World Bank Shots on Corruption (Wall Street Journal)

July 23, 2008. Vietnam has seen its cut of World Bank funds rise by more than $1 billion since 2004, to $4.1 billion this year. World Bank President Zoellick is a particular fan of the country, having made Hanoi his first foreign port of call after coming to the bank last year. The bank’s latest bequest consists of a $150 million budgetary support credit. Another $170 million will go to something called the Northern Delta Transport Development Project.

This new cash is flowing despite a confidential 2007 report by the bank’s anticorruption unit (INT) about two corrupt roads projects in Vietnam. In the $232 million Road Network Improvement Project—which remains active today—bank investigators found that “over one-half of the contracts reviewed were confirmed to have indicators of irregularities in contract procurement.”

Bid-rigging, collusion and fraud also marked Vietnam’s $110 million Second Rural Transport Project. This case is particularly striking because the precursor project, known as RTP1, had already been investigated by INT, which found the usual indicators of corruption. No matter. The bank is now moving ahead with RTP3, for an additional $106 million.

This corruption might be less objectionable if the projects had at least resulted in better roads for the poor. The INT found otherwise. “Inferior materials and little or no compaction gave the embankments little chance of surviving flood conditions,” it reported about a road in Long An Province. In hilly Quang Binh province, “instances of poorly implemented drainage indicated poor supervision and testing regimes and/or possible corruption.”

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Foreign Corrupt Practices Act (FCPA): News, Updates, and Important Links.