrations of FIEs, according to the General Statistical Office (GSO).