Monday, April 18, 2005
Third World “Corruption”
Sometime between Chinese New Year and Easter comes an annual event eagerly awaited by Asian governments and pundits alike, an ‘award’ given by the Political and Economics Risk Consultancy group out of Hong Kong. And like the movie industry’s “Oscar Awards”, the newspapers headline the results on the following day. This year the Philippines came in a close second to Indonesia’s winning score in the “Corruption Index”.
PERC’s bases their index ratings on a survey of hundreds of foreigners doing business in Asia who give their perception of the level of corruption in the various nations. The key word is “perception”. These businesspeople need not to have done business in any of the countries they rate for corruption. It does not matter if they have even ever visited any of the countries they rate; this survey measures their perception.
Having actually done business in many of these countries over the last twenty years, I can personally tell you the most corrupt person in the region is a certain moneychanger in the Jurong area of Singapore. The most corrupt public official I encountered was a member of the Thailand Senate, who threatened my partner with prison unless he at least considered marrying the good Senator’s very unattractive daughter…and apply for a U.S. visa for the family. But that is another story.
Corruption is the dishonest use of power or authority for personal gain and immediately implies a moral defectiveness. Maybe that is why the “First World” so enthusiastically applies the expression to governments in the “Third World”. To use that term so readily, echoes sentiments from the colonial past when the “First” ruled the “Third”, in part because the “Third” did not have either the moral or intellectual ability to govern itself. The First World capacity for unbridled and unashamed arrogance is amazing. But that too is another story.
Corruption is not a moral issue; it is an economic issue and the issue is poor and wasteful utilization of capital. However, actual or even perceived corruption does not necessarily preclude economic expansion. China was always on the top of PERC’s list, yet attracted great foreign investment, and achieved sustained economic growth for a decade. Even as the surveyed were decrying China’s crooked politicians, they continued to pour money into the Chinese economy.
Nonetheless, in nations like the Philippines where capital is limited and sometimes scarce, funds flowing into the off-shore bank accounts of dishonorable public servants, minor and high ranking, hinders economic development. When twenty percent of the money allocated for an infrastructure project never goes into the venture, something has to suffer, usually the quality of the project itself.
Corruption and the poor and wasteful utilization of capital, is not the birthright of the ignorant, wicked citizens of the Third World. We are just not as advanced in the techniques and really need to learn from our betters in the West.
Nothing in Southeast Asia has ever or perhaps ever will compare with the corruption of a project currently underway in Boston, Massachusetts, U.S.A.
Know as “The Big Dig”, it is a series of roads, tunnels, and bridges running through the city with the purpose of easing traffic congestion. Originally begun in 1983 at an estimated cost of US$2.2 billion, completion was scheduled for 1995. As of 2005, construction cost is more than US$14.5 billion for the 7.5 mile highway. One commentator estimated that the road could have been made using of bricks made of pure gold for about the same cost. The tunnels leak water so severely that safety is constantly questioned and repairs, if ever possible, will take at least ten years. Now that is corruption!
Still no public officials have been executed for malfeasance as occurs regularly in China. Senator Ted Kennedy, who pushed the funding for the project through the U.S. Congress, is not criminally liable and been incarcerated like former presidents of South Korea and the Philippines. In fact, the other strong proponent of “The Big Dig” just ran for U.S. President, Massachusetts Senator John Kerry. And they call us corrupt.
The corruption of public funds is not limited to a disaster like “The Big Dig”. A major city in the state of Michigan builds a mass transit system that costs so much to operate that the city must subsidize passenger fares or the customers would not be able to afford to ride it. The taxpayer subsidy amounts to over US$10,000 annually for each regular user. For the same amount of the yearly subsidy, not counting the construction cost, the city could have bought each of the passengers their own automobile. And they say we are foolish when we spend public money. And they are right.
