Sunday September 27, 2009

Bribe and prejudice

By JOSEPH LOH

Despite the measures taken by the Government to curb corruption, there is little change in Malaysia’s corruption index ratings. Sunday Star speaks to Transparency International (Malaysia) on why the perception remains negative.

IT takes two to tango. There will be no recipient of bribery if there is no giver. Sadly, however, where corruption is concerned, everyone thinks only of those on the receiving end. Public opinion concentrates mainly on what the receiver obtains.

“When we talk about corruption, we tend to point the finger at the civil service,” says Transparency International (Malaysia) president Datuk Paul Low.

“But by only tackling the demand side you only tackle half the issue as the other half is the giver,” he says.

Low explains that corruption covers many facets.

“It is more than just greasing the palm. It can also involve anti-competitive behaviour such as cartel price-fixing or influencing regulators.” The Global Corruption Report 2009: Corruption and the Private Sector (GCR), recently released by the Transparency International (TI), has turned a critical eye on corruption in the private sector, and how it can play an important role in fighting corruption worldwide.

In the report, Malaysian economist Dr Jomo Kwame Sundaram, assistant secretary-general for economic development in the United Nations Department of Economic and Social Affairs says that the level of corruption in the private sector remains disturbingly high.

“It is not uncommon for domestic firms and multinationals to pay bribes in order to secure public procurement contracts, nor unusual to learn of powerful corporate entities exerting undue pressure so as to capture institutions and influence regulations to elicit favourable investment conditions.

“Such practices are all too often encouraged by or met with cooperation from civil servants. We know only too well that corporate corruption significantly diminishes or threatens the dynamism and growth that comes with fair competition.”

In fact, the price of corruption to Malaysia may be as high as RM10bil a year, claims the Special Taskforce to Facilitate Business (Pemudah), citing a study by the World Bank which estimates that it is equivalent to 1% or 2% of the nation’s GDP.

Furthermore, says Pemudah, Malaysia spends only RM5 per capita to tackle corruption.

It is acknowledged that global corruption exists on a massive scale and is costing consumers billions. The GCR states that in developing and transition countries alone, corrupt politicians and government officials receive bribes estimated at US$20bil to US$40bil (RM69.2bil to RM138.5bil) annually.

Ultimately, it is the consumer who bears the cost of corruption, and the report estimates it resulted in overcharges totalling US$300bil (RM1.039tril) between 1990 and 2005.

The GCR also features a specific report on Malaysia. It mentions the launching of the (then) Malaysian Anti-Corruption Academy, and also the efforts of the Malaysian Institute of Integrity as well as the “nationwide reach” to arrest those involved in the Puspakom scandal.

However, it is critical of certain issues such as the V.K. Lingam case and follow-up to the subsequent Royal Commission findings and the “watered-down” implementation of the Independent Police Complaints and Misconduct Commission to a Special Complaints Commission.

It also reports on the Port Klang Free Zone issue, and the purported involvement of politicians, Port Klang Authority officials and Kuala Dimensi. The GCR refers to this as the “revolving door”, describing that this is “through which individuals move from government to business, or business to politics, and back again.

“In this way, significant government participation in the private sector and considerable business participation in politics means that the movement of gatekeepers to players and players to gatekeepers has a negative influence on the concept of checks and balances.”

The GCR, says Low, is not an index but is a qualitative and narrative assessment on the country’s progress in fighting corruption. He opines that bribery and corruption is a taboo subject which nobody wants to talk about, but everybody knows exists.

“In Malaysia, politics and business are all linked together. We all know and complain about it, but we don’t try to tackle it. We take for granted that it is the way Malaysia does business. This is something we have to confront.”

Besides the GCR, TI also publishes the annual Corruption Perceptions Index (CPI), which measures the perception of corruption in participating countries.

Malaysia has participated in the study since its inception in 1995 (see chart). Distressingly to some, the country’s rankings appear to be steadily declining, from the 23rd spot in 1995 to 47th in 2008.

However, that is not indicative of the actual perception, and the more qualitative measure is the CPI score, which has wavered around the midpoint mark of five (out of a maximum score of 10).

Despite measures taken to tackle corruption such as the setting up of the Malaysian Anti-Corruption Commission, Malaysia’s CPI score has not changed much.

“The perception comes from the public, and the effects of a clean government has not yet been felt. We don’t walk the talk. And people still perceive corruption exists,” Low says, stressing that perceptions are very hard to change.

“You cannot expect to tighten some screws here and there and expect it to change. You have to make drastic changes, wipe the slate clean and put the fear of God in some people.”

He pinpoints the construction sector as one of the most corrupt industries in the country.

“It includes housing development, building of highways and bridges, civil works, and anything that has a contract or tender. You have to ask – how many open tenders are there? Not for small projects, but the big ticket items.

“When you have no opacity or transparency, then it is suspect,” says Low.

Winning the fight against corruption will not be easy, and Low says it cannot be done by an individual or institution, but has to be a collective action.

He believes that a concerted effort to change has to come from the top, and a good place to start would be with Members of Parliament.

“They must think that they are elected to do a job for society and not to make money for themselves or their supporters,” Low says, adding that others at the top would include CEOs and other high-ranking civil service personnel such as directors-general.

He uses the PKFZ issue as an example.

“Datuk Seri Ong Tee Keat made the mandate to change the system. He could have said it was not his fault or his problem to handle and could have lain low. But because he is the Minister and authorised the investigation, everything fell into place,” says Low.

■ The GCR is available for download at www.transparency.org/publications/gcr

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