Public Administration in Southeast Asia: An Overview 11

Macao continues to focus on the ineffectiveness of its government and on-going corruption cases, and the chapters on Macao voice widespread concern about this.

The cases may be different, but they all show themes of central government control over local government, and the effectiveness of local government to provide governance and services. With the exception of Malaysia, they show dynamic developments occurring in these three countries and two special administrative regions in Southeast Asia.

1.5 Ethics

All public administration systems are concerned with the ethical conduct of its civil servants and elected public officials. Unethical conduct breeds distrust and is a serious distraction when trying to implement new policies and programs, while cultures of integrity are associated with increased commitment to excellence and improvements in the business climate. While the seeds of corruption lie in the human condition, the form and manner in which they are manifested show strong ties to the culture and legacy of the different countries and regions.

1.5.1 Types of Corruption

Many authors trace corruption to patron-client relations that invite different patterns in which corruption occurs. For example, Bidhya states that, “clientelism in modern T hai politics and administration (…) fosters nepotism, corruption, and bureaucratic inefficiency.”8 Gonzalez writes, “Rule of law itself is a concept that sits uneasily within the Philippine patron-client culture. Public agencies serve as conduits for capture of both policies and public resources.” The chapters are rich in detailing specific forms of corruption. Juree writes:

Examples or types of corruption involving public of f cials are numerous. Many of them are akin to corruption cases elsewhere around the world such as “kick-backs” or illegal “commission” from procurement, influence peddling, conflict of interest cases like selling own land at a higher than market value while holding a public office position. Or dictating policies or ministerial directive that will favor certain parties. Rezoning to increase land value is also one form of corruption. However, we also find that some public officials in Thailand may also engage in dishonest behavior regarding promotion and appointment. Large sums of money may change hands between the promoter/appointer and the promoted/appointee. This problem spreads like a wild fire and happens in local as well as national governments.9

8Juree describes that traditional Thai social structure centers around personal relations and hierarchical structures giving rise “to an elaborate and intricate system of patron-client relationship where status unequals entered into a mutually beneficial relationship. In this framework of human relations, developed over hundreds of years, a person’s ethical and moral duties were to be a good patron as well as to be a good client. Thai people perceived moral obligations, social norms and social values through a personal lens; ‘what is good for my patron is alright by me.’ Interpersonal ‘debts of gratitude’, favors, care and concern, payment and repayment of kindness and favors reign supreme. Obviously, such close relations are conducive to a lack of transparency and corruption in various small and large ways.”

9Bidhya also writes, “Patrons and their clients enter into an exchange relationship which fosters nepotism, corruption, and bureaucratic inefficiency. Thus, the combat of corruption becomes a gargantuan task, because corruption defined in western terms runs counter to the traditional practices of the Thai bureaucracy.” Thus, the problem of client-patron networks is deeply embedded in the Thai bureaucracy.

©2011 by Taylor and Francis Group, LLC

12 Public Administration in Southeast Asia

When one has to pay for a promotion or a specific position, it is most likely that he/she expects to extract monetary returns from the position, at least to recoup the investment. Hence, corruption increases and spreads on. Corruption pertaining to payment for a position has reached an absurd level when it is reported that at the local government level, when applicants had to undergo a competitive examination, there will be a published list of candidates ranked by the scores they have made in the test. The top on the list will be recruited first and the list will be used for sometime as positions are made available and fi lled gradually. This provides an opportunity for the lower ranking candidates to bribe the ones higher on the list to give up his/ her position thereby allowing the person below to move up the list. For a position to become available may also entail payment. Hence, to get a public sector job at the local government, a person may have to pay more than one person and for different acts before he/she gets the job.

Such sale of public sector jobs is reminiscent of the Spanish colonization of the Philippines, which involved the sale of public offices, as described earlier.

