[Vnbiz] Intel Vietnam refuses to pay bribes

AD Marshall admarshall at gmail.com
Wed Aug 15 09:29:34 PDT 2007 

Agreed, Thanh: that it can't just be government's problem and it is good to
see the media here getting away from focusing only on gov'.

But i also think another angle comes into this just as sharply: that is,
simple economics.  This is an old issue of passion of mine.  Pardon me if i
spew on a bit too much about it now.

If a cop, customs officer, tax collector or other enforcement agent is paid
to enforce rules (legislative or even unwritten ethical ones) managing
transactions that amounting to dozens of times his or her salary, and he or
she knows, too, that minor shares of those transactions are taken in taxes
that pay for his or her salary, splitting the profit, so to speak, will
almost certainly happen more than it would otherwise.  It's just sort of a
natural market correction of gaps in the artificial markets created by
laws.

And, often, even in Vietnam now, everyone benefits in the short term, at
least while government legal, taxation and enforcement infrastructures are
still inadequately efficient.  Instead of the excess profits being filtered
and documented, and transactions slowed, by legal or fiscal (taxation)
enforcement mechanisms, the actors involved negotiate and trade directly,
each immediately taking whatever shares they will accept (as natural,
"freed" market actors).

It has been several times more than once that i've heard foreign business
folk here in Saigon applauding the superior (if short-term) efficiency of
simply going under-the-table compared to going legal channels back home.
And it was no different in Canada, the US and most of the West less than a
century ago.  And entrepreneurs in the more advanced countries who still
pine for the good old days of less cost-effective government regulation are
still not uncommon.

Laws, regulation and moral minorities are both the creators and impetus of
the grey and black markets.  Markets outside "the Law" have been filling the
gaps between natural human levels of demand and supply and those they try to
impose ever since laws were created.

The illegal sex and drug trades are classic examples.  Both have have
existed and prospered ever since many people tried out and liked the things
they can get in those markets and others more powerful have tried to stop
them.  If enough people want or need some thing (product or service), no
matter what laws or ethics want to curb the supply or demand of that thing,
some people still will buy and sell it, but simply at higher prices -- and
usually higher,
"supernormal<http://www.pinkmonkey.com/studyguides/subjects/eco/chap9/e0909301.asp>"
profits, too, to compensate themselves for higher risks they must take --
than the price or profits that would exist without those social or legal
restrictions.

Both In deed and by definition, artificial laws or ethics that impose
restrictions or prohibition on pervasive demand or attendant supply create
the grey and black markets they must then end up fighting.   That's
something few followers of "common sense" like to know or remember.

Further, they usually provide the impetus for both the growth and
criminality of the illicit markets, and, the funding of those fighting
against them, from the super-normal profits they create and the criminality
they impose on the illicit markets.

If they can get a high enough price to offset their risks, people will
supply other people who want things restricted by laws, like alcohol,
marijuana, extreme sex or whatever.  And, if artificially limited legal
suppliers exist, the illegal suppliers will usually provide either lower
prices and higher volumes or additional volumes at higher prices than any
legal suppliers, if any, are able to provide.  Thus, they'll usually earn
super-normal profits.

And since they are legally classified as outside either the regulation or
protection of "the Law", they will buy or build their own private, likely
illegal protection services.  And since anything legally restricted can
usually still be bought or built in illegal markets, extremes of related,
unethical or illegal behaviors and business practices will most likely
support the restricted things' markets as well.

At the same time, if the regulators are insufficiently funded relative to
those supernormal profits, corruption most likely increases among their
ranks.  Those wanting to effectively maintain such restrictions must then
compensate and fund their enforcement services relative to the super-normal
profits created or watch their regulatory efforts be undermined by the gaps
between their enforcers' incomes and those they try to restrict.

That's why US Drug-War enforcement organizations are now usually to keep and
use the monies they seize and why lawyers in the advanced nations are so
much better paid than those in nations with less developed or efficient
legal and enforcement systems.

