Vietnam, commonly still imagined through the recollection of its war, has since developed an entirely new reality. It is a nation filled with captivating natural beauty and emerging global markets. Due to lower labour costs and relative governmental stability, Vietnam continues to attract foreign investors and cultivate new relationships with countries that previously had little affiliation with it. This Dyami Insights will shed light on business continuity despite a global pandemic, its attractiveness towards investment, and the potential risks of the current age.
Vietnam fought a war against Covid-19
According to an op-ed in the Guardian, Vietnam ‘had all the ingredients for a Covid-19 disaster’. It shares a 13,000km border with China with lots of informal trade through the mountains and an underdeveloped healthcare system. While they treated the outbreak as biological warfare, conducting contact tracing to the fourth layer and isolating everyone, Vietnam managed what most of Europe and the U.S. couldn’t. The communist-ruled and traditionally secretive Vietnam has depoliticised the pandemic, treating it solely as a health crisis. As the government made it relatively clear that neither politics nor commercial interests should be entangled with public health, and the country is a one-party socialist republic, there has been little room for politicians to push their political agendas throughout the pandemic.
At the time of writing, it appears that the second wave of covid is not that big of a threat. Vietnam has a total of 1,169 confirmed cases and 35 deaths. The nation has been negotiating with alliances to shorten the quarantine time for travelers to move forward with business. The Vietnamese attempts towards business continuity allow us to imagine that the pandemic does not necessarily discontinue its market. Although the Covid-19 situation may not change business dynamics, it does pave the way for the increase in existing dynamics of risk.
Scammers are Seizing Opportunities in Vietnam
It has been previously noted by the Vietnamese Ministry of Industry and Trade that several corporate scams between Vietnam and foreign enterprises are reported. Notably, foreign companies sell their products or services to partner companies in Vietnam, and in turn, Vietnamese partners fail to pay. Before the pandemic, these risks can be mitigated by the implementation of corporate intelligence investigation, background studying, cultural understanding, which has become rather challenging without physical presence.
While the covid-19 pandemic may be carefully subsiding in Vietnam, it does not (yet) change the fact that global travel is severely restricted, governments are preoccupied with managing the crisis, and most people work from home. As a result, multinationals and other business investors are particularly vulnerable to scams and, on a larger scale, systematic fraudulent acts. Simultaneously, businesses struggle to overcome turbulent economic times and may be inclined to operate more drastically and with less care. Therefore, it becomes more relevant than ever to reassess the possibility of fraudulence in one’s field of operations.
Fraud in the context of Covid-19
Traditionally, the risk of fraud is illustrated by the ‘fraud triangle’. It aims to demonstrate how and why fraud occurs and consists of three elements: perceived pressure, opportunity, and rationalisation.
In current times, these elements are affected by the Covid-19 pandemic and make way for new interpretations. In Vietnam, there is a significant loss of employment and salary cuts among the population. This inflates the financial pressure put on families and may increase motivations to commit fraud. Furthermore, due to the continuation of travel restrictions, working from home and governmental preoccupation, supervision is absent in many key business areas. Therefore, opportunists may cease this situation for personal gain. Finally, given the significant economic turmoil, the personal threshold for unethical behaviour is more comfortably justified towards oneself.
What can be done?
To mitigate the increased risk of fraud, companies operating in Vietnam should carefully consider the partnerships made. While it may be tempting to accelerate international business acquisition to overcome losses due to the pandemic, it generates a degree of vulnerability. The first step towards dealing with threats is always awareness.
Auteur: Bob Rehorst
Bob is een Global Security Analist bij Dyami.
Met een achtergrond in antropologie en conflict analyse specialiseert hij zich in patroon herkenning en mondiale crisissen.