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Bribery pervades business world

Update: November, 22/2012 - 11:04

HA NOI (VNS)— Small- and medium-sized enterprises continue to face pressures to pay bribes "to get things done", according to a survey of 2,500 private enterprises conducted in ten provinces last year.

With findings published in a report entitled "Characteristics of the Vietnamese Business Environment: Evidence from a SME Survey in 2011", the survey was conducted by the Viet Nam Central Institute of Economic Management and the World Institute for Development Economics Research.

The survey found that 38 per cent of firms reported making so-called "informal payments" in 2011, up from 34 per cent in 2009. The payments were mainly to deal with tax collectors (30 per cent) and to gain access to needed public services (26 per cent).

Professor John Rand of the University of Copenhagen said informality and taxation were closely related to bribery and corruption and were a prominent part of the local business climate.

But bribe payments would not keep small businesses alive in the long run, and the data suggested that firms paying bribes were likelier to exit the market, Rand said.

The report said that small- and medium-sized enterprises (SMEs) were 5 to 10 per cent less likely to exit the market than their micro counterparts. Basing on these findings, Viet Nam needed policies tailored to the characteristics of enterprises of different sizes, Viet Nam Chamber of Commerce and Industry's general secretary Pham Thi Thu Hang said.

The report also said that policies to facilitate the access of SMEs to credit needed to be made more efficient as nearly 39 per cent of surveyed enterprises encountered difficulties accessing bank loans and had to seek financing from informal sources.

Policies were also needed to boost labour productivity, said the report, noting that 40 per cent of surveyed firms reported lower labour productivity growth in 2011. — VNS

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