So the end result is both the regulators and suppliers that refuse their
regulation generally get richer than they would without the regulatory
laws.  And, all too often, if not usually, they both get rich enough to buy
or create and maintain or grow their own well-supplied security and
enforcement services, like those of the US Mafia and drug cartels versus the
US DEA, ATF, etc, etc and Army!

And both naturally have a very strong impetus to neither stop nor stop
growing as long as they're profiting more than those in unregulated, often
more competitive markets.

Few major criminal markets have ever been stopped completely by any
prohibitive legal systems.  Prostitution is not called the world's oldest
profession for nothing.  Porn is not the Internet biggest, most technically
sophisticated sector by either chance or exception.  And the Drug Wars the
nations wage on their own peoples only escalate each year with the best
weaponry that can be bought being used on both sides.  Some actors and
organizations get stopped or fade out, by enforcement or their own internal
economic errors, but others always replace them, at least until the
prohibitive laws are abolished.

The US Prohibition of the early 20th century is the classic example today.
The Drug War is not that classic example today simply because its still
being fought and "truth is always the first casualty of war".

All told, the above, i'd say, is roughly the ultimate argument for keeping
unnaturally restrictive laws to an absolute minimum and using them only when
they will clearly and unequivocally provide net benefits to an overall
market, communal, national or international.

But then that's ultimately an argument for economic efficiency, and even
justice, via libertarianism if not virtual anarchy, a result few of any
population can understand or accept.  And just as few politicians,
legislators or lawyers will promote either one, since neither libertarianism
nor anarchy require as many or as well-paid politicians or bureaucrats as
more regulated markets require -- sort of a lascivious, symbiotic circle of
economic actors, you know?

References:
01.  Supernormal profits: Pink Monkey Economics Study Guide - Cost &
Profits,
http://www.pinkmonkey.com/studyguides/subjects/eco/chap9/e0909301.asp
02.  The Economics of Prohibition (none of which i've read but am betting
will support the above, from
http://www.google.com/search?q=prohibition+economics ):
Alcohol *Prohibition* Was A
Failure<http://www.cato.org/pubs/pas/pa-157.html>Source:
Clark Warburton, The *Economic* Results of *Prohibition* (New York: Columbia
*.....* [2] See Mark Thornton, The *Economics* of *Prohibition* (Salt Lake
City: *...*
www.cato.org/pubs/pas/pa-157.html - *[PDF] - *70k -
Cached<http://72.14.235.104/search?q=cache:RGyFegpLRL4J:www.cato.org/pubs/pas/pa-157.html+prohibition+economics&hl=en&ct=clnk&cd=1&gl=vn&client=firefox-a>-
Similar
pages<http://www.google.com.vn/search?hl=en&safe=off&client=firefox-a&rls=com.ubuntu:en-US:official&hs=qk0&q=related:www.cato.org/pubs/pas/pa-157.html>

Costs of Marijuana *Prohibition*: *Economic*
Analysis<http://www.prohibitioncosts.org/>Replacing
marijuana *prohibition* with a system of taxation and regulation similar to
that used for alcoholic beverages would produce combined savings and tax *
...*
www.*prohibition*costs.org/ - 7k -
Cached<http://72.14.235.104/search?q=cache:qvQBEonUFdEJ:www.prohibitioncosts.org/+prohibition+economics&hl=en&ct=clnk&cd=3&gl=vn&client=firefox-a>-
Similar
pages<http://www.google.com.vn/search?hl=en&safe=off&client=firefox-a&rls=com.ubuntu:en-US:official&hs=qk0&q=related:www.prohibitioncosts.org/>
 The *Economics* of *Prohibition* - Mises
Institute<http://www.mises.org/story/2269>At
the core of this book, one of the first theoretical investigations of *
prohibition*, is an *economic* theory of *prohibition*, which defines *
prohibition* as a.*..*
www.mises.org/story/2269 - 41k -
Cached<http://72.14.235.104/search?q=cache:7rWD1kg7paQJ:www.mises.org/story/2269+prohibition+economics&hl=en&ct=clnk&cd=5&gl=vn&client=firefox-a>-
Similar
pages<http://www.google.com.vn/search?hl=en&safe=off&client=firefox-a&rls=com.ubuntu:en-US:official&hs=qk0&q=related:www.mises.org/story/2269>


