Two weeks ago, the Wall Street Journal, Asia edition, reported on foreign companies’ worries over Vietnamese authorities increasingly restricting the freedom to do business, while the country braces for an economic downturn, rising inflation, and a collapse of its national currency, the Dong.
The Communist Party, which has been in power for 35 years in a reunified country, wants to better control the country’s economic and social evolution. The Party demonstrates this by implementing price control for foreign goods; blocking access to websites and social media, such as Facebook and Twitter; and arresting bloggers.
The arrest of executives at Jetstar Pacific – the Vietnamese subsidiary of the Australia-based budget carrier – is the latest indication of Viet Nam’s Politburo tightening grip. The two Australian senior executives are Jetstar Pacific’s chief operating officer, Daniela Marsilli, and the airline’s chief financial officer, Tristan Freeman. The airline’s previous CEO, Luong Hoia Nam, was also arrested for questioning over losses due to fuel hedging. Jetstar Pacific has announced a loss of US$34 million. Australian citizens have been denied the right to leave Vietnam as long as the investigation is ongoing.
Qantas CEO Alan Joyce – Jetstar’s main shareholder – has defended the decisions of his executives and renewed his confidence in doing business in Viet Nam. “We do know that airlines around the world experience losses as a result of hedging. It’s not unusual; it’s not uncommon,” declared Joyce during an interview with Australian television network ABC News. However, the event might discourage foreign investors to come to Viet Nam for a long time.