By Eleanor Lopez and Rosalind Chua
Clean governance has been increasingly identified as a causal factor for development, and corruption may in fact hinder it.
Donald Low,
Vice-President of the Economic Society of Singapore
“Singapore does very well in terms of economic governance. But we also have our Internal Security Act and a Printing & Publishing Act. We do not have a Freedom of Information Act, and we have libel laws which our leaders sometimes use against political opponents.”
“But to be fair to the government, it has been quite self-restrained. Not because it loves the people of Singapore, but for its own survival. Its sheer calculatedness where it knows that those laws can at best buy you resignation and sullen obedience but it can never buy you longterm success or long-term sustainable results.”
Mercenary means
“Rather than rely on those instruments of repression, the Singapore government prefers to use incentives.”
“Singapore is a state that pays a lot of attention to getting incentives right, making use of market and price signals to achieve its desired outcomes.”
“There’s congestion charging to discourage people from driving too much, how we allocate vehicle ownership rights using an auction system—we’ve been practising competitive tendering for the past 40 years.”
“It’s really a government that makes very disciplined use of economics and price incentives to shape, constrain behaviour and shape the actions of the economic actors and agents.”
Supporting the system
“At the same time it has made a very concerted effort in building trusted, credible, durable institutions that support the functioning and development of markets. There is a very strong public sentiment against any hint of corrupt behaviour.”
Photograph: Daniel Lee
Failure to adapt
“If you compare Singapore with other developing economies, we have inequality levels that are similar to those in Mexico. It’s really unbelievable that we should have such high levels of inequality considering how much fiscal resources the state has access to. There have been very few policy innovations or adaptations in the area of social spending.”
Immigration and inequality
“We’ve had an increase in the residential population by 20% over a period of 10 years. That’s unheard of even in the most virile society and it’s due to the very liberal immigration and foreign worker policy. And the effect is that they hold down wages at the bottom and they drive up wages at the top so we have this increasing gap in our income distribution.”
“We have more volatile and erratic economic growth, rising income inequality accompanied by low wage stagnation, and we’ve got a rapidly ageing population. We’ve got a very rapid pace of restructuring, in the context of relatively limited social safety nets, public housing – which was a very important instrument of redistribution that has actually become a lot less supportable – and finally, we have a far more contested and greater demand for political representation.”
Nisith Keopanya,
Director-General of the Department of Planning and Co-operation in the Ministry of Home Affairs, Laos
“Poverty has decreased from 46% during the 1990s to 27% by the late 2000s. Real economic growth remained high at eight per cent in the past year. Eighty per cent of the workforce is involved in the agricultural sector whereas only 43% of GDP is accounted for by the agricultural sector. High growth is mainly triggered by the hydropower and mining industries. Therefore, Laos enjoys large foreign direct investments (FDIs) in the hydropower, forestry, mining, and increasingly in plantation industries. Meanwhile, one-third of the population is still living below the poverty line. Thus, the impact of economic growth on reducing the poverty level in Laos is relatively modest.”
The FDI trade-off
“In attracting FDI and official development assistance (ODA), Laos plans to offer rent-seeking activities so that the non-political middle class of the new business people can benefit from this relationship. Because of the reigning non-transparent political system and the related contract negotiation, there is little incentive for the potentially political middle class to act as the voice of change.”
The challenges to clean governance
“There are essentially five main challenges: ignorant witnesses in civil service, low public sector wages, a weak bureaucracy, a lack of transparency and a lack of access to information for the determination of culpability.”
Datuk Paul Low,
President of Transparency International Malaysia
“Singapore is in the list of top five countries where corruption is perceived to be lowest, along with New Zealand, Denmark, Finland and Sweden. Malaysians always try to defend themselves, claiming that Singapore is different as they are a city-state. However, Malaysia has the same laws as Singapore. The only difference is that Singapore manages to implement these laws much better than Malaysia. They have a strong political will and thus they are able to uphold the rule of law.”
On the MACC
“To give credit to the Malaysian Anti- Corruption Commission, Malaysia’s evidence act is much stricter than its counterpart European and American acts. The anticorruption agency in Indonesia is granted immense powers, including the power to prosecute and to wiretap which enables them to conduct covert operations. Thus, they are able to obtain much more solid evidence.”
Understanding corruption
“Malaysians are fortunate and slightly complacent. The test will come when there are high unemployment rates and failures in economic policies. It is important to understand the different facets of corruption, which includes petty corruption and grand corruption. Petty corruption includes cases such as bribing the police with RM50. Transparent International is worried about this type of corruption but is not that concerned about it because this problem can be overcome by enforcement and delivery system of which the Special Taskforce to Facilitate Business (Pemudah) is doing a visibly good job.”
On the relationship between big businesses and the state
“The only way to solve this problem of collaboration is to cut off the relationship between politicians and businessmen. A politician and a businessman collaborating is the same as two drunkards going to a pub and getting a drink. It is impossible that the two drunkards will return home sober. In the case of Malaysia, there is the concept of Malaysia Incorporated. This concept is good because it shows that the government wants businesses and businesses want to be the engines of growth. However, if the level of collaboration between two parties goes beyond a certain threshold, it will become an unholy alliance.”
“Another effect of corruption is that it undermines or destroys institutional capacity. A corrupt government wants to ensure that there are no checks and balances.”