Best Practices for Curbing Corruption in Asian Countries Jon S.T. Quah, Ph.D. Vice-President, Asian Association for Public Administration Anti-Corruption Consultant, Singapore Email: jonstquah@gmail.com Website: http://www.jonstquah.com Presentation at the International Workshop on Combating Corruption in Public Sectors through e-governance organized by the OECD Korea Policy Centre and the Ministry of Public Administration in Dhaka, Bangladesh on November 22-23, 2011 1
Outline of Presentation 1. Definition of Corruption 2. Corruption in Asian Countries 3. Causes of Corruption in Asian Countries 4. Six Best Practices for Curbing Corruption 5. Conclusion 2
UNDP s Definition of Corruption The United Nations Development Programme (UNDP) has defined corruption as: the misuse of public power, office or authority for private benefit through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement. Source: Fighting Corruption to Improve Governance (New York: UNDP, 1999), p. 7. 3
As private sector corruption cases outnumber public sector corruption cases in recent years in Singapore and Hong Kong, I would like to modify the UNDP s definition thus: the misuse of public or private power, office or authority for private benefit. Advantages of this modified definition It identifies the seven major forms of corruption It is applicable to both the public and private sectors 4
Corruption in Asian Countries 1. Corruption is a serious problem in many Asian countries as manifested in their performance on World Bank s 2010 Control of Corruption Indicator Transparency International s 2010 Corruption Perceptions Index (CPI) Political Economic Risk Consultancy (PERC) 2011 Survey on Corruption 5
Table 1: Control of Corruption in Asian Countries, 2010 Country Percentile Rank Singapore 98.6 Hong Kong 94.7 Japan 91.9 Brunei 78.5 Bhutan 75.1 Taiwan 74.2 South Korea 69.4 Macao 68.9 Malaysia 61.2 Thailand 46.9 Sri Lanka 40.7 India 35.9 Vietnam 33.0 Country Percentile Rank China 32.5 Nepal 28.7 Mongolia 27.8 Indonesia 27.3 Philippines 22.3 Timor-Leste 18.2 Bangladesh 16.3 Lao PDR 13.9 Pakistan 12.0 Cambodia 7.7 North Korea 3.3 Afghanistan 1.0 Myanmar 0.5 Source: http://info.worldbank.org/governance/wgi/mc_chart.asp. 6
Table 2: 2010 Corruption Perceptions Index for Asian Countries Country Rank (Score) Country Rank (Score) Singapore 1 st (9.3) Hong Kong 13 th (8.4) Japan 17 th (7.8) Taiwan 33 rd (5.8) Bhutan 36 th (5.7) Brunei 38 th (5.5) South Korea 39 th (5.4) Macao 46 th (5.0) Malaysia 56 th (4.4) China 78 th (3.5) Thailand 78 th (3.5) India 87 th (3.3) Sri Lanka 91 st (3.2) Indonesia 110 th (2.8) Mongolia 116 th (2.7) Vietnam 116 th (2.7) Timor-Leste 127 th (2.5) Bangladesh 134 th (2.4) Philippines 134 th (2.4) Pakistan 143 rd (2.3) Nepal 146 th (2.2) Timor-Leste 146 th (2.2) Cambodia 154 th (2.1) Laos 154 th (2.1) Afghanistan 176 th (1.4) Myanmar 176 th (1.4) Score ranges from 0 = most corrupt to 10 = least corrupt Source: Compiled from http://www.transparency.org 7
Table 3: 2011 PERC Corruption Survey Country Rank (Score) Singapore 1 st (0.37) Hong Kong 2 nd (1.10) Australia 3 rd (1.39) Japan 4 th (1.90) U.S.A 5 th (2.39) Macao 6 th (4.68) Taiwan 7 th (5.65) Malaysia 8 th (5.70) Country Rank (Score) South Korea 9 th (5.90) Thailand 10 th (7.55) China 11 th (7.93) Vietnam 12 th (8.30) India 13 th (8.67) Philippines 14 th (8.90) Indonesia 15 th (9.25) Cambodia 16 th (9.27) Score ranges from 0 = least corrupt to 10 = most corrupt Source: Philippines corruption score worsens, ABS-CBN News, March 30, 2011. 8
The UNDP s Asia-Pacific Human Development Report, Tackling Corruption, Transforming Lives (2008) contends that petty corruption is a misnomer because it affects the daily lives of many people, especially the poor (p. 2). Varun Mishra, a software engineer in India, expressed his frustration with the daily routine of petty corrupt- ion thus: You pay for a birth certificate, a death certificate. All your life you pay. And for what? For things that should be free. Source: Jason Burke, All your life you pay. For what? For Things that should be free, Guardian Weekly, August 26, 2011, p. 3. 9
Causes of Corruption in Asian Countries 1. Low salaries of political leaders and civil servants. 2. Red tape and discretion of bureaucrats increase the opportunities for corruption. 3. Low probability of detecting corrupt offences and low probability of punishing corrupt offenders. 4. Importance of gift-saving and close family ties. 5. Lack of political will to ensure that anti-corruption agency enforces anti-corruption laws impartially. 10
