Vietnam vice minister apologizes to Japan for “$2 Billion loan” gaffe

[mike2000]

I know exactly what you've been saying. My question is: did *you* read the 2nd paragraph in my response that you quoted? It galls our more delusional Viet friends if non-Viets tell them they should be grateful. And that makes me smile.

Read the 2nd paragraph that I wrote - I understand that foreign "aid" always comes with strings and isn't out of the goodness of someone's heart. It's not a difficult concept to grasp. At the same time, is it the fault of foreign investors if the host nation is a veritable dung heap of corruption, inefficiency, and incompetence? It's always easy to point fingers at fast food places for making someone fat but it's harder to admit that you should have put down the fork 3 burgers ago. Does that make sense?

lool yes i know, Some vietnamese mebers here like Nice guy have indeed made some not so appropriate statements/comments on here(like wanting to unify sub mekong region under Vietnam.lol). But i do like Nice guy though he makes me laugh/has a good humor and most of all his way of saying things/commenting while eating pop corn. I dont know why but i like his way of speaking, even though i dont always agree with so eof his point of view, but they are indeed funny and keeps me happy/smiling.

Just like soem of the points he made on here i.e: ' Then u should forget ur loan, coz u never get it back. Our greedy Govt. even ask for more 2 billion loan from u and Im sure they will find all ways to take the 'loan' from ur Govt coz they r so greedy.' he is right on this one though.

another one: 'playing dirty trick to our corrupted Govt. is very dangerous game coz they r very greedy, if JP stop sending ODA to make them get richer, they may support Russia to make more trouble to u in Northern territories until u cant bear anymore and have to send ODA to VN again.'

This one killed me man, it was soo hilarious, a master piece to be honest. Japan better watch its back.
To be nice guy is the coolest guy on here, i like his way of saying things.

 

[mike2000]

Yes, our debt is nearly reached 65 % of GDP, so we have to stop to borrow more from JICA, ADB or IMF.

I already told you people on here. This is a game our governemnts in the west/U.S invented and we have perfected them over decades and decades with other African and Latin american countries(though the later learned their lessons and broke free from this .). So we are masters in this loan slavery/exploitation system, while still demanding for Thank you/Gratitude in return. Japan seems to have learned from us quite well. Hats off. Expect to see more Loans coming your way, the more corrupt your government proves itself to be the more Loans we will feed you with till you are addicted.

 

[Rechoice]

Insight: Debt risks lurk in Vietnam's unreformed state giants

BY STUART GRUDGINGS
HANOI Fri Aug 24, 2012 3:07am IST


(Reuters) - From the rural heartlands to traffic-choked cities, Vietnam Electricity Group is hard to miss. It builds apartments, runs a bank, oversees a stock brokerage, provides electrical power to millions of homes and employs 100,000 people.

Today, Vietnam's sole retail power supplier, known as EVN, looks badly overextended, according to a senior industry official with knowledge of its business. It is the latest state behemoth to face scrutiny in the wake of debt blowouts that have shaken investor confidence and symbolized the decline of a country once tipped as Southeast Asia's next economic star.

Some fear that the debt problem at EVN could dwarf that at shipbuilder Vinashin, whose default on a $600 million loan damaged Vietnam's reputation among foreign investors, although the monopoly has garnered far less international attention.

"I can tell you that its debt is far worse than Vinashin, maybe hundreds of trillions dong," said the industry official with first-hand knowledge of EVN's debts who asked not to be identified.

The arrest this week of high-profile tycoon Nguyen Duc Kien, the multi-millionaire founder of Vietnam's fourth-most valuable bank, Asia Commercial Joint Stock Bank (ACB), adds to deepening fears of financial malaise in the Communist-run country of around 90 million people.

His detention inflamed worries about a sector strained by ties to debt-laden state companies, including many like EVN that have strayed well beyond core businesses as policymakers sought to build world-beating conglomerates in the mould of South Korea's "chaebol".

The central bank was forced to make a rare public assurance that funds in ACB were safe as depositors queued up to withdraw their money, while Vietnam's main stock index has fallen around 9 percent this week.

The near-collapse of Vinashin in 2010 and deep troubles at shipping line Vinalines this year, with combined debts of $6.5 billion, prompted a government vow to redouble reforms of state firms, which take up a third of the economy and crowd out private investment.

