RECENTLY, Dr. Leloy Claudio, Richard Heydarian and I separately, and together, discussed economic growth and anti-corruption or I suppose more accurately the prevalence of corruption and how to deal with it.
The three of us agree that “kung walang corrupt, walang mahirap” is a well-meaning but misguided approach to this, that is either naïve or mere sloganeering. More effective for me is, “kung walang mahirap, bawas ang corruption.” Based on comments, some see the point and the reasoning behind it. Others (and this is so disappointing) see this as condoning corruption, which is not our point.
We are discussing what is the effective way to have a lasting reduction and wishfully, reducing corruption to negligible levels. Sadly, that concept seems to be too subtle and nuanced for some to grasp. We agree on the goal, the issue is what means are effective. Some can’t grasp that distinction and ask if we are condoning corruption. Rather than we are suggesting solutions that work based on what we have seen elsewhere! That is where our answer differs. It is only based on what happened in advanced countries and not just in Asia but in the First World as well.
In dealing with corruption, what is the most effective means? Anti-corruption drives which make anti-corruption the main policy? Or sustained economic growth with less corruption being one of the results? Or sustained economic growth with anti-corruption? I see No. 1 as well-meaning, but ineffective. Well, we had a lot of anti-corruption drives yet have gone from Janet Lim-Napoles to flood control, and if one takes the figures at face value, ghost projects costing and wasting billions to trillions in a decade. Add regulatory capture and the challenges of one side dealing with the other when one side has a vastly disproportionate level of financial resources and political influence to deploy. Protests, drives, investigations and even new laws may assuage the outrage and anger somewhat, but have there been lasting results or just a temporary hiatus in the level of corruption and a return at higher levels post a respite? That is where studying the two other options comes in. Both have worked, and the challenge is, does a government have the resources to address comprehensive industrial policy and more to provide sustained and meaningful economic growth, and deal with corruption with the same emphasis or prioritize economic growth without condoning or de-emphasizing anti-corruption?
Ideally, one should do the option of having both effective economic growth policies, and their implementation and anti-corruption. What if the resources and political capital and realities only allow one primary goal? The Philippines would in my view be in the category that can only make one the primary goal. First priority is sustained and meaningful economic growth without condoning or ignoring corruption. That has worked elsewhere in Asia in my adult life. As countries become sustainably and meaningfully richer, citizens become less tolerant of corruption, and the means to counter it become frankly affordable. You can pay your police, prosecutors and judiciary better so they can more effectively combat corruption, and it also becomes less tempting for those in a position to be corrupt to succumb to it. Look, to be clear, it does not mean the selfish and dishonest will stop being corrupt but the temptation to be corrupt is reduced. An example is Hong Kong’s ICAC, or Independent Commission Against Corruption. Let me quote a few paragraphs on ICAC from Wikipedia.
“As Hong Kong recovered after World War II, the population began to swell and manufacturing industries grew. By the 1960s, Hong Kong was experiencing economic growth, yet the government kept civil servants’ salaries very low. Officials in all departments took advantage of their positions to supplement their wages with demands for ‘tea money,’ ‘lucky money’ or substantially larger sums. Examples of corruption ranged from nursing sisters demanding money to provide services such as extra blankets, food or to allow visitors outside normal hours; firemen lived by the saying, ‘No money, no water’ and sometimes asked for money to turn off the water, preventing water damage, once a fire had been put out; officials in lands and public works departments secured huge sums of money for ‘advice’ and ‘signatures’ that procured the award of tenders and enabled developments and projects to proceed; the Royal Hong Kong Police organized entire stations to ‘make money’ from hawkers, licenses and in many other illicit schemes. Civil servants often had to pay for promotions and postings in positions known for a lucrative return.” (To counter this, salaries were also steadily increased to appropriate levels, as they did in Singapore to simultaneously complement anti-corruption).
“The Hong Kong Police Force previously had an Anti-Corruption Branch, but it did little to reduce corruption. Public perception was that anti-corruption police, following the discovery of corrupt practices, would then enter into the dealings themselves. One example was Peter Godber, a senior officer stationed at Wan Chai Police Station and later at Kai Tak Airport police station. Before his retirement in 1973, he had amassed at least HK$4.3 million (approximately $600,000) in overseas bank accounts. The police’s Anti-Corruption Branch investigated his wealth and ordered him to explain his source of income. In response, Godber immediately arranged for his wife to leave the colony, then used his police airport pass to bypass immigration and passport checks, and walked onto a plane for London. Godber’s escape led to a large public outcry over the integrity and quality of the police’s self-investigation and called for reforms in the government’s anti-corruption efforts ... The newly formed Independent Commission Against Corruption would be answerable only to the governor of Hong Kong, unlike the old police Anti-Corruption Branch. Most ICAC operations staff were sergeants recruited from specifically British police forces and were certainly not beyond sharp practices themselves. Their tactics and methods were often aggressive — they would go to a police station and take an entire shift in for questioning as a ‘fishing exercise.’ Ultimately their shock tactics were effective ... Gradually, Hong Kong transformed from a graft-ridden city into one of the least corrupt places in the world, as recognized by international institutions such as the World Bank, The Heritage Foundation and Transparency International. Some countries have looked to the ICAC as an effective model of combating graft holistically through detection, prevention and education.”