Six Best Practices for Curbing Corruption 1. Do not rely on the police to curb corruption The British Colonial Government adopted a flawed approach in Singapore because it made the police responsible for corruption control even though the 1879 and 1886 Commissions of Inquiry had provided evidence of extensive police corruption. The Prevention of Corruption Ordinance enacted in December 1937 made the Anti-Corruption Branch (ACB) of the Criminal Investigation Department (CID) responsible for combating corruption. 11
The ACB was ineffective in combating corruption for three reasons: (1) It was under-staffed with only 4 officers and 13 rank and file. (2) Fighting corruption was given lower priority as the CID was concerned primarily with investigating serious crimes like murder and kidnapping. (3) It was reluctant to investigate corrupt offences by police officers. 12
The folly of the British Colonial Government s decision to make the ACB responsible for curbing corruption in 1937 was revealed in October 1951, when 1,800 pounds of opium worth S$400,000 (US$133,333) were stolen. The investigation into the Opium Hijacking Scandal by the Government revealed that several police detectives had stolen the opium. This incident forced the Government to transfer the task of corruption control from the ACB to the Corrupt Practices Investigation Bureau (CPIB), which was established in October 1952. 13
Similarly, in Hong Kong, the ACB of the CID was assigned the task of fighting corruption in 1948. In 1971, the ACB was upgraded to become the Anti-Corruption Office (ACO). On June 8, 1973, the escape of a corruption suspect, Chief Superintendent Peter F. Godber, to the UK angered the public and undermined the ACO s credibility. Godber s escape resulted in a Commission of Inquiry which had recommended the formation of an anticorruption agency, separate from the police. 14
Governor MacLehose accepted the Commission s recommendation and the Independent Commission Against Corruption (ICAC) was created on February 15, 1974. Singapore took 15 years (1937-1952) and Hong Kong took 26 years (1948-1974) to learn this important lesson. However, some countries like India continue to rely on the Central Bureau of Investigation (CBI), which is part of the police to curb corruption in spite of the rampant police corruption there. 15
Table 4: Police is most corrupt agency in six Asian Countries Country Score (1-5) Pakistan 4.5 Bangladesh 4.4 Malaysia 4.1 Taiwan 3.9 Vietnam 3.8 Philippines 3.6 Source: Global Corruption Barometer 2010 (Berlin: Transparency International, 2010), p. 43. 16
Thus, the first best practice is not to make the police responsible for curbing corruption especially when there is extensive corruption in the country. The success of Singapore and Hong Kong in curbing corruption can be attributed to their rejection of the British reliance on the police to curb corruption and the establishment of the CPIB in 1952 and the ICAC in 1974 as independent anti-corruption agencies. 17
2. Implement a Comprehensive Anti-Corruption Law A comprehensive anti-corruption law must be enacted to specify the meaning and forms of corruption, the penalties for corrupt offences, and the powers of the anti-corruption agency. This law should be reviewed periodically to remove loopholes or deal with unanticipated problems by introducing amendments or, if necessary, new laws. In Cambodia, the draft Anti-Corruption Bill was introduced in Parliament in 1994. However, it was passed after 15 years on March 11, 2010 because of the Government s lack of political will. 18
3. The Anti-Corruption Agency should be adequately staffed and funded. Fighting corruption is expensive as it requires skilled manpower, equipment, and financial resources. The government must demonstrate its political will in curbing corruption by providing the anti-corruption agency with adequate personnel and funding. Table 3 provides comparative data on the personnel and budget of eight Asian anti-corruption agencies in 2008. 19
Table 5: Comparative Data on Eight Asian ACAs in 2008 ACA Personnel Budget (US$) Staff Population Ratio Per capita expenditure (US$) ICAC 1,263 97.7 m 1:5,780 13.40 CPIB 86 11.2 m 1:56,163 2.32 ACRC 466 61 m 1:103,863 1.26 NACC 740 21.3 m 1:86,892 0.33 OMB 1,007 19.6 m 1:89,076 0.22 MJIB 840 4.02 m 1:27,262 0.18 KPK 305 18 m 1:433,888 0.08 CBI 4,874 52.1 m 1:243,373 0.04 Source: Jon S.T. Quah, Curbing Corruption in Asian Countries: An Impossible Dream? (Bingley, UK: Emerald Group Publishing), pp. 455-456. 20
4. Cut red tape to minimize opportunities for corruption Red tape creates opportunities for civil servants to solicit or accept bribes from business persons to expedite the processing of their applications for licenses or to jump the queue. In South Korea, 44 documents had to be submitted to get a permit to build a factory. This tedious process created delay and encouraged business persons to bribe civil servants to expedite their applications. The Regulatory Reform Committee set up in 1998 eliminated 5,226 regulations (48%) after its first year of operations. 21
