Home ›› 29 Nov 2022 ›› Asia Biz
An anti-corruption drive in Vietnam has paralysed many routine transactions in the country, causing shortages of essential goods and dampening investor confidence in one of Asia’s fastest growing economies.
The Chinese-style campaign against graft has been under way since 2016, but a series of recent scandals have sparked new wide-ranging investigations, unnerving government officials who now fear being accused of corruption and are reluctant to greenlight procurement and investment, reports Reuters.
That chill has disrupted imports of drugs and petrol and investments in crucial energy and manufacturing projects, politicians, diplomats and executives said, in an economy that has become an increasingly important part of the global supply chain.
In the healthcare sector, about 65per cent of large hospitals have experienced shortages of drugs and medical products in recent months, mostly due to officials’ reluctance to approve procurement contracts, according to the government.
Marko Walde, head of the German chamber of commerce in Vietnam, warned the situation could worsen if licences for thousands of drugs set to expire at the end of the year were not quickly renewed by regulators.
“If you don’t do anything, you cannot do a mistake,” Walde said of the current licensing paralysis caused by the bureaucratic anxiety.
Germany is the second-largest exporter of drugs to Vietnam after France, according to 2020 data.
A European Commission document released in October about the bloc’s free trade deals lists Vietnam’s “cumbersome” rules on renewal of pharmaceuticals’ licences and their implementation among the main outstanding issues in the country.
The drug shortages include antibiotics for critically ill patients, cardiovascular drugs and medicines to treat the worst symptoms of dengue fever amid a surge of cases.
Queues are not uncommon at pharmacies in the country and one physician, who asked not to be named, said private clinics have also been affected.
Similar supply kinks affect other parts of the economy.
An executive at an industrial developer, who declined to be named, said projects involving medium-sized investors were repeatedly delayed because of missing signatures from officials.
Businesses say that could delay crucial foreign investment in a country that relies on external funding to sustain its export-oriented economy and is expected to be among the top beneficiaries of multinationals’ plans to reduce their exposure to China.