Corruption also involves elected officials. Gonzales notes that “Philippine political parties are unstable and makeshift coalitions held together only by patron-client relationships. Resources are obtained chiefly from corporate or private donations, and campaign financiers may come from the ranks of local political clans, businessmen or tycoons most of whom are often deeply involved in the formulation and implementation of policy and regulations that offer concentrated benefits as part of political paybacks by the winning (and financially supported) candidate.” Beyond this, “the power center is a centralized presidency that orchestrates the execution of policy and allocation of spoils… Because the president has discretion over disbursement and big-ticket government contracts, licensing authority, and fiscal management powers, politicians have to ally themselves with the chief executive to ensure funding for key projects and a major share in the patronage resources of the government.”10

Beh mentions quite similar issues in Malaysia, where procurement, contracts and regulations are means of corruption and rent seeking. For example, she gives this case: “Another issue is related to the recent inconsistencies in the awarding of Approved Permits (AP) to import cars where politicians were among the recipients. These Approved Permits licences have been monopolized by politically connected Malay ethnic businessmen and the politicians to import foreign vehicles and then these vehicles are resold to local businessmen who do not have access to the approved permits for imports with higher rate of at least three to four-folds.”

The source and main pattern of corruption is different in Hong Kong. As Burns notes: “In Hong Kong until 1997 the civil service managed itself almost entirely on its own: it determined its own selection procedures, disciplinary codes, performance standards and pay levels and benefits – a civil servants’ dream one might suppose. For decades these arrangements were rubberstamped by an appointed colonial legislature. The result was, at least initially, systemic corruption on a grand scale that existed until the public would tolerate it no longer and then compensation

10As an example, “Estrada’s vice-president, Gloria Macapagal-Arroyo was installed under controversial circumstances in 2001 and was elected as President in 2004, also after another disputed and contested election marred by allegations of massive cheating and manipulation. Her term was also marked by exposes of graft and corruption charges amounting to billions of pesos. President Arroyo’s stay in office was beset by a series of impeachment complaints against her, which would all be subsequently thrown out by her allies in Congress, who retained the majority.”

©2011 by Taylor and Francis Group, LLC

Public Administration in Southeast Asia: An Overview 13

packages that have become among the highest in the world.” As then, “conflict of interest in postpublic employment is another issue of perennial concern to the government and to the public. Post-service employment remains a source of concern.” This is a powerful reminder not to confuse professionalism and meritocracy, or the British heritage, with the absence of corruption.

It should be noted that these forms of corruption are certainly not unique to Southeast Asia. In Public Administration in East Asia, Lee and Jung describe that in South Korea “political elites used their regulatory power to solicit political funds from the chaebols (business groups) for the return of privileged business deals and political contributions.” Kamiko states that typical cases of corruption in Japan are related to bid rigging: “backroom intervention by government officials in the process of tender is frequently discovered,” resulting in payments to officials who can guarantee or further selection.11 Such payments include cash, as well as discounted stocks, club memberships, below-market real estate, and so on. The nature of “systematic” (or institutional) corruption is not unique to Hong Kong, and is also mentioned in Japan. Amakudari (“descent from heaven”) is mentioned as a Japanese practice of corruption where “senior bureaucrats land attractive postretirements employment in business using, as Imanaka states, “aggressive ways” to achieve this.12 Indeed, such instances and patterns occur throughout the world.

But the extent of corruption matters, of course, and most countries in Southeast Asia score low or modest, with the exception of Hong Kong and Singapore. Transparency International publishes an annual Corruption Perception Index (CPI), which measures the perceived level of public-sector corruption. In 2009, the respective indices (1 = low, 10 = high) and rankings (among 180 countries) are: Singapore: 9.2 (3rd), Hong Kong: 8.2 (12th), Macao: 5.3 (43rd), Malaysia: 4.5 (56th), Thailand: 3.4 (84th), and the Philippines: 2.4 (139th). By comparison, the United States scores 7.5 (19th), below Hong Kong, as does Japan: 7.7 (17th).13 It is thought that systematic corruption (revolving doors, legal use of regulation to favor insiders, etc.) is less visible to the public eye than illegal forms, such as those relating to bribery, kick-backs, use of insider information in procurement deals, as well as small bribes and grease payments to officials. A preponderance of the former results in higher CPI scores, and it is thought that Hong Kong, Japan, Singapore, and the United States exemplify such cases. Still, the rankings for Thailand and the Philippines are quite low and are indicative of widespread public sector corruption. As Juree states:

Corruption is commonly acknowledged as a problem, even a “disease” in Thailand today. It exists in many different forms… The size and scale of corruption range from small like petty corruption in terms of a small bribe to grand scale corruption that involves huge sums of money, as when 10–30% of the cost of a project is siphoned off from mega-projects which are often infrastructure building projects. To a certain extent, the Thai public is almost numb or have become “used to” petty corruption in everyday life. Small bribes are seen as semi-service charges to get the bureaucratic process moving. However, public attitude towards grand corruption however is much stronger then petty corruption. Especially among the educated public, information

11Sometimes competitors are in on the deal, too. By allowing each other to succeed in turn, all businesses gain a slice of the public pie, and public officials are brought under control.

