29
2235
ver since that 'barren rock' began its tenuous
of decling that local corruption is no worse than to mea and methods now approaching art of the evidence submitted to Sir Alastair ted the pervasive influence of graft
CORRUPTUIN
of graft
a civil servant who, when in the Registrar-General's Depart- ment, had been "commissioned" to arrange that certain simi- larities between one of those brand-names and that of a foreign producer should be "misfiled." He had since moved to the Land Office.
Cheung Sam's profits were not based solely on his shares in the development company: he obtained commissions on the conveyancing business sent to the solicitor's firm, and fees from apartment-buyers seeking speedy handling (by the Land Office) of sale and purchase agreements so they could mortgage or otherwise dispose of rapidly-appreciating assets.
BACK at the factory where Cheung Sam had started out as a trainee book-keeper, the ageing employer - now less inclined to put in a full day's work allowed him to take charge of ordering supplies. This proved to be a goldmine: agents, whether for buttons or machines, paid Cheung a 2%-5% commission on the value of orders placed by him. He was already getting a 2.5% rake-off from the export-house “in- spection commission"; the 5%-plus conimission to depart- ment store sales managers, of course, was finding its way into his wife's pocket. Even without the takings from the supplies department, Cheung was able to bring home an extra $50,000 in tax-free cash during 1963; that year, factory purchase orders totalled about $900,000, providing him with an extra $27,000 in commissions and boosting his under-the- table earnings to $77,000. (His employer, with a labour force of just under 100 and total sales of $1.5 million, showed a net profit of $100,000. If he realised he was being robbed, he also knew he was now completely in Cheung's hands.)
At the end of 1963, believing the factory should exploit its lead in quality garment production by switching to for- eign markets, Cheung persuaded his employer to form an export company and thus sidestep the local exporters (whose commissions, anyway, kept ex-factory prices down). The capitalisation: Cheung $10,000, the solicitor's clerk $5,000, the employer $25,000- and the boss's chair.
Cheung dispatched samples worldwide, paid clerks in trade commissions, consulates and chambers of commerce to send trade enquiries his way. By December 1964 he was leasing smail factory premises and a shop. Goods removed from his employer's factory, ostensibly for dispatch as sam- ples, instead found their way (with a judicious change of labels) into Cheung's shop. Repeat contracts from mail-order houses abroad never reached Cheung's hapless employer: they were siphoned off into the moonlight factory, for
FAR EASTERN ECONOMIC REVIEW
Squeeze makes the world go round
By A Correspondent
Corruption in Southeast Asia, as elsewhere, is often condemned sweepingly as an unmitigated evil, but it is as often an unavoidable utility. The critic may condenin both but there is a substantial difference between the kickback to the politician who has already stacked away more wealth than any one human can ever use, and the "lubricant" to the ill-paid government servant which ef- fectively assists his "decisiveness" towards the great mass of the poor. Sometimes the lines of demarcation are blurred.
Singapore has put far greater political stress on the elimination of corruption than any other Asian state. Given the PAP weight plus the Government's near-total control of the situation, the disincentive is too great even for the foolhardy. Singapore is almost certainly not lily- white, but no other centre smells as clean in terms of economic corruption.
Malaysia has a more tolerant political atmosphere and there is somewhat more hanky-panky as a result. Com- pared with the other ASEAN countries, the problem of corruption is less talked about in Malaysia -- and probably there is slightly more of its today as a result. Although Malaysian democracy has been virile enough to weed out a few corrupt ministers, not enough administrative muscle has been put behind the Anti-Corruption Agency. As elsewhere, minor offenders are more likely to be caught and punished than the “big-fish.”
One hope held by businessmen in the Philippines is that, at best, martial law will frighten away corruption altogether or, at worst, confine it to only one section of the élite. Some European traders were gratified last Octo- ber to find the kickback rate had declined from 12% to 5%, but some Japanese businessmen were disappointed in January to find they were still expected to "contribute" the same 15% of total turnover as before.
"Korrupsi" has so blended into the Indonesian back- ground that right and wrong intertwine. Indonesia's cor- ruption provides some classic examples of Prof. Robert Tilman's thesis that corruption in Asia is often part of the price mechanism. The grossly-underpaid place an addi- tional price on their services, and the frantically frustrated are only too happy when such "demands" result in their getting "supply."
Thailand is one of the few places in Asia where corrup- tion is now being openly revealed, discussed, analysed. Right now the Thais, ostensibly, are passionately as against corruption as they are for democracy; both aims will be difficult to fulfil. Various forms of corruption seep through the social system. If lines are now drawn for the stricter limitation of business and political as well as military spheres of interest, an important start will have been made; an example will have been set which, with improved wages lower down the ladder, could have a "ripple" effect. But tax assessors earning as little as a miserly Bant 2000 a month when passing judgement on accounts worth millions simply cannot be expected to become angels overnight nor to surrender to the Government all the "fines" that they exact.
NOVEMBER 12, 1973
No comments yet.
Private notes are available after approval.