Happy Chinese New Year !- say first, in case I forget.
Yesterday afternoon, we were all greeted by this rather shocking news that top officials are under investigation for "mis-conduct".. The Chinese evening papers reported that the cases involved "sex and money".....hmmm so what else is new? We shouldn't even be shock that such things happen except this is Singapore, the cleanest country on earth. Some of you may be tempted to link this to the recent salary debate - "pay top dollar still like that" but lets not be oversimplify the mechanisms involved in corruption and in many instances things are more subtle, unprovable and even legal in nature. I'm not privy to the details of the ongoing case but by the time it gets onto the papers, the authorities have probably collected plenty of evidence.
A few months ago an interest piece of information emerged in the US. A study in a book called "Throw Them All Out" showed that stock investments made by members of the Congress have out performed market averages over the long term and CBS' 60 Minutes did an expose[Link]. Its not just good investment performance but extraordinary performance - the congressmen did better than the best fund managers. Several plausible explanations have emerged - legislators make decisions that favor their investments, they have access to information not available to the public etc. Obama is now seeking legislation to prevent the congressmen from profiting from their positions[Link].
I brought up this example to show you the elements that is missing from our system to stop these more subtle forms of mis-conduct by those in office. Whether the congressmen have acted in a corruptly to fatten their pockets which cannot be proven in this case is secondary to importance of having system components in place to detect such problems. First, public access to information on the assets of office holders. This is extremely important and even Malaysia has recognized this and will require office holders to list their assets[Malaysian cabinet ministers' families may have to declare assets]. The 2nd element is good independent investigative journalism. Third is vibrant and democratic system in which the people have the power to press for change and the govt cannot hush up wrongdoing.
Singapore is viewed as one of the top few corruption-free country. This is the result of what looks like a "zero-tolerance" for corruption in govt and relatively few cases of corruption. There are places where "everyone" takes bribes especially in developing countries. Singapore and Hong Kong used to be quite bad. Good effective cleanups by anti-corruption agencies help to purge much of the corruption. However, in the past few years I notice that "traditional" under the table corruption started rising again. I follow such cases quite closely and, in many instances, by the time the CPIB steps in, the problem is quite extensive. Take the example of the case involving sea-food suppliers bribing chefs of top restaurants - the scale and widespread corruption surprised many. In the case that involved the famous loanshark "Ah Long San", numerous police officers were on the take. In the Citiraya case, the perpetrators were able to bribe everyone along the supply chain from store men, purchasers, managers etc to carry out their scam. My point is while people here don't go and look for bribes, many can be persuaded to take one "under the right conditions". While we like to believe that "Singaporeans are honest", the truth is they succumb to temptation like the people of other countries and they may more fearful than honest as they believe our police is very efficient at catching them. Recent years, however, the large influx of foreigners bringing with them the culture from back home and influencing workers here has help to undo some of positive traits in Singaporeans.
While the CPIB can go after a growing number of cases of traditional corruption, more subtle forms will prove difficult. One of these forms takes place through a "regulatory capture" in which industry hire regulators that leave govt paying them as consultants or hiring them into high positions in the company. The idea is to establish a relationship with regulators so that they are not so strict to the industry. This is hard to detect and prove because regulators acquire skill sets that is required by the industry so a certain level of such hiring is natural. Here are some examples : Revolving Door: From Top Futures Regulator to Top Futures, Regulators Hired by Toyota Helped Halt Acceleration Probes, U.S. Drilling Regulators Hired by Oil Companies. Such unhealthy relationships can build up between people doing acquisition in govt and suppliers especially in the defense industry. To detect these problems and know if an unheathy relationships are building up, the numbers have to be track. These unhealthy relationships are as harmful "women and money" type corruption. In the current case, these top officers appeared to have succumbed to lure of women and allowed a local IT supplier to circumvent standard procurement procedures. The same could have happened if an unhealthy relationship is formed, say, by the supplier routinely hiring top officers can result in influence in decision making. For the current case, it is not known who this supplier is right now but once that come to light, check its hiring record - does it routinely hire top people from govt?
A decade ago, the US implemented a law to make it illegal for US citizens give bribes when they are in other countries. This was to prevent US businesses from committing corruption in other countries in particular 3rd world countries. Businesses tried to lobby against that law arguing that they would be disadvantaged when they compete for business in some countries. Singapore businessmen learn how to get things done in China, India and Indonesia ...and very often they take those habits back home. Such practices also get here through the massive foreign influx. Our policemen are often tempted by foreigners who resort to giving money whenever they get into trouble - they come from countries where you have to learn to bribe as a matter of survival. Unless the CPIB can keep growing its capacity to combat corruption, this problem will keep growing along with more subtle forms that the CPIB does not address. We took a unbridled capitalistic approach to GDP growth and the rule of money has come to dominate our society and erode our core values. The importance of money in our society is clearly seen when a certain party finds itself unable to \find people to serve the public unless it pays the highest salaries in the world and argue that such high pay is necessary to prevent dishonesty. At some point unless we wise up, the benefits of unfettered capitalism will run out and its deleterous effects will cause decay in our society.