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Asia

Corruption in Asia: A tax on the poor

The more than thousand delegates attending the 14th International Anti-Corruption Conference are being reminded of corruption’s wider cost to society, both to business and to communities.

Protesters wear traditional costumes during an anti-corruption protest in Jakarta, Indonesia

Protesters wear traditional costumes during an anti-corruption protest in Jakarta, Indonesia

The World Bank in a report released to coincide with the latest international anti-corruption conference says the cost of corruption each year worldwide is more than one trillion dollars.

The report says corruption both affected cost for business development but also crippled countries in efforts to ward off poverty as money used in corrupt payments was not being spent on job creation.

Sri Mulyani Indrawati, World Bank managing director said the consequences of corruption also go beyond simply the economic impact. "Over time it becomes a real barrier to development, innovation and business growth because sometimes the corruption is in the form of counterfeit drugs so better don’t get better or they die," he said. "Sometime corruption is a building that collapses in the face of national disaster because the quality inspector took a payment from the construction contractor to falsify an inspection. Corruption can kill."

Thai Prime Minister Abhisit Vejjajiva says there is no good corruption

Thai Prime Minister Abhisit Vejjajiva says there is no "good corruption"

No "good corruption"

But Sri Mulyani, a former Indonesian finance minister, in comments seen as targeting Indonesian politicians who resisted reforms while she was minister said while progress had been made in curbing corruption in Indonesia, there was still much to do.

"I see the transformation in my own country," said Sri Mulyani. "It is true there is much to be done still. Corruption remains intertwined with politics and there are brazen attacks on those fighting corruption. We are not alone in that regard. Nonetheless, corruption is an issue that no politician can ignore in Indonesia."

Thailand’s Prime Minister Abhisit Vejjajiva, said despite efforts in Thailand corruption remained endemic and was widely accepted within the community: "Significantly, even today young people in my country tell me that they expect to see corruption everywhere. An unbelievable percentage of people also say it is ok for politicians to be corrupt as long as they are capable of bringing economic prosperity. Rampant corruption can exist amid high economic growth. Citizens must be prudently aware that there is no such thing as 'good corruption'. "

Reports put the annual cost of corruption in Thailand at around $3.0 billion a year. In a local initiative, more than two dozen Thai companies agreed to form a collective alliance to work against corruption. The directors’ institute says as many as 200 companies can be expected to join the alliance by next year.

Indonesian protesters demanded that the president should quit over two corruption scandals

Indonesian protesters demanded that the president should quit over two corruption scandals

Corruption contributes to inequality

But for Asian Development Bank president, Haruhiko Kuroda, the economic costs of corruption have a wider impact on the community.

"Corruption is a tax on the poor," he said. "Corruption and weak governance in general undermine government revenues resulting in poor infrastructure and hinders the pace of poverty reduction. It also contributes to inequalities in access to education, health, infrastructure and other productive assets. And it is the poor and the vulnerable that inevitably bear the brunt."

U.S. Secretary of State Hilary Clinton, in a pre-recorded video statement, stressed the wider impact of corruption from business, politics, and democracy and as a factor in causing malnutrition.

But officials say while the issue of corruption was more openly discussed and legislation strengthened, enforcement remained a problem. Also for many countries where corruption remained rampant there was still some way to go to reduce its impact across societies.

Author: Ron Corben

Editor: Grahame Lucas

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