But the latest proposals announced in July appear to fall short of tackling the cronyism and muddled priorities that have allowed the 100 largest state-owned enterprises (SOEs) to run up debts of $50 billion - equal to nearly half Vietnam's annual economic output in 2010.

The problems, say bankers and industry experts, extend well beyond Vinashin and Vinalines.

"They are the tip of the iceberg," said David Koh, a Vietnam expert at the Institute of Southeast Asian Studies in Singapore.

A failure at EVN, for example, could have a far bigger impact on the overall economy by disrupting the cheap energy supply that is the lifeblood of the its manufacturing sector.

A report in the Saigon Times in May citing a State Audit body document said that EVN had debts of 240 trillion dong ($11.5 billion) at the end of 2010, nearly three times that of Vinashin at the same time.

The Tuoi Tre newspaper reported in December that EVN had losses from production of 8.4 trillion dong, more than 12 times the amount reported by EVN itself, according to the same report.

 

[mike2000]

Im really sad to see this exploitation system that has persisted and is still thriving for decades now. Unlike what some members here might think, I am not trying to suggest that donor countries hold sole responsibility for all of poor developing countries problems, but that they certainly should be held accountable for and address those for which they are responsible and can do something about.I did mentioned corruption. It is of course an issue. However we have to put it into perspective, for example in terms of the $35.5bn that Afrca loses each year in illicit financial flows, it accounts for only 3%. 60-65% is a result of commercial tax evasion. In Nigeria as another example, i red a few years ago that not only are small domestic elites profiting, over three-quarters of IFFs in oil from Nigeria in 2010 benefited just five countries: US, Spain, Frace, Japan and Germany. Most frequently IFFs are destined for Europe, the US, Canada, Japan and South Korea.

So i did mention the facilitation of corruption by secrecy and lack of accountability of the tax haven structure our governments in the rich world have created. African/Vietnamese and other poor countries citizens of course need to hold their leaders to account but those countries that contribute to these poor countries poverty need to be held accountable and their own accounts of how the we can 'help', must also be challenged. So i'm challenging the response to much of the aid narrative(of some members here like Nihonji and some few chinese members)which positions wealthy countries as generous benefactors to ‘poor’ countries. I have seen/heard many people here in Brtain itself (some of my firends included.lol) presenting the UK as the ‘generous benefactor’ which gives out the largest % of its GDP to aid than any other european country. lool So we are hailed as a model/angel. I just when i hear ill informed people make such silly/naive comments. Without knowing the game that is being played out. The devil resides in the details.

 

[William Hung]

The point of the matter is that Vietnamese Engineers , since Can Tho, have been required to abide by Japanese recommendations in regards to projects. The unfortunate instance in Can Tho could have been prevented had the Vietnamese Engineers heeded Japanese recommendations , which they outright failed to implement in regards to scaffolding requirements, and improper calculation of specified variables.

You're beating around the bush again. Who appointed those vietnamese engineers and subcontractors? Who was supervising the whole project? It just makes it worse if a Japanese consultant knew something was wrong but no action were taken.

But in the spirit of responsibility and understanding, Japan absorbed full responsibility (economic, legal).

OK. "Spirit of Responsibility and Understanding." Is that the new motto of Japanese corporation? lol

Anyways, one bad incident should not be used as judge, afterall, over 1,900 Japanese-led / funded projects have proven successful. An incident in 1 out of 1900 is not that bad. Meta-analytically speaking, of course.

This is not a one-off incident. In terms of corruption and colluding with corrupted Viet officials, there are many cases where company officials get caught for giving bribe to get a ODA project signed. Here is one in 2008:

AmCham Vietnam | Vietnam police launch probe in Japan ODA corruption case: state media

Police in Vietnam have now launched a probe into PCI’s claims against Huynh Ngoc Sy, the Ho Chi Minh City senior transport official named in the Tokyo trial, who was suspended from his post last month, state media reported.

Japan’s Yomiuri Shimbun daily newspaper in November reported that four former PCI executives had admitted paying 820,000 dollars in bribes to Sy.


Sy was deputy director of the Ho Chi Minh City transport department and oversaw the East-West Highway Project, the city’s largest infrastructure development with 22 kilometres (14 miles) of roads and tunnels.

