by Simon SC Tay

In 2001, three leaders of South East Asian countries were investigated for corruption. The allegations against President Estrada of the Philippines, President Wahid of Indonesia, and Prime Minister Thaksin of Thailand, were in no way connected. These trials, unprecedented in many ways, were however markers of change.

A norm has shifted in Asia. In the past, the idea of even investigating leaders would have been unthinkable. Today, the ideal of a good and non-corrupt government is part of what Asians value. But while efforts have been made, corruption still remains an everyday occurrence.
Among the ASEAN states, Indonesia and Vietnam were amid the countries rated lowest by Transparency International. Thailand, the Philippines and Malaysia were only slightly better. From Asia, Singapore alone was rated in the top tier, alongside countries like Denmark.

During the years of the so-called Asian miracle, this did not seem to matter so much. Some even argued that corruption paid by businessmen to officials was little more than an extra tax or license fee. Development, they said, was not affected, so long as the bribe achieved its purpose, was not exorbitant and there were profits to be made. The crisis of 1997 changed that.

Corruption, cronyism and nepotism – KKN in Indonesian parlance – were identified among the root causes of the crisis. KKN had led to many projects that were not rational and viable. Rent-seeking behaviour and corruption had spawned hubris and mega-projects that did not recognize the discipline of the bottom line. Currency fluctuations were only the trigger points. Thus, recovery requires a reform in governance in Asia – both public and in the private sector.

That call for reform has been followed, in part, by action. Hence the very public investigations of the three regional leaders. If the most powerful can be brought down to account for charges of corruption, the reformers argued, this would send the right signals throughout the system and other officials could be brought into line.

Two of the three leaders – Wahid and Estrada -- have gone from office. Prime Minister Thaksin of Thailand remains in power after a controversial decision by the Supreme Constitutional Court to acquit him. It is an open question however if the adage ‘two out of three is not bad’ should apply.

The change in attitude against corruption is not absolute. In the Philippines and Indonesia, the leaders were pushed out more for mismanagement than corruption per se. The allegations in Bulogate against Wahid and by Singson against Estrada only gave stronger grounds to those critics and political opponents who were already looking for reasons. If the leaders had been effective or promised to be, perhaps what they had done and much more could have been forgiven.

This may well describe the underlying difference between their fate and Prime Minister Thaksin’s. Backed by a large majority that had elected him and still believed he could put the country on the right path, the Thai leader gave scant respect to his corruption trial. He has even criticised the idea that he could be disqualified from office by non-elected judges.

Political power, in this regard, still matters. The moral imperative of weeding out corruption bends to the prospect of an effective government.

Given the pain of these last years of crisis and drift, this may be understandable. There is a danger that anti-corruption efforts and reform in Asia may falter as the crisis years grow more distant.


What can be done?

Corruption must be seen not only as a moral issue, but an economic one. The World Bank and Transparency International have already drawn the links from good governance and anti-corruption efforts, to competitiveness. In theory, countries that are cleaner should be better at attracting and sustaining foreign direct investment (FDI). Clearly, corruption increases the risk of doing business. In contrast, systems that are more predictable, fair and open should be more
attractive to investors who think long term.

The difficulties in translating that theory into practice are however manifold.

Perhaps the major difficulty is that there is no quick fix to corruption. Even if a political leader tries to reform, it is not something that he or she can do alone. A national integrity system is needed that involves not just laws and police, but courts, political leaders, a freer media and an aware and able civil society.

The case of Singapore, as an exception in Asia, is often traced to the Peoples Action Party (PAP) government and the example of Lee Kuan Yew, as the founding prime minister. Yet, while leaders and political will are essential, there are other necessary ingredients for the wider civil service. This includes a system of meritocracy in allocating recognition and reward and sufficient pay.

Setting up such a system is not easy. Corruption cannot be contained and in many societies has already eaten away at institutions, like the courts, that could potentially lead the anti-corruption campaign. For many, corruption is widespread and the public finances are already much reduced. With a large government deficit, pay rises for officials – to lessen temptation – may be economically and politically impossible. The prescription of a national integrity system may be readily accepted in principle but much harder to implement. Even nations that want to reform may be unable to do so.

The international community has done very little to encourage the process. The question of corruption has largely been avoided by the UN and other intergovernmental institutions, as being political dynamite. This is notwithstanding the clear links to good governance, development and democracy.

Businesses too, while bemoaning risky and corrupt regimes, have done little. Instead, FDI pours into countries like China, where corruption remains a major issue. The hope of large rewards, it would seem, overwhelms considerations about corruption.

Yet, there are helpful things that the international community and multinational businesses can do about corruption, even if they do not wish to interfere in domestic, moral questions.


Proposals for combating corruption

One possibility is for more states to join those like the USA and Singapore that already make it a crime for their citizens to engage in corrupt practices abroad. Another is to measure the risk that comes in corrupt systems more accurately and enter that into the business equation of promoting foreign investment. A third initiative can be undertaken by the private sector to build concerns about corruption into existing investment funds that emphasize social responsibility. Fourth, financial and technical assistance to developing countries should increase funding to programs that specifically seek to develop strategies and capacities to deal with corruption.

Most directly and ambitiously, perhaps, the international community should come together to negotiate an international treaty on anti-corruption measures. After all, the international system is predicated on states that are responsible to their citizens and to their fellow states. Much effort is made to have these governments make promises about issues like the environment and human rights. Yet, these state promises count for little when the system is riddled by corruption. Equality for citizens, rationality in deciding on development priorities and the pre-eminence of public good over private gain are just some of the ideals that get rubbished in corrupt systems. Otherwise even the solemn promises made by the state can be sold off for private gain.

Anti-corruption efforts must not be neglected by Asians and their friends. They should instead be at the core of reform towards good governance.

Simon SC Tay is chairman of the Singapore Institute of International Affairs, a non governmental think tank that is a founder member of the network of ASEAN Institutes of Strategic and International Studies. He is concurrently a professor of international law at the National University of Singapore and a non-elected and independent Member of the Singapore Parliament, nominated by the public. Email: siia@pacific.net.sg