On 8/15/07, Hoang Thanh <httmail at gmail.com> wrote:
>
> [ Vietnam Business Forum ]
>
> Hello everyone
> the interesting point in this article for me is : It highlights the
> important role of bussines-organisation/individual and citizen in anti
> corruption.  Mostly, i found people usually blame Government officials for
> bribe &corruption , and only see Government's role in changing the
> situation, but forgot to see that citizen/bussiness organisaion are the main
> cause of it.
> Like a Hoanh mention, the behavior of "ignorance" of citizen , saying
> "bribes is ok, just the way it is..." or "under-table case" of
> bussniess-org..I think it makes the corruption worse. It becomes practice.
> :-)
> Some of my though!
> Thanh Thanh
>
>
> 2007/8/15, AD Marshall <admarshall at gmail.com>:
> >
> > [ Vietnam Business Forum ]
> >
> >
> > For those who don't already subscribe to the bleeding-edge heroism of
> > the efforts behind vnnews-l by Stephen Denney:
> >
> > Copyright 2007 Toan Viet Ltd, Source: The Financial Times Limited
> > Vietnam News Briefs
> >
> > August 14, 2007 Tuesday
> >
> > ACC-NO: A200708143A-15A67-GNW
> >
> > LENGTH: 243 words
> >
> > HEADLINE: CULTURE & SOCIETY INTEL, VIETNAM JOIN HANDS TO FIGHT
> > CORRUPTION
> >
> > BODY:
> >
> >
> > from the VIETNAM NEWS BRIEFS, August 14, 2007 Intel Products Vietnam, an
> > affiliate of the US-based chip giant and the Saigon Hi-tech Park (SHTP)
> > in
> > Ho Chi Minh City expect to sign today [August 14] a memorandum of
> > understanding to jointly fight red tape and corruption, Thanh Nien
> > newspaper reported
> >
> > Under the agreement, the two sides would have to comply with business
> > ethnics and other rules of conduct focusing on honesty and
> > straightforwardness, head of the SHTP Nguyen Dinh Mai told Thanh Nien
> > journalist, saying that Intel and SHTP will also cooperate closely to
> > detect and deal with bribery and other wrongdoings
> >
> > This is the first time Intel has signed this kind of MoU, Rick Howarth,
> > CEO of Intel Vietnam said, hoping that the signature will help
> > Vietnamese
> > government better its fight against corruption, which is considered a
> > serious threat to the Southeast Asian nation's economic development. In
> > upcoming time, Howarth noted, Intel would collaborate with agencies at
> > higher levels, even the government to combat the evil. Anti-corruption
> > will also be a good way to contribute to projects' success and convince
> > more foreign investors to Vietnam, the CEO said
> >
> > In March Intel began construction of a $1 billion computer component
> > facility in SHTP which is scheduled to begin production in mid 2009. It
> > will be Intel's largest global chip manufacturing facility.
> > (Thanhnienonline Aug 13, VnMedia Aug 14, Vietnam Panorama) Copyright
> > 2007
> > Vietnam News Briefs
> >
> >
> > Vietnam News List - vnnews-l
> > http://coombs.anu.edu.au/~vern/forum.html
> > <http://coombs.anu.edu.au/%7Evern/forum.html>
> > List owner: Stephen R Denney <sdenney at ocf.berkeley.edu>
> >
> > To subscribe/unsubscribe send message to < majordomo at coombs.anu.edu.au >
> > with the body reading:
> >
> > unsubscribe vnnews-l <your email address>
> > or
> > subscribe vnnews-l <your email address>
> >
> > On 8/15/07, Tran Dinh Hoanh <tdhoanh at gmail.com> wrote:
> > >
> > > [ Vietnam Business Forum ]
> > >
> > >
> > > Dear Sister Bich Lien & CACC,
> > >
> > > You pose a wonderful question, sister.  Lucky for the students who
> > > have you as their teacher, Bich :Lien they will learn well!
> > >
> > > "There must be something else, a part from legislation and individual
> > > citizens, that make the system the way it did.  An open-ended question, to