The ambassador of Japan, the largest bilateral donor to Vietnam, said official development assistance (ODA) loans would be frozen until Vietnam took “effective and meaningful measures against corruption.”

Notice the strong words from the Japanese ambassador about corruption. Cheap talk. It happened again in 2014:

English - VietNamNet News

The alleged graft was uncovered when Japan’s Yomiuri Shimbun newspaper reported in March that Tamio Kakinuma, president of JTC, had admitted accusations that the firm paid ¥80 million (over $785,000) in bribes in return for an ODA project order worth ¥4.2 billion (over $41.2 million) in Vietnam.

The newspaper also said JTC allegedly bribed civil servants in Vietnam, Indonesia, and Uzbekistan with ¥130 million (over $1.27 million) from February 2008 to February of this year in order to receive orders for five Japanese ODA-funded projects in these countries.

Notice the allegation that bribes was also used from 2008-2014 in Indonesia and Uzbekistan. Where are the flowery words from JICA now?

Like I said, Japanese ODA mechanism is flawed and produce an excellent environment for corruption to flourish.

- Local govt and JICA discusses and evaluate a potential project (the public has no say, the media can only complain against the project but nothing else)

- If both the local govt and JICA agrees to go ahead with the project, then JICA (not an independent Vietnamese local govt agency) will issue a tender for contractors to bid.

- Only Japanese companies can make a bid. Moreover, only Japanese companies that has met certain conditions can bid. JICA oversee this process and make sure only "qualified" companies has made a bid.

@Nihonjin1051 can paste all the flowery words about JICA. But the truth is these "tenders" are a sham. Bid-rigging is rampant:

http://www.nindja.org/modules/news/article.php?storyid=2

Bid-rigging in ODA projects is running rampant, with more than 80 percent of the successful bids for 71 construction projects coming within 1 percent of the estimated costs, an investigation by The Yomiuri Shimbun has showed.

The problem of fixed bids for projects funded by nonrefundable official development assistance grants is a continuing one, according to general contractor employees.

Domestically, a government crackdown has resulted in a decline in the successful bidding ratio--the percentage of successful bid prices to initial estimates. But the ratio remained high for ODA projects, even as recently as fiscal 2004.

Last year, the Finance Ministry demanded that construction firms correct their bidding methods. However, evidence has surfaced that the directive has gone unheeded...

Employees of several general contractors well versed in ODA bids said, in order to win contracts at the highest possible prices, the bidders agreed in advance to rig the bidding process by offering prices higher than the initial estimates so predetermined construction firms could be selected for the contracts.

The whole process is a scam. From the initial evaluation with the local govt to the "tender" for contractors, plenty of spaces are left open for backroom deals. These are just recent corruption examples from 2000 onwards. I dont even want to talk about worse corruption cases with Japanese ODA and it's dealing with the Indonesian Suharto, Filipino Marcos and probably worse of all, during the early years with PRC.

The question is, why do the Japanese govt keep these ODA mechanism running which allows corruption to take place right up to 2014? If I was @NiceGuy, I have every right to be mad because it is his tax money (and his children) that the corrupted local officials and JICA is playing with.

Finally, these kind of ODA, as argued by other members, only encourages and keep corrupted officials in power, instead of forcing them to make an improvement on effective governance. It is bad for the recipient countries.

 

[NiceGuy]

I don't think that there is a reason for that we will not pay back such debt. there is unexpected accident. it should been happent every where in the world on construction project sites, like corruption, the Japanese consultant company has paid borbey momey for corrupted officials in many countries, not to Vietnamese only.

Economically, I think ODA Loan is benefited for us, with low interest rate ( about 1 % or little more or less ) and grace lending time (20 - 25 year no interest ) it has a big advantage in comparison with the government bond issuance on international finance market.

I have been worked in short time for one project in Hanoi, as sub-contractor. I would like to repeat here the answer of one PMU director he told to me that: " when you r donor a loan to your relatives in rural area 100 million VND, after 25 year they will pay back you at sight 100 million VND. Who is a loser in this business ".

Ok, for relax ........ how about your daily trading on stock market recently ? thks for god, I won.

