Corruption Undermines Vietnam's Stimulus Program

As governments around the world roll out trillions of dollars in stimulus spending to combat the global recession, debate is raging over whether the flood of money will provide much more than a short-term economic boost and whether much of the cash will ultimately be wasted. With the number of poor growing and reports of some going hungry, communist officials in Hanoi recently decided to hand out $12 to millions of impoverished Vietnamese. It appears that many of the cash handouts were pocketed by corrupt local officials. In some cases, fees were deducted or the gifts were taxed to the point there was little left, according to local police. Families in Quang Binh province complained that they were required to sign receipts acknowledging they had received the handouts, but some villagers say more than 90% of the funds were siphoned off by petty bureaucrats. Under the unusual giveaway, Vietnamese living below the poverty line (defined by the government as those earning less than $15 a month) qualified to receive a gift of 200,000 Vietnamese dong, or about $12. Families were entitled to a maximum of $57. Though it may seem a paltry sum, the cash was a windfall for Vietnam's 10 million poorest. But Hanoi on its own can't change the course of global events.