> > > which I have no answer."  That is so true!  Bich Lien, I had that question
> > > when I was 17, and it followed me for several decades, and during that
> > > times, I searched for the answer in every thing under the sun; you name it,
> > > I have searched in it.
> > >
> > > I have such a strong urge to share with you my long journey, but to
> > > save everyone's time, let me just share the final observation: The missing
> > > thing that sis. Bich Lien is looking for is "*the standard of conduct
> > > that the majority of the people demand. *"
> > >
> > > If the *majority* of people demand the *standard *that their leaders
> > > have to be honest, that bribery is bad, then the country will have
> > > honest leaders and will have less corruption.  If the majority of people
> > > think that their leaders just have to be "effective" (whatever effective
> > > means)but don't have to be honest, and that corruption/bribery is an OK way
> > > to live and to do business, then the country will be marred with
> > > lying/cheating leaders and corruption will fill the scene.
> > >
> > > Please note, I say "*majority of people*." Sister Bich Lien said there
> > > are MANY good officials.  But many is not enough if that many is still the
> > > minority.
> > >
> > > And I say "*standard of conduct*," meaning, the character traits that
> > > people look up to and whoever achieves such characters will be admired by
> > > most people, the character traits that people want their leaders to possess
> > > . Standard is usually a bit idealistic, because standard is for "the
> > > best scenario."  Say, the standard score for good student is the perfect
> > > 10/10.  But few students ever achieve this.  Most good students would get
> > > 9/10 or 8/10 only.  However, everything being equal, the school that has
> > > the 10/10 standard will produce much better students than the school that
> > > sets 8/10 as its standard.
> > >
> > > Most people in Vietnam think that paying and receiving bribes is OK,
> > > it is just a way to do things.  The majority of the people will not stand up
> > > and say that it is bad and that it must be stopped.  (Since 18 years old in
> > > college in Saigon, I have fought against most of my friends who would
> > > convinced me that corruption and bribery is the way to live and that I am
> > > just naive.  Imagine you hear this from 18 years old kids (who were my
> > > friends)!  Sad but true.  And today many people still tell me that I am too
> > > idealistic, that they don't need honest leaders, that they believe
> > > corruption is an OK or acceptable way to do business, or corruption is just
> > > a matter of semantic.
> > >
> > > We will always disagree in many specific circumstances whether a
> > > sentence spoken is honest or not, or a specific gift or payment is indeed a
> > > bribe.  Application of a rule to a specific case may raise disagreement
> > > among friends.  That is OK.  But at least, the majority of the people have
> > > to believe in the rule of honesty and the rule of clean business and clean
> > > government.  If we don't have the majority, the minority of good people
> > > won't be enough.
> > >
> > > How to get that majority?  Simple, keep talking, keep preaching, keep
> > > teaching, and keep practicing honesty and cleanliness.  It is hard, because
> > > we all are human, and we all, including me, and especially me, fail often
> > > for our weaknesses, and we need to eat and pay bills and feed our children
> > > too.  I know.  But if we have faith in the ultimate victory of goodness,
> > > will stand up after each fall, and continue talking about honesty and clean
> > > governance again and again and again, time after time after time, regardless
