Vietnam is taking another important step toward boosting confidence among international investors that the world’s most promising frontier market is serious about competing on an international stage and playing by the rules of global business.
Arresting senior executives of the state-owned shipping company Vinalines for fraud and embezzlement, Vietnam is demonstrating intolerance of mismangement — continuing a tough anti-corruption policy that led to imprisonment of the top executives of Vinashin after scandal in the shipbuilding company was exposed two years ago.
Vinalines is not just the scandal of the year. It is evidence Vietnam is preparing to be a major player in the global economy. Today Vietnam is the most exciting frontier market in the world. To realize its potential, Vietnam needs to take on the challenges that are holding it back — including financial and monetary stability; legal protections for investors and intellectual property; and changing some of the elements of the business culture.
In some ways, Vietnam is taking a tougher approach toward mismanagement and corruption in its businesses than is common in fully developed countries. In Vietnam, a senior executive who mismanages a state-owned company is punished for doing harm to the people of Vietnam; theoretically, fraud for extensive personal gain can lead to execution. How many Wall Street bankers have been executed in the US?
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