RP ‘most corrupt’ in Asia — PERC

MANILA, Philippines — Despite the much-publicized efforts by the Arroyo administration to curb corruption, foreign businessmen perceive the Philippines to be the most corrupt economy among 13 countries and territories across Asia.

The Philippines replaced Indonesia as the country with “the distinction of being perceived in the worst light this year,” the Hong Kong-based Political and Economic Risk Consultancy said Tuesday in a summary of its survey that was made available to Agence France Presse (AFP).

PERC, which provides advice to private firms and governments, polled 1,476 expatriate businessmen in the region in January and February. Of the total, more than 100 were based in the Philippines.

The survey also found some countries were failing properly to tackle corruption.

In a grading system with zero as the best possible score and 10 the worst, the Philippines got 9.40, worsening sharply from its grade of 7.80 last year. Indonesia had been deemed Asia’s most corrupt country in 2006.

PERC said it had not noted a worsening in the actual situation in the Philippines despite its deteriorating score.

“It is bad and has been bad all along. People are just growing tired of the inaction and insincerity of leading officials when they promise to fight corruption,” it said.

When asked by PERC to assess how serious the corruption problem in the public sector was, Philippine-based foreign entrepreneurs gave an average score of nine.

Private sector good

Perceived corruption in the private sector was not as bad, however.

Aside from asking the expatriates to grade corruption in the public and private sectors, PERC had them assess the effectiveness of the judiciary in fighting corruption and the tolerance of average citizens toward corruption.

In a phone interview from Hong Kong, PERC managing director Robert Broadfoot said: “Respondents gave the private sector a score of 4.15, which is quite good.”

The interviewees were mostly Western businessmen and were in the trading, banking and manufacturing industries.

When PERC noticed the discrepancy between the distrust levels for the public and private sectors, it asked other expatriates, “major” Filipino businessmen and universities to explain why the respondents gave the public sector a bad rating, Broadfoot said.

Estrada trial, raps vs Arroyo

“Cited were unresolved cases like the corruption trial of deposed President Joseph Estrada. The case has been dragging on for years. Then there’s the opposition’s [corruption and electoral fraud] charges against President (Gloria) Macapagal-Arroyo,” Broadfoot told the Philippine Daily Inquirer.

Estrada was put on trial for plunder after he was ousted in 2001. He was charged with plunder for allegedly amassing some P4 billion in payoffs from illegal gambling operations, tobacco tax kickbacks and commissions.

Calls from various sectors, including the Church, that Ms Arroyo be investigated for allegedly cheating in the 2004 presidential election remain unheeded after impeachment complaints against her were defeated in the House of Representatives twice — in 2005 and 2006.

Inappropriate to compare

Broadfoot said credible corruption trials could convince businessmen that the Philippines was serious about fighting corruption.

The PERC managing director, however, said it might be inappropriate to compare the Philippines’ corruption rating with that of other Asian countries.

“The Philippines’ score was based only on interviews of expatriates in the country. [PERC] did not ask a single group of expatriates to give scores to all Asian countries,” he said.

Broadfoot said it would be better to compare the Philippines’ current corruption rating with its previous scores.

Singapore and Hong Kong were seen as the cleanest economies, while China, Indonesia and Vietnam posted improvements, said PERC.

Thai junta

The perception of corruption in Thailand worsened, with the military junta now in power after last September’s coup seen as being little better than the government it ousted.

Thailand and Indonesia, both with a grade of 8.03, shared the spot as Asia’s second most corrupt nations.

The junta that ousted Thaksin Shinawatra as Thailand’s prime minister last year promised to fight corruption “but there is no reason to be confident that its behavior will be any cleaner,” PERC said.

On Indonesia, PERC said President Susilo Bambang Yudhoyono’s campaign to crack down on corruption had “produced some positive results, but he is still swimming against the current.”

The rankings of the 13 economies put Malaysia in the middle, marginally worse than last year.

“One of the big disappointments for many Malaysians is that Prime Minister Abdullah Ahmad Badawi has not been able or willing to follow through effectively with his campaign promise to reduce corruption,” PERC said.

Media censorship in China

China and Vietnam bettered their scores, but PERC said that the improved perception was because corruption was not being discussed openly.

“The media in both China and Vietnam are subject to tight censorship. The only bad news the governments want published is news that they see fit for public consumption,” it said.

China was the seventh most corrupt nation, according to the survey, up two places from last year. Vietnam was in 10th place out of 13, also up two places.

India was in ninth place. PERC said the Indian government must accelerate reforms, warning that corruption could limit companies’ expansion plans.

Singapore again just beat regional rival Hong Kong as the cleanest economy, although the latter posted a sharp improvement from its image in 2006.

This may have resulted from a perception that “the differences between Hong Kong and (mainland) China are even starker now,” Broadfoot said.

Singapore is becoming increasingly vulnerable to corruption elsewhere, the PERC report said, citing the soured investment by Temasek Holdings, a state-linked investment firm, in Thai telecom giant Shin Corp.

The tax-free sale of Shin Corp. to Temasek by the Thaksin family fueled the political crisis that led to the military taking power in Thailand.

Another problem, according to the report, is that foreigners “who have profited from corruption elsewhere in Asia sometimes seek a haven for their ill-gotten gains” in Singapore, where rich Indonesian families hold massive assets.

Indonesia pleased

Indonesia was pleased that its image had improved.

“I think there is enough basis for that rating, because there have now been a lot of anticorruption policies put in place,” said Teten Masduki, chair of Indonesia Corruption Watch.

He said reforms were beginning to yield results within the government, including in curbing corrupt practices and promoting transparency.

“Of course we are happy,” said Johan S.P. Budi, spokesperson for Indonesia’s National Anti-Corruption Committee.

“At least it shows the seriousness of the government in its efforts to improve its image and in curbing corruption,” he said.

Conflicts of interest

Somchai Jitsuchon, director of macroeconomics at the Thailand Development Research Institute, said he was not surprised by the findings, which related mainly to the Thaksin era.

“Circumstantial evidence has clearly shown that there is no improvement in terms of policy corruption, while emerging conflicts of interest got worse during Thaksin’s government,” Somchai told AFP.

He said policies endorsed during Thaksin’s administration overwhelmingly benefited certain business groups, especially those owned by Thaksin himself.

“Given the limited tenure of this interim government, the chance of corruption rising further is minimal. But it doesn’t mean all these bureaucrats would not become corrupt if they had a chance,” Somchai said.–Cyril Bonabente, Inquirer Agence France-Presse