Lesson is clear, economic growth coupled with anti-corruption works. Not just the latter. Key point is the last sentence quoted which subtly makes the points for a comprehensive approach.
The author is an independent director of the state-run Maharlika Investment Corp.
We are discussing what is the effective way to have a lasting reduction and wishfully, reducing corruption to negligible levels. Sadly, that concept seems to be too subtle and nuanced for some to grasp. We agree on the goal, the issue is what means are effective. Some can’t grasp that distinction and ask if we are condoning corruption. Rather than we are suggesting solutions that work based on what we have seen elsewhere! That is where our answer differs. It is only based on what happened in advanced countries and not just in Asia but in the First World as well.
In dealing with corruption, what is the most effective means? Anti-corruption drives which make anti-corruption the main policy? Or sustained economic growth with less corruption being one of the results? Or sustained economic growth with anti-corruption? I see No. 1 as well-meaning, but ineffective. Well, we had a lot of anti-corruption drives yet have gone from Janet Lim-Napoles to flood control, and if one takes the figures at face value, ghost projects costing and wasting billions to trillions in a decade. Add regulatory capture and the challenges of one side dealing with the other when one side has a vastly disproportionate level of financial resources and political influence to deploy. Protests, drives, investigations and even new laws may assuage the outrage and anger somewhat, but have there been lasting results or just a temporary hiatus in the level of corruption and a return at higher levels post a respite? That is where studying the two other options comes in. Both have worked, and the challenge is, does a government have the resources to address comprehensive industrial policy and more to provide sustained and meaningful economic growth, and deal with corruption with the same emphasis or prioritize economic growth without condoning or de-emphasizing anti-corruption?
Ideally, one should do the option of having both effective economic growth policies, and their implementation and anti-corruption. What if the resources and political capital and realities only allow one primary goal? The Philippines would in my view be in the category that can only make one the primary goal. First priority is sustained and meaningful economic growth without condoning or ignoring corruption. That has worked elsewhere in Asia in my adult life. As countries become sustainably and meaningfully richer, citizens become less tolerant of corruption, and the means to counter it become frankly affordable. You can pay your police, prosecutors and judiciary better so they can more effectively combat corruption, and it also becomes less tempting for those in a position to be corrupt to succumb to it. Look, to be clear, it does not mean the selfish and dishonest will stop being corrupt but the temptation to be corrupt is reduced. An example is Hong Kong’s ICAC, or Independent Commission Against Corruption. Let me quote a few paragraphs on ICAC from Wikipedia.
“As Hong Kong recovered after World War II, the population began to swell and manufacturing industries grew. By the 1960s, Hong Kong was experiencing economic growth, yet the government kept civil servants’ salaries very low. Officials in all departments took advantage of their positions to supplement their wages with demands for ‘tea money,’ ‘lucky money’ or substantially larger sums. Examples of corruption ranged from nursing sisters demanding money to provide services such as extra blankets, food or to allow visitors outside normal hours; firemen lived by the saying, ‘No money, no water’ and sometimes asked for money to turn off the water, preventing water damage, once a fire had been put out; officials in lands and public works departments secured huge sums of money for ‘advice’ and ‘signatures’ that procured the award of tenders and enabled developments and projects to proceed; the Royal Hong Kong Police organized entire stations to ‘make money’ from hawkers, licenses and in many other illicit schemes. Civil servants often had to pay for promotions and postings in positions known for a lucrative return.” (To counter this, salaries were also steadily increased to appropriate levels, as they did in Singapore to simultaneously complement anti-corruption).
“The Hong Kong Police Force previously had an Anti-Corruption Branch, but it did little to reduce corruption. Public perception was that anti-corruption police, following the discovery of corrupt practices, would then enter into the dealings themselves. One example was Peter Godber, a senior officer stationed at Wan Chai Police Station and later at Kai Tak Airport police station. Before his retirement in 1973, he had amassed at least HK$4.3 million (approximately $600,000) in overseas bank accounts. The police’s Anti-Corruption Branch investigated his wealth and ordered him to explain his source of income. In response, Godber immediately arranged for his wife to leave the colony, then used his police airport pass to bypass immigration and passport checks, and walked onto a plane for London. Godber’s escape led to a large public outcry over the integrity and quality of the police’s self-investigation and called for reforms in the government’s anti-corruption efforts ... The newly formed Independent Commission Against Corruption would be answerable only to the governor of Hong Kong, unlike the old police Anti-Corruption Branch. Most ICAC operations staff were sergeants recruited from specifically British police forces and were certainly not beyond sharp practices themselves. Their tactics and methods were often aggressive — they would go to a police station and take an entire shift in for questioning as a ‘fishing exercise.’ Ultimately their shock tactics were effective ... Gradually, Hong Kong transformed from a graft-ridden city into one of the least corrupt places in the world, as recognized by international institutions such as the World Bank, The Heritage Foundation and Transparency International. Some countries have looked to the ICAC as an effective model of combating graft holistically through detection, prevention and education.”
Lesson is clear, economic growth coupled with anti-corruption works. Not just the latter. Key point is the last sentence quoted which subtly makes the points for a comprehensive approach.
The author is an independent director of the state-run Maharlika Investment Corp.
