How will the Saigon Commercial Bank Scandal Impact Foreign Investment?

After enduring several years of the “blazing furnace” anti-corruption campaign led by Communist Party General Secretary Nguyen Phu Trong, Vietnam is now facing the largest embezzlement scandal in the history of the country and the whole of Southeast Asia. If true, the allegations that real estate developer Truong My Lan orchestrated the embezzlement of USD 12.4 billion from Saigon Commercial Bank (SCB) would dwarf the USD 4.5 billion stolen from Malaysian sovereign wealth fund 1MDB.

For most of 2023, the dot lo, or "blazing furnace'" campaign was cited as a major challenge to foreign investors looking to establish or expand their presence in Vietnam. Fearful of facing corruption charges, government officials reportedly slowed down approvals for permits and delayed procurement decisions relied upon by foreign investors. However, market entry specialists and investment advisors, such as Global M&A Partners based in Dublin, have predicted an uptick in foreign investment heading into 2024.

But following the embezzlement charges implicating SCB, General Secretary Trong pledged to redouble his efforts, stating “we need to conduct the anti-corruption fight faster in a more efficient manner." How the Communist Party leadership intensifies the anti-corruption drive - which has already resulted in the arrest of hundreds of government officials and businesspeople - will have a major impact on whether the foreign investment predictions for 2024 come true.