The post-World War II economies of the West (and Japan) saw the greatest economic expansion and living standard improvement in the history of the world. It resulted primarily from the wise use of capital. Third World leaders and public officials ought to be forbidden from wearing clothes, eating food, or living in houses different from the poorest member of their societies. Then we might see an end to the economic corruption that plagues our nations.
PERC’s bases their index ratings on a survey of hundreds of foreigners doing business in Asia who give their perception of the level of corruption in the various nations. The key word is “perception”. These businesspeople need not to have done business in any of the countries they rate for corruption. It does not matter if they have even ever visited any of the countries they rate; this survey measures their perception.
Having actually done business in many of these countries over the last twenty years, I can personally tell you the most corrupt person in the region is a certain moneychanger in the Jurong area of Singapore. The most corrupt public official I encountered was a member of the Thailand Senate, who threatened my partner with prison unless he at least considered marrying the good Senator’s very unattractive daughter…and apply for a U.S. visa for the family. But that is another story.
Corruption is the dishonest use of power or authority for personal gain and immediately implies a moral defectiveness. Maybe that is why the “First World” so enthusiastically applies the expression to governments in the “Third World”. To use that term so readily, echoes sentiments from the colonial past when the “First” ruled the “Third”, in part because the “Third” did not have either the moral or intellectual ability to govern itself. The First World capacity for unbridled and unashamed arrogance is amazing. But that too is another story.
Corruption is not a moral issue; it is an economic issue and the issue is poor and wasteful utilization of capital. However, actual or even perceived corruption does not necessarily preclude economic expansion. China was always on the top of PERC’s list, yet attracted great foreign investment, and achieved sustained economic growth for a decade. Even as the surveyed were decrying China’s crooked politicians, they continued to pour money into the Chinese economy.
Nonetheless, in nations like the Philippines where capital is limited and sometimes scarce, funds flowing into the off-shore bank accounts of dishonorable public servants, minor and high ranking, hinders economic development. When twenty percent of the money allocated for an infrastructure project never goes into the venture, something has to suffer, usually the quality of the project itself.
Corruption and the poor and wasteful utilization of capital, is not the birthright of the ignorant, wicked citizens of the Third World. We are just not as advanced in the techniques and really need to learn from our betters in the West.
Nothing in Southeast Asia has ever or perhaps ever will compare with the corruption of a project currently underway in Boston, Massachusetts, U.S.A.
Know as “The Big Dig”, it is a series of roads, tunnels, and bridges running through the city with the purpose of easing traffic congestion. Originally begun in 1983 at an estimated cost of US$2.2 billion, completion was scheduled for 1995. As of 2005, construction cost is more than US$14.5 billion for the 7.5 mile highway. One commentator estimated that the road could have been made using of bricks made of pure gold for about the same cost. The tunnels leak water so severely that safety is constantly questioned and repairs, if ever possible, will take at least ten years. Now that is corruption!
Still no public officials have been executed for malfeasance as occurs regularly in China. Senator Ted Kennedy, who pushed the funding for the project through the U.S. Congress, is not criminally liable and been incarcerated like former presidents of South Korea and the Philippines. In fact, the other strong proponent of “The Big Dig” just ran for U.S. President, Massachusetts Senator John Kerry. And they call us corrupt.
The corruption of public funds is not limited to a disaster like “The Big Dig”. A major city in the state of Michigan builds a mass transit system that costs so much to operate that the city must subsidize passenger fares or the customers would not be able to afford to ride it. The taxpayer subsidy amounts to over US$10,000 annually for each regular user. For the same amount of the yearly subsidy, not counting the construction cost, the city could have bought each of the passengers their own automobile. And they say we are foolish when we spend public money. And they are right.
The post-World War II economies of the West (and Japan) saw the greatest economic expansion and living standard improvement in the history of the world. It resulted primarily from the wise use of capital. Third World leaders and public officials ought to be forbidden from wearing clothes, eating food, or living in houses different from the poorest member of their societies. Then we might see an end to the economic corruption that plagues our nations.
// posted by john mangun @ Monday, April 18, 2005 
