Thursday, May 04, 2006

Culture and Corruption

Title: Culture and Corruption

Some years back we discussed the subject of corruption with Mr Madhu, a retired headmaster of a prominent residential school. We discussed the concept of sadaqa, giving alms to the poor and needy. In Islamic societies, giving alms is encouraged, “the hand that gives is better than the hand that receives”. As such we Malaysians, Muslims especially would not think twice to give alms to the poor, and whoever asks for our help. Non-Muslim Malaysians, seeing the example of good hearted Malays, also strive to emulate these qualities.
Often the fine line between sadaqa and corruption is difficult to distinguish.

Typically when we check in to a hotel, the porter would carry our luggage. When we arrive at our room, mindful that the porter is on low wage and has done a good job for us, we would give him tips as sadaqa. Never mind that it was his job to carry our luggage to our room.
We would feel sorry for the policeman who stands at intersection directing traffic in the heat of the day, never mind the exhaust fumes. If that same policeman issue you with a warning on your traffic infringement then said that he is hungry and has no money to feed his family, would you reach for your pocket?
Often, when police officers asks for our “donation” in exchange for that paper with traffic infringement written on it, would say “thank you” and ask us to “menghalalkan” the “duit kopi”. Some of them are smart enough not to ask for “duit kopi” directly, but engage us longer than necessary in idle chit chat and keep trying to find faults.
Two years ago, while I was on my way to Kuala Lumpur on a Kancil, I was stopped by a policeman somewhere between Kuala Selangor and Batang Berjuntai. He asked me for my driver’s license, so I pulled out my NZ driver’s license and said that I don’t have Malaysian drivers license, which he said that I should have a Malaysian driver’s license. Then he asked me for my IC, which I pulled out my old IC, also he pointed out that I should get my IC changed. I got the feeling that he wanted me to bribe him to let me on my way, but wouldn’t dare to ask me directly. He enquired about average wages in NZ and complained that his policeman wages is low that he could hardly live.
Is policemen wages so low that they have to ask motorists for “donation”? I shudder to think what the policeman would have done if the motorist concerned was a villager without proper license and road tax. He would probably ask outright for bribe. That would have been highway robbery.
Years ago, when I was working at a supermarket, I used to make orders for stock to sell. Every year during Ramadan, my Chinese suppliers would send me hampers and envelope stuffed with money. I didn’t ask for it. Does it constitute corruption? Of course I would view those suppliers more favourably because they sent me goodies, even better if they buy me lunch at expensive restaurant from time to time. In the beginning I used to turn down those lunch invitation explaining that I would feel guilty later. They explained to me that its part of their entertainment account. Businesses give entertainment allowance to their salesmen and managers. Money for client lunches, dinners and karaoke sessions comes from these account. These are for small accounts, peanuts.
For bigger accounts, those that involve millions of dollars, businesses would try very hard to win their clients, sometimes arranging kickbacks to purchasing manager in the client’s company. Some foreign companies that is new to Malaysia a bit na├»ve regarding the tendency of Malaysian businesses, especially those that run by Chinese Malaysians to bribe their way to win contracts or sales.
I have heard that in the early days of Isetan, back in 1990’s, a buyer got rich within a few month of working there. He only raises suspicion of his superiors when he bought an expensive car for cash.
Part of the problem is when people couldn’t differentiate between gift (sadaqa) and kickback or bribe. Just ask yourself, would you feel guilty? I have no doubt that some people would not feel guilty even if he commits murder.

Corruption could become rampant in a country if the government does its business is not transparent, and if the difference between the rich and the poor is great. An example is when government purchases are put out to tender only to a select group – like Bumiputra contractors only. Some governments set up trade barriers and impose high taxes on imports to shelter local industries, but this only encourage corruption. Industries protected by trade barriers would lobby to keep tariffs, by bribing the lawmakers, and well connected importers would bribe customs officials.
If the economy is government led, (i.e. government uses mainly fiscal policies to drive the economy) where large government projects are doled out, then corruption also become a problem.
What is the development budget for MP9? What do we get in return for printing that much money? What is the percentage that has been wasted on kickbacks and corrupt practices? We never know, because we could never prove them. But we all would shoulder the burden, because these unproductive monies (bribe and kickbacks are not earned) would come back to circulate in the economy resulting in higher inflation.
My suggestion is to improve transparency (open up the government tendering system) and remove trade barriers.
I would think that after 8 times of expansionary fiscal policies, we would have realized that the country has become more dependent of the government than ever, and we would have changed method to good macroeconomics management and use mainly monetary policies to achieve targets in income, employment and inflation.
Government should stick to its main job; guarding the nation’s natural resources, defense, ensuring fair play and providing the best in education. You be the judge if our current and past governments have done their job well.

Well these are my opinions. The jury is still out whether fiscal policies, a combination of fiscal/monetary policies or monetary policies are the best way to achieve higher income and employment.

Noor Yahaya Hamzah

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