Table 6: Ease of Doing Business and CPI Scores in 2010 Country Ease of doing business rank CPI Rank and Score Singapore 1 st 1 st (9.3) Hong Kong 3 rd 13 th (8.4) Japan 15 th 17 th (7.8) S. Korea 19 th 39 th (5.4) Bangladesh 119 th 134 th (2.4) India 133 rd 87 th (3.3) Philippines 144 th 134 th (2.4) Afghanistan 160 th 176 th (1.4) Lao PDR 167 th 154 th (2.1) 22
5. Reduce opportunities for corruption in wet agencies In Indonesia, civil servants distinguish between wet (basah) and dry (kering) public agencies. There are more opportunities for corruption in wet agencies because of their larger budgets and access to the fee-paying public. The civil servants, and particularly the police, refer to their duties as either wet or dry. Wet means you have access to the fee-paying public. Dry means you don t. Being posted to a dry position is about the worst fate any official could fear. Source: K. Loveard, Suharto: Indonesia s Last Sultan (Singapore: Horizon Books, 1999), p. 111. 23
In many Asian countries, the police, internal revenue department, customs department, and public works department are wet agencies because of their access to the public, large budgets, and ample opportunities for corruption. Corruption-prone or wet agencies must review their procedures periodically to reduce opportunities for corruption. Unnecessary red tape should be cut and cumbersome administrative procedures should be streamlined. 24
6. Punish the guilty to make corruption a high-risk, low-reward activity. Corruption thrives in those countries where the public perceives corruption to be a low-risk, high-reward activity, i.e., corrupt offenders are unlikely to be caught or punished if they are caught. Conversely, corruption can be minimized when it is perceived as a high-risk, low-reward activity when corrupt offenders are caught and severely punished. For the public to perceive corruption as a high-risk, low-reward activity, the government must publicize through the mass media the punishment of corrupt civil servants and politicians if they are found guilty. 25
Those found guilty must be punished, regardless of their status or position. If the big fish (rich and famous) are protected from prosecution for corrupt offences, and only the small fish are prosecuted, the government s anti-corruption strategy will be undermined. In 1999, Robert Beschel of the Asian Development Bank found that a person committing a corrupt offence in Hong Kong was 35 times more likely to be detected and punished than his counterpart in the Philippines. Hong Kong s more effective detection and punishment of corrupt offenders explains why it has a less serious problem of corruption than the Philippines. 26
In their comparative study of Bangladesh, India and Sri Lanka, Ahmad and Brookins found that official punitive action has seldom been taken against corrupt officials in spite of the large number of corruption reports. Table 7 shows that the percentage of corruption cases which resulted in punitive action varies from 4.4 per cent in Sri Lanka, to 10.4 per cent in Bangladesh, and 15.1 per cent in India. They concluded that genuine reform may not be had until there is greater effort to make corrupt persons accountable for their actions (p. 29). 27
Table 7: Corruption cases resulting in punishment, 1996 Country No. of Corruption Cases Corruption Cases resulting in punishment India 119 18 (15.1%) Sri Lanka 91 4 (4.4%) Bangladesh 77 8 (10.4%) Source: N. Ahmad and O.T. Brookins, On Corruption and Countervailing Actions in Three South Asian Nations, Journal of Economic Policy Reform, Vol. 7, No. 1 (2004), p. 24. 28
Conclusion Pre-conditions for implementing best practices (1) Political will to curb corruption (2) Favourable policy context Corruption cannot be eradicated overnight as combating corruption is not running a sprint but a marathon. Curbing corruption is not an impossible dream in those Asian countries with political leaders who are committed to this goal. 29
Suggestions for Further Reading 1. Jon S.T. Quah, Best Practices for Curbing Corruption in Asia The Governance Brief, Issue 11 (2004): 1-4. See http://www.adb. org/documents/periodicals/gb/governancebrief11.pdf. 2. Jon S.T. Quah, Combating Corruption Singapore-Style: Lessons for Other Asian Countries (Baltimore, Maryland: School of Law, University of Maryland, 2007). 3. Jon S.T. Quah, Curbing Corruption in Asian Countries: An Impossible Dream? (Bingley, UK: Emerald Group Publishing, 2011). 30