Starving the corrupt
Starving the corrupt
Posted 00:06am (Mla time) Mar 11, 2005
Inquirer News Service
Editor's Note: Published on page A14 of the March 11, 2005 issue of the Philippine Daily Inquirer
SAN JUAN Mayor JV Ejercito is furious that the Hong Kong-based Political and Economic Risk Consultancy (PERC) rated the Philippines second only to Indonesia for corruption in the region. His competitive instincts must have pushed him to proclaim that our country should really be No. 1. Or perhaps he remembers how very hard his father, then President Joseph Estrada, tried to put us at the top of the dung heap.
The survey itself concludes, rather more soberly, that "corruption is clearly less today" than during the time of Ferdinand Marcos, although determining if the Gloria Macapagal-Arroyo administration "is any cleaner or dirtier" is a bit harder to determine. The reason for this lies in the very nature of the survey, which was based on the perceptions of foreign businessmen and not on anything more quantifiable than their opinions. The World Bank and US-based investment bank Morgan Stanley are explicit about the costs of corruption. The World Bank estimates that about $48 billion was lost to corruption over a 20-year period, while Morgan Stanley placed the loss at $204 billion between 1965 and 2001.
Interestingly, the survey indicates that the Philippines stands virtually shoulder-to-shoulder with some other Asian countries. The Philippines got a score of 8.8 (on a scale that has 0 as the least corrupt and 10 absolutely corrupt); India got 8.63, Vietnam 8.65, while Indonesia got 9.10. These fractional differences indicate virtually indistinguishable, and quite high, levels of corruption afflicting all these countries. To make it even clearer, the best performing country, Singapore, with a score of .065, was three orders of magnitude better than Japan (3.46) and Hong Kong (3.50). But Malaysia (6.8), Thailand (7.2) and China (7.68) are within spitting distance of the Philippines. Which only goes to show that the entire region is profoundly, and seriously, afflicted with corruption in Western eyes.
But we don't need surveys to tell us corruption is bad. Everyone knows this, and has known it since time immemorial. The equally age-old question in the light of this perennial observation is, why aren't inroads being made in the fight against corruption? Tony Kwok, former deputy commissioner of the Hong Kong Commission Against Corruption, has come forward with the clearest reason. Speaking during a recent anti-corruption workshop, Kwok said, "I am confident that given the effective enforcement and successful prosecution by the [Office of the Ombudsman] and the partnership approach in this corruption prevention project, it is possible that this three-year project will see a marked improvement in the eradication of corruption in this country."
The key word in his statement is not a call for political will -- which is indeed required, but not enough -- but the concept of partnership.
Business leaders have seized on the concept of partnership by creating watchdog groups, a move that seems to ignore a basic bulwark of corruption, which is big business itself. The most poisonous fruits of corruption are ripened by the big money in the hands of big business, eager to cut corners to reduce taxes and fees levied by government. The profit motive taken to extremes entrenches corruption because of the vast sums that change hands, convincing civil servants that they have willing and eager co-conspirators to defraud the country. All the petty mulcting in the world-the small extortions endured by the population at the hands of civil servants -- is nothing compared to the big bounties made available by big business eager -- or forced -- to play ball with corrupt officials.
Observers, puzzled by the often anti-business mentality of much of the working population and the press, fail to see the genuine basis for this contemptuous attitude toward big business, even when it preaches honesty as part of its civic functions. The reason is, Filipinos get to see corruption up close and personal practiced by their bosses: the CFOs who push for greater profits and less taxes, the CEOs and COOs who happily mix with corrupt politicians to get ahead of the competition or avoid the full scrutiny of the law, and so on.
What the country needs is fewer watchdog groups and a greater determination on the part of businessmen to sacrifice profits to obtain honesty in government. This is the best, long-term business attitude of all: to starve the corrupt even if it entails tightening the belt for the present. The problem is, the profit motive, again, is so inexorable that short-term profits almost always outweigh potential future anti-corruption gains.