12Amakudari may be offered for having given businesses preferential treatment, and those receiving are expected to secure further advantages for their new employer through their former co-workers. See: Public Administration in East Asia: Mainland China, Japan, South Korea and Taiwan, chapters 1 and 12.

13The top-rated countries are New Zealand (9.4, 1rst), Demark (9.3), Singapore and Sweden (both 9.2), Switzerland (9.0), Finland and The Netherlands (8.9). Source: http://www.transparency.org/policy_research/ surveys_indices/cpi/2009/cpi_2009_table (accessed December 7, 2009).

©2011 by Taylor and Francis Group, LLC

Public Administration in Southeast Asia: An Overview 15

ICAC also provides broad reaching education. Scott notes that the role of the ICAC – and what it means to accept an advantage – is one of the first lessons learned after joining the government. It is a message that is reinforced at various stages during the public servant’s career.14 As regards Hong Kong, until very recently, the highest levels of government were occupied by civil servants, rather than political appointees. This has recently changed, and people in Hong Kong are concerned about a possible erosion of ethics. But political appointees are the norm elsewhere, and are a source of ethical concern in countries such as Malaysia, where Beh notes that:

The common perception is that there may be little one can do about corruption particularly when it is embedded in the work systems and coexisting, the indifferent, powerful individuals who find the acts inevitable though offensive but profess innocence. Ineffective anti-corruption strategy and controls of corrupt behavior among civil servants and political leaders have not been able to remove the opportunities for corruption due to lack of political commitment and the ineffectiveness of the measures. The penalties for corrupt offences have not been prevalent as there seems to be a low probability of detecting corrupt offences and consequently the rewards for corruption are higher than the punishment for corrupt offenders… A criticism frequently made is that many of the arrests of corruption cases only involved the “small fish” (lower level of officials) and the “big fish” (syndicates, influential top bureaucrats, businessmen, and politicians) appeared unscathed.

Malaysia has seen a broad range of laws and rules, but the presence of selective enforcement and the absence of independent and effective law enforcement for all cases, has rendered progress at higher levels problematic.15 Ethics laws are strongly enforced at lower levels of the bureaucracy, but not at the higher reaches. Beh also notes that “there is lack of trained and skilled staff to investigate the numerous allegations of corruption.”

Macao’s efforts at anti-corruption are recent. While the fight against corruption began in 1975, the High Commission Against Corruption and Administrative Illegality (HCACAI) was only formally established in March 1991. Kwong notes that, “it has its own innate defect that its functions laid down by the Organization Law stipulated that it could not carry out criminal investigation on corruption matters but only on matters of administrative nature because the legislature did not allow to vest related powers.” The Commission Against Corruption (CAC) of Macao was established in 2003 and has only 109 people assigned to it. Additionally, the institutional or systematic nature of some forms of corruption (e.g., in hiring or land sales), linkages with powerful business and political interests, questioning of the impartiality of the CAC in recent cases,

14There are two principal booklets explaining what constitutes proper and ethical behavior, the Civil Servants Guide to Good Practices and Ethical Leadership in Action: Handbook for Senior Managers in the Civil Service. In both documents, the text goes into considerable detail about what it means to accept an ‘advantage’ – whether a ‘red packet’ at Chinese New Year may be accepted, whether the loan of a car is an advantage, whether taking part in a raffle may compromise official integrity and so on. Education and awareness raising occurs at all levels of the civil service.

15Additionally, a problem in Malaysia is the lack of transparency that forbids the release of information to the public that could expose wrongdoing. Beh writes that “government officials are prohibited from disclosing government information, including records of decisions and deliberations, as one could be charged under the Official Secrets Act. There is much to be lost as one could lose his/her job, pension and gratuity benefits in addition to the imprisonment of not less than a year but not exceeding fourteen years.”

©2011 by Taylor and Francis Group, LLC