Corruption Perceptions 

in Asia

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Corruption is one of those issues that people want to know about but is difficult to get straight answers. 
 

 
Why Corruption Exists
 

According to most research, the phenomenon takes hold in countries where there are perceived large disparities in wealth and political power. Within Southeast Asia, these conditions have been present for centuries beginning when foreign powers dominated the region. It was considered gallant to defy authority by swindling the elite and the culture of corruption developed over time. 

After the foreign powers departed, the disparities remained (and possibly became more entrenched) and corruption continued. Countries such as Indonesia, Philippines, Thailand, Vietnam, Cambodia and (less so) Malaysia have these conditions and rank poorly in transparency by the international rating agencies. Steady improvements are being made especially by the younger generation of leaders but much time will be required to change habits that have been in place for centuries. 

Among the region of Southeast Asia, Singapore seems to have done the most to develop a strong middle class and eliminate the large gaps between rich and poor. In so doing, this amazing little country is also now recognized as one of the world’s least corrupt. 


What is Corruption?
 
Corruption is defined as the misuse of a position of trust for private gain. It is usually separated into 3 categories and all are interrelated:

 
1. Bribery – offer of money or favours to a person in a position of trust.

 
2. Nepotism – preferential treatment to relatives or friends of a person in a position of trust. 

 
3. Fraud & Embezzlement – Stealing property or money from an organization through deceptive practices. 

When posted to emerging countries, most expatriates will experience petty corruption within a short time of arrival. They may be asked for a donation to “speed up” their work visa application at the immigration department or be pulled over by a policeman for no other offence than seeming to possess a wallet. 

Large-scale corruption involves higher-level officials and is conducted with much more discretion. Expatriates who are new to emerging countries can often have difficulty understanding the complex process or even determining whether it exists. Many large contracts (especially involving governments) are alleged to contain provisions for “unanticipated overheads” that can add up to 35% to project cost. 

More challenging still, corruption can often be found within many organizations wherever there are large or regular payments controlled by individual managers. Functional departments such as procurement, finance, HR and marketing are typical examples. New expatriates will often be perplexed why many products and services seem so costly in the supposedly poor country. 

Corruption is usually only of benefit to a small number of individuals. Most Asians do not benefit from the practice and are disgusted by it but do not report their colleagues out of fear, misplaced loyalty or shame for the behaviour. It is common for people use the term “overpriced” as a euphemism for corruption. 
 
 
Rationalizing Corruption
 
In so-called advanced countries, people have convinced themselves that providing prospective clients with free meals and sports tickets is not corruption.  The justification is that since the value of the items are not large and, more importantly, not hidden from sight it is not corruption.
 
In emerging countries, incentives are also provided to acquire business but to a more extreme degree. Buyers and decision-makers don't just get trinkets, they get hard cash, overseas trips and free automobiles. In both petty and large-scale corruption, lack of transparency is the key enabling factor. 
 
Petty corruption can usually be explained away easily since it involves small payments to poorly paid junior staff. A typical justification might sound something like this: 

 

“I am just a poor person who is trying to survive in a poor country. You, on the other hand, are a rich foreigner from a rich country with so much money that is doesn’t all fit in your pocket. What does it matter to you if you give me just a little bit so I can better provide for my children?”

 
Larger scale corruption is more difficult to rationalize since the amounts involved can be significant. Corrupt managers can double their annual income through cash payments (often called “enveloping”) and major gifts from suppliers or other beneficiaries. 

 

The largest opportunities for illicit gains are usually from big projects involving large capital expenditures. A road building project costing $50M but “overpriced” by 30% is a tremendous cash hoard and a great opportunity for corrupt officials. 
  
 

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Media organizations throughout the world call upon the Principals of Chalre Associates for thought leadership.  Below are some examples of published material written by our consultants or international journalists who refer to them.  For a complete list of published work, Click Here.  

 

 

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