Posted 00:06am (Mla time) Mar 11, 2005
Inquirer News Service
Editor's Note: Published on page A14 of the March 11, 2005 issue of the Philippine Daily Inquirer
SAN JUAN Mayor JV Ejercito is furious that the Hong Kong-based Political and Economic Risk Consultancy (PERC) rated the Philippines second only to Indonesia for corruption in the region. His competitive instincts must have pushed him to proclaim that our country should really be No. 1. Or perhaps he remembers how very hard his father, then President Joseph Estrada, tried to put us at the top of the dung heap.
The survey itself concludes, rather more soberly, that "corruption is clearly less today" than during the time of Ferdinand Marcos, although determining if the Gloria Macapagal-Arroyo administration "is any cleaner or dirtier" is a bit harder to determine. The reason for this lies in the very nature of the survey, which was based on the perceptions of foreign businessmen and not on anything more quantifiable than their opinions. The World Bank and US-based investment bank Morgan Stanley are explicit about the costs of corruption. The World Bank estimates that about $48 billion was lost to corruption over a 20-year period, while Morgan Stanley placed the loss at $204 billion between 1965 and 2001.
Interestingly, the survey indicates that the Philippines stands virtually shoulder-to-shoulder with some other Asian countries. The Philippines got a score of 8.8 (on a scale that has 0 as the least corrupt and 10 absolutely corrupt); India got 8.63, Vietnam 8.65, while Indonesia got 9.10. These fractional differences indicate virtually indistinguishable, and quite high, levels of corruption afflicting all these countries. To make it even clearer, the best performing country, Singapore, with a score of .065, was three orders of magnitude better than Japan (3.46) and Hong Kong (3.50). But Malaysia (6.8), Thailand (7.2) and China (7.68) are within spitting distance of the Philippines. Which only goes to show that the entire region is profoundly, and seriously, afflicted with corruption in Western eyes.
But we don't need surveys to tell us corruption is bad. Everyone knows this, and has known it since time immemorial. The equally age-old question in the light of this perennial observation is, why aren't inroads being made in the fight against corruption? Tony Kwok, former deputy commissioner of the Hong Kong Commission Against Corruption, has come forward with the clearest reason. Speaking during a recent anti-corruption workshop, Kwok said, "I am confident that given the effective enforcement and successful prosecution by the [Office of the Ombudsman] and the partnership approach in this corruption prevention project, it is possible that this three-year project will see a marked improvement in the eradication of corruption in this country."
The key word in his statement is not a call for political will -- which is indeed required, but not enough -- but the concept of partnership.
Business leaders have seized on the concept of partnership by creating watchdog groups, a move that seems to ignore a basic bulwark of corruption, which is big business itself. The most poisonous fruits of corruption are ripened by the big money in the hands of big business, eager to cut corners to reduce taxes and fees levied by government. The profit motive taken to extremes entrenches corruption because of the vast sums that change hands, convincing civil servants that they have willing and eager co-conspirators to defraud the country. All the petty mulcting in the world-the small extortions endured by the population at the hands of civil servants -- is nothing compared to the big bounties made available by big business eager -- or forced -- to play ball with corrupt officials.
Observers, puzzled by the often anti-business mentality of much of the working population and the press, fail to see the genuine basis for this contemptuous attitude toward big business, even when it preaches honesty as part of its civic functions. The reason is, Filipinos get to see corruption up close and personal practiced by their bosses: the CFOs who push for greater profits and less taxes, the CEOs and COOs who happily mix with corrupt politicians to get ahead of the competition or avoid the full scrutiny of the law, and so on.
What the country needs is fewer watchdog groups and a greater determination on the part of businessmen to sacrifice profits to obtain honesty in government. This is the best, long-term business attitude of all: to starve the corrupt even if it entails tightening the belt for the present. The problem is, the profit motive, again, is so inexorable that short-term profits almost always outweigh potential future anti-corruption gains.
posted by Dante at 12:06 AM
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