No, ODA only bring benefit to the corrupted officials and dirty loanshark (JP Govt). ODA means u have to buy low quality JP products wt high price. For example: A JP car cost 10.000 USD , but when u buy it wt ODA, u will have to buy it wt 14,000 USD. If they only give u $10,000 , it means u only can buy a low quality car wt real price is $ 6,000

Many ODA project must cut 40 % to the board of management (dont know how many % the JP contractors got). So, who got the benefit here ??

 

[NiceGuy]

A for the some Chinese members here like Agent Orange(again a weird name.lol), it seems the hate you have for Vietnam is even greater than the hate you have for Japan. To see a chinese choose a Japanese side against Vietnam is indeed something new i have yet to see in Asia to be honest. Anyway, you have to try and be practicial/un biased in your views bro, afterall we are on a discussion forum. You dont always have to bash/insult other rival countries members(in this case vIetnam) just because you had some beef with him.them previously.You can still not like someone/a country. But still make credible/factual comments on a case involving them, even if that point/case is positive towards the, Dont let your hate blind you bros. After all we are all just common civilians, not politicians, so we cant change/influence our government foreign policies anyway. So why not be friends and exchange points of view respectfully while agreeing to disagree? Im happy to see your other Chinese members here at least made some constructivfactual econtribution on this thread/topic, instead of indulging in anti- Vietnam bashing. I dont even understand why you people are so obssessed with a small/poor developing country like Vietnam. You should be focusing your attention on Japan and the U.S who are your real rivals now and in future(more like the U.S lol).

China sided wt JP in 1978 to stop VN expansion to Thailand. That no thing news when Chinese member here side wt JPese to bash VNese again.

To China, strong VN is simply far worse than strong JP.

 

[cnleio]

No, ODA only bring benefit to the corrupted officials and dirty loanshark (JP Govt). ODA means u have to buy low quality JP products wt high price. For example: A JP car cost 10.000 USD , but when u buy it wt ODA, u will have to buy it wt 14,000 USD. If they only give u $10,000 , it means u only can buy a low quality car wt real price is $ 6,000

Many ODA project must cut 40 % to the board of management (dont know how many % the JP contractors got). So, who got the benefit here ??

Sure, ODA == loans with low interest ... besides original price u also need pay the interest. There's no free lunch, man.

For example u used the ODA to buy a 10,000 USD car, u will pay more 1,000+ USD for the interest, total near 12,000 USD. When Japan government told ur Vietnam their ODA is free or without any interests here ?

 

[NiceGuy]

As I said, gratitude is a foreign concept to Vietnamese people. They even blame "Japanese loans" for their inferior and incompetent Viet trained engineers that led to their own deaths. But NiceGuy will still continue to use Japanese built infrastructure in Vietnam. And he'll drive a Japanese car donated by the Japanese government while he crosses the Japanese funded bridge. The entire time he'll be ranting about how "dirty" the Japanese are. Come to think of it, irony is a foreign concept to Vietnamese people as well.

Obviously Japan is contributing aid to Vietnam in the hopes of economic benefit and it's not an altruistic venture. Japan contributes development loans in the hopes of gaining greater influence as well as make some money in return. But what's mind boggling is that people are accusing the donors of attempting to subvert their country? Rather than have such a hostile attitude towards foreign loans, perhaps these people should do a bit of self reflection and ascertain why Vietnam is so corrupt and pathetic that they can't leverage this infusion of foreign capital for greater industrialization like certain other countries can?

It just like u guys dont like Xi's family or NK dont like Kim's family, but u guys still have to listen to them, u guys have no choice to sack them. I have no choice but keep using JP low quality high way those it very risky.

At least, in VN, we have the right to criticize our Govt., our leaders and we can request them to resign if they got more than 50 % of low confident vote in 2 term. In China and NK, u guys dont even have that right

 

[AgentOrange]

It just like u guys dont like Xi's family or NK dont like Kim's family, but u guys still have to listen to them, u guys have no choice to sack them. I have no choice but keep using JP low quality high way those it very risky.

At least, in VN, we have the right to criticize our Govt., our leaders and we can request them to resign if they got more than 50 % of low confident vote in 2 term. In China and NK, u guys dont even have that right

A quick google search reveals that Viet government critics are routinely arrested and tortured. Why even bother lying about something like that?

It's hilarious that you accuse the Japanese engineered highway as being low quality. But no matter what, I'd much rather drive on a Japanese highway than a Viet dirt path.

