Corruption
Perceptions
in
Asia
Corruption is one of those issues that people want to know about but is difficult to get straight
answers for. An effort has been made below to explain some
background about this delicate and complex topic.
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.
When exploitive
foreigners control any country, those who defy authority by swindling the
elite are considered gallant and even heroic. The result is often a culture of
defying and circumventing authority that develops over time.
After the foreign powers departed from Asia (and most other emerging countries) after the Second World War,
the disparities remained, and possibly became more entrenched. The result was
that the habit of defying authority through corrupt practices continued. Countries such as Indonesia, Philippines,
Thailand, Vietnam, Cambodia and (less so) Malaysia have these
conditions and rank poorly in transparency by 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.
In the region of Southeast Asia, Singapore seems to have done the
most to develop a strong middle class and eliminate the large perceived
disparities 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 involving higher-level officials and is conducted
with much more discretion. Expatriates who are new to emerging
countries can often have difficulty understanding the complex processes
involved with corruption 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%
of 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. It is common for locals to use the term “overpriced” as a euphemism for corruption.
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 of the behaviour.
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 envelopes of 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
people with meagre financial resources. A typical justification
from such people 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 it doesn’t all fit in your pocket. What does it
matter to you if you give me just a little bit so I can feed my hungry
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
lifetime opportunity for corrupt officials.
Hiring
Leaders
Download
this e-book to learn all you need to know to
get the best people on your bus and drive it to greatness.
A global manager's failsafe
guide to dominating any industry
by employing its dominant
people.
DOWNLOAD Hiring
Leaders now!
New sections are being added so
check back regularly.
Send your comments and
suggestions to
hiringleaders@chalre.com
Executive Search
& Management Consulting:
Chalre
Associates provides its Executive Search and Recruiting services throughout the emerging countries of the Asia Pacific
region with specific focus on Philippines, Singapore, Malaysia, Indonesia, Vietnam, Cambodia, Laos.
We are
proactive and well known in our sectors of focus. Regional
Managers use us to help bridge the gap between local environments and
the world-class requirements of multinational corporations.
C
o n t a c t U s
+ 632 822 4129 
leaders@chalre.com
Asia
CEO Forum
Asia
CEO Forum presented by PLDT ALPHA Enterprise is the largest
regular business event in Philippines and considered one of the
most important in the Southeast Asia region. The forum serves as a
hub for the spreading of ideas that help executive managers
overseeing enterprises across the Asia Pacific region.
Attendees are both expatriate and Asian management personnel
overseeing multinational and regional organizations. Held in
Philippines, presenters are leaders in their industries and
engaged in momentous pursuits of significance to the entire
region.
Asia
CEO Forum is operated as a CSR (Corporate Social
Responsibility) activity of Chalre Associates, one of Southeast
Asia's most prominent senior management executive search firms, to
promote Philippines as a premier business destination in the Asia
region.
Click
Here to go to Asia
CEO Forum now!
Asia
CEO Awards
Asia
CEO Awards presented by Aseana City represents the
grandest alliance of local and international business people ever
created to promote Philippines on the world stage. As one of the
largest events of its kind in the Asia Pacific region, it is
considered a must-attend occasion for business leaders active in
Southeast Asia.
The star-studded Board of Judges of Asia CEO Awards give
away 10 awards to many of the most accomplished leadership teams
and individuals currently operating in Philippines and the region.
The awards recognize extraordinary leaders who have demonstrated
outstanding achievement for their organizations and contributions
to others.
As one of the fastest growing nations on the planet, the world's
business leaders have their eyes on Philippines like never before.
The annual gala was established as a natural outgrowth of Asia
CEO Forum, the largest regular networking event for the
business community in Philippines.
Click
Here
to go to Asia
CEO Awards now!
SPECIAL DOWNLOADS:
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.
Getting Ready For The
Deluge: Outsourcing in Philippines
by
Chalre Associates senior staff
Download
[PDF
file, 62KB]
The
Economist Intelligence Unit of the Economist magazine
asked Chalre Associates' Chairman, Richard Mills,
to write a chapter about the Philippine outsourcing sector
in its annual Business Guide Book. The material
provides a Executive Briefing on the progress and major
issues facing this industry that is certainly one of most
significant growth stories in the world.
more
Asia Pacific Mining
Conference 2007 - Report
by
Chalre Associates senior staff
Download
[PDF
file, 28KB]
The 7th Asia Pacific Mining Conference put on by the Asean
Federation of Mining Associations was perhaps the largest
such event in the region. Richard Mills, Chairman of Chalre Associates
gave this report on what was said by the prominent mining
people who presented.
more
The
State of BPO in Philippines: Dan Reyes Speaks
by
Chalre Associates senior staff
Download
[PDF
file, 31KB]
Richard
Mills, Chairman of Chalre Associates,
interviewed Dan Reyes of Sitel for ComputerWorld (US) recently to get
his views on the state of the BPO industry in Philippines. Dan
presented US readers with compelling information to support his view
that Philippines is currently seen as the "Number 1" option by global
companies sending BPO work to offshore destinations.
Dan Reyes is easily one of most experienced Business Process
Outsourcing (BPO) managers in the Asia Pacific region and the world. He
is head of the extremely successful Philippine operations of Sitel, the
world's largest call center organization. Among other things, he is a
founder and former president of the Business Processing Association of
the Philippines. more
