Corruption In Asia

The figures below were from the respected Political & Economic Risk Consultancy unit in HK which has been supplying yearly corruption perception index data on all countries. Ten being the worst score and zero being the best, the figures are for the 2007 study,bracketed was the country's score back in 2005:

Philippines 9.4 (8.8)

Indonesia 8.03 (9.1)

Thailand 8.03 (7.2)

Vietnam 7.54 (8.65)

India 6.67 (8.63)

South Korea 6.3 (6.5)

China 6.29 (7.68)

Malaysia 6.25 (6.8)

Taiwan 6.23 (6.15)

Macau 5.1

Japan 2.1 (3.46)

HK 1.87 (3.5)

Singapore 1.2 (0.65)

Some Observations:

a) Phillippines and Thailand have worsened significantly, and have taken on the roles as top of the heap. It used to be that no one can beat Indonesia, Vietnam or China when it comes to corruption. However, these are not hard and fast conclusions as these are still just perceptions, but the study has been done yearly with a good cross section of sampling, it does give a good overview of trends. Is it a coincidence when countries with political leaders grasping at straws to stay in power, usually deteriorates as well in corruption perception index - I tell you, its no coincidence.

b) Indonesia, Vietnam and India have all improved significantly in ratings. Especially Indonesia, I think anyone who has visited the place for business over the last 3 years can vouch for the changing business climate. The petty corruption still exists but the more corporate business is done at arm's length. Vietnam and India are the same, and all 3 have experienced good jumps in FDIs over the past few years as well - chicken or egg thing, more economic opportunities, less corruption, or vice versa. I think the former has more weight.

c) You could say the same for China, but the improvements in China is more broadbased in that there are: more jvs; more incentives to list abroad; more incentives to compete internationally; more scrutiny in financial regulation; adoption of more global best practices owing to the influx of Western educated management; peer-to-peer competition with HK; etc...

d) Malaysia has improved as well - how do I say what the reasons are without ending up in prison?? Hmm! New PM. Not as many "favoured sons" corporate scenes being played out now than say 5 or 10 years ago. A lot less mavericks in the financial markets - 10 years ago names like H Saad, T Ramli, Yahya-DRB, Teh SS, ... would roll off your tongues .. Now you'd be hard pressed to come up with names, even if you say Syed Mokhtar, he has shown more credibility in building up businesses than just opening up his hands for favours. Also, more progressive appointments in GLCs, especially at Khazanah which also filters down to the rest of the GLCs.

e) Its interesting to compare Macau and HK. That's why despite the proximity, things are always very different in Macau. Besides the new casinos and "entertainment sub-sectors", Macau also have probably the most corrupt and rigged horse race betting in the world, and I am not exaggerating. Mind you, horse racing in Malaysia would probably be in number 2 or 3 in terms of being rigged, with Singapore close behind.

f) I wouldn't look too much at HK and Singapore's numbers as they are way up there. Any fluctuations in yearly numbers are usually abberations. Only big difference between HK and Singapore corruption is offenders in HK usually end up in jail but in Singapore they usually commit suicide first.