 

[NiceGuy]

Sure, ODA == loans with low interest ... besides original price u also need pay the interest. There's no free lunch, man.

For example u used the ODA to buy a 10,000 USD car, u will pay more 1,000+ USD for the interest, total near 12,000 USD. When Japan government told ur Vietnam their ODA is free or without any interests here ?

Its normally a low interest loan (0,2-0,3 % /year). But it will be cut from 20-40 % to the board of management ( and JP contractors) due to corruption.

For example: they built a low quality house like below picture wt high price (80,000 USD funded by ODA) when it only cost abt 50,000 or even lower

Xã nghèo bị 'xẻo' 40% vốn ODA xây trường, làm đường - VietNamNet

Why I can not see the picture on my post ??

 

[NiceGuy]

A quick google search reveals that Viet government critics are routinely arrested and tortured. Why even bother lying about something like that?

It's hilarious that you accuse the Japanese engineered highway as being low quality. But no matter what, I'd much rather drive on a Japanese highway than a Viet dirt path.

Bcz they r pro-US , and they did some action when I have no action. We even have a forum to criticize the Govt. like Hoangsa.org

Bcz of the corruption, so JP contractors only build low quality roads, bridge for VN, thats why many of them have serious problem or collapse

 

[cnleio]

Its normally a low interest loan (0,2-0,3 % /year). But it will be cut from 20-40 % to the board of management ( and JP contractors) due to corruption.

For example: thay built a low quality how like below picture wt high price (80,000 USD funded by ODA) when it only cost abt 50,000 or even lower

LOL ... u must be kidding me, that low building cost 80,000 USD ?! 80,000 USD = 500,000 RMB im sure there can build a Three Floors building in China.

Such low-efficient building, u should thanks ur Vientam official ... Man, this is economy waste.

 

[AgentOrange]

Bcz they r pro-US , and they did some action when I have no action. We even have a forum to criticize the Govt. like Hoangsa.org

Bcz of the corruption, so JP contractors only build low quality roads, bridge for VN, thats why many of them have serious problem or collapse

You're blaming Japan for your own failings. It's Viet corruption that leads to corrupt and incompetent Viet engineers that lead to crappy roads. The common theme here is that all the culprits are Viets. Stop blaming other people for your own problems.

 

[William Hung]

No, ODA only bring benefit to the corrupted officials and dirty loanshark (JP Govt). ODA means u have to buy low quality JP products wt high price. For example: A JP car cost 10.000 USD , but when u buy it wt ODA, u will have to buy it wt 14,000 USD. If they only give u $10,000 , it means u only can buy a low quality car wt real price is $ 6,000

Many ODA project must cut 40 % to the board of management (dont know how many % the JP contractors got). So, who got the benefit here ??

I agree. Maybe you can post pics of that Mai Dich-Trung Hoa highway that was funded by Japanese ODA.

Both leftists and a lot of right wing economists also agree with your view point because this Japanese style ODA goes against the idea of fair competitions.

You are not guaranteed the best value for your money. The "tenders" issued by the Japanese side is quite dirty in a lot of cases. They decide who wins the contract and the corrupt local officials just need to approve. It is not a real transparent public tender. Contractors can easily rip you off.

Sure, ODA == loans with low interest ... besides original price u also need pay the interest. There's no free lunch, man.

For example u used the ODA to buy a 10,000 USD car, u will pay more 1,000+ USD for the interest, total near 12,000 USD. When Japan government told ur Vietnam their ODA is free or without any interests here ?

It is a lot worse than just paying it back with small interest:

- It encourages the officials to be complacent instead of getting their @ss together and improve their country. ODA and "Aid" is like the new opium given to local govt to make them complacent, just like how it was used during the Asian colonial days.

- Vietnamese civilians are not getting the highest value for their money. The Japanese conditions placed on their ODA are very tricky and allows companies to bribe. It is not a true public tender. Check out the Mai Dich-Trung Hoa high way to see how bad the Vietnamese people can get ripped off.

- These kind of bad project will cost the Vietnamese more in the long run, when they have to repair, restructure them, etc.

- Not all Japanese ODA projects are this bad, but the VietNamese people are not guaranteed the best value for their money because there aren't any real transparent tender issued. This is always bad!