> > > of what the negative people may say, then eventually that majority will be
> > > achieved.
> > >
> > > Trust me.  Have faith!
> > >
> > > Have a great day, sis. Bich Lien and all.
> > >
> > > Hoanh
> > >
> > >
> > >
> > > On 8/15/07, Bui Bich Lien <lien.bb at gmail.com > wrote:
> > > >
> > > > [ Vietnam Business Forum ]
> > > >
> > > >
> > > >
> > > >  Anh Hoanh and CACC,
> > > >
> > > >
> > > >
> > > >    1. The OECD member countries adopted a Convention on Combating
> > > >    Bribery of Foreign Public Officials in International Business Transactions
> > > >    in 1997.
> > > >
> > > >
> > > >
> > > >    1. Corruption in Vietnam, as elsewhere, is often systematic.
> > > >    So I guess that an institutional approach to corruption may help enlighten
> > > >    the problem.  Having said this, I do not mean to underestimate the fact that
> > > >    ethical individuals/citizens are jewels in every society.  But as Nam Cao
> > > >    stated [almost hundred years ago] in the famous Chi Pheo "tao muon lam nguoi
> > > >    tu te, nhung ai cho tao lam nguoi tu te" (I want to be a good person, but
> > > >    who allows me to do that???).  Within my limited circle of
> > > >    friends/acquaintances, I already know MANY public officials in Vietnam who
> > > >    have relatively high ethical standards and want to be good citizens.  But
> > > >    it's the fact that they are operating in a system that is known for high
> > > >    level of corruption.  The system has not been mature enough to facilitate
> > > >    them to do what they want -- life is a matter of choice, and I can well
> > > >    understand one's choice of survival before ethical.  If the US has FCPA,
> > > >    Vietnam has an Anti-corruption Law too.  And I just mentioned, Vietnam seems
> > > >    not lack ethical officials/professionals either.  There must be something
> > > >    else, apart from legislation, and individual citizens, that makes the system
> > > >    the way it is.  An open-ended question, to which I have no answer.
> > > >
> > > >
> > > >
> > > > Rgs,
> > > >
> > > >
> > > >
> > > > Lien
> > > >
> > > >
> > > >
> > > >
> > > > --
> > > > Tran Dinh Hoanh, Esq., LLB, JD
> > > > Washington DC
> > > >
> > >
> > > _______________________________________________
> > > To subscribe/unsubscribe, please contact admins at
> > > vnbizadmin at vietlinks.net
> > > Info at http://mail.saigon.com/mailman/listinfo/vnbiz
> > > Archive at
> > > http://groups.yahoo.com/group/vnbiz/
> > > or http://groups-beta.google.com/group/VNBIZforum/
> > > or http://mail.saigon.com/pipermail/vnbiz
> > >
> > >
> >
> > _______________________________________________
> > To subscribe/unsubscribe, please contact admins at
> > vnbizadmin at vietlinks.net
> > Info at http://mail.saigon.com/mailman/listinfo/vnbiz
> > Archive at
> > http://groups.yahoo.com/group/vnbiz/
> > or http://groups-beta.google.com/group/VNBIZforum/
> > or http://mail.saigon.com/pipermail/vnbiz
> >
> >
>
>
> --
> Hoang Thanh Thanh-Reporter
> Vietnam Digital Television VTC
> 8D Nguyen Thi Minh Khai- Q.1-TP.HCM
> Tel:  (+84.8) 910.6476
> Fax: (+84.8) 911.1140
> Cell: +8490.333.77.46
> _______________________________________________
> To subscribe/unsubscribe, please contact admins at
> vnbizadmin at vietlinks.net
> Info at http://mail.saigon.com/mailman/listinfo/vnbiz
> Archive at
> http://groups.yahoo.com/group/vnbiz/
> or http://groups-beta.google.com/group/VNBIZforum/
> or http://mail.saigon.com/pipermail/vnbiz
>
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mail.saigon.com/pipermail/vnbiz/attachments/20070815/abad31f5/attachment-0001.html

More information about the Vnbiz mailing list