Thursday, July 19, 2007

Philippines: Local corruption level still high

Manila - Roxas Boulevard

Local corruption level still high


It is obvious that there is still a lot of work to do in the area of governance. But then again, leadership by example is the most effective means for making everyone in the bureaucracy toe the line on good governance.

The Philippine Star

So, you might ask, what else is new? Well… it is just that our fears have been confirmed by two recent studies: one from SWS and the other from the World Bank. In its 2007 Worldwide Governance Indicators (WGI), the World Bank measured six components of good governance—voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. Overall, we didn’t do that well.

Yet, countries around the world, including some of the poorest in Africa, have made “significant progress” in improving governance and fighting corruption over the decade, the new “Worldwide Governance Indicators” (WGI) study by the World Bank Institute shows. In our case, the study noted the Philippines has yet to post marked improvements in the six indicators when compared to other East Asian countries like Singapore and now, Indonesia.

But if we are looking for something in the study to make us feel a little better, study co-author Daniel Kaufmann, Director of Global Governance at the WBI said “on average, there is no evidence that governance in the world at large has improved markedly over the past decade.” In other words, we are not too bad. Just don’t compare us with our neighbors in the region because our progress pales in comparison. Indonesia, in particular, was cited for remarkable improvement under its current President Yudhoyono.

Kaufmann said “many countries have stayed behind or even deteriorated.” But even “some of the poorest ones in Africa, are deciding to move forward, and are showing to the world that it is possible to make substantial inroads in improving governance over a relatively short period of time — in less than a decade.”

Good governance, the study emphasized, matters. “Policy makers and academics agree that good governance matters for economic development. Scholars have discovered that high-quality institutions have the power, over the long run, to raise per capita incomes and promote growth in all parts of the world. And the ‘development dividend’ paid by good governance is large.”

In other words, “good governance and corruption control are fundamental for long-term growth and reducing poverty. Improving governance helps fight poverty and improves standards of living. Ten years of research show that improved standards of living are largely the result of improved governance, and not the other way around.” Citing specifics, the study found out that “when governance is improved by one standard deviation, infant mortality declines by two-thirds and incomes rise about three-fold in the long run.”

There is another dimension to good governance and this has to do with democracy. Data from the same World Bank study show that democratic accountability and clean government go hand in hand. “Countries such as Chile, Botswana, and Canada all are vibrant democracies with very little corruption, while countries with voice and accountability challenges such as China and the Russian Federation, or, more extremely, Zimbabwe and Equatorial Guinea, tend to have much more corruption.”

That makes sense. Consider how our government has ignored public opinion in the matters of political killings and corruption, negating the value of a free press, a revered democratic institution. Doing so breeds the perception of increased instability, a factor political risk analysts take into account in grading our investment worthiness.

So, now we know why we are what we are. It is no surprise the WB study noted that perceptions of the country’s political stability have deteriorated over the last 10 years. Political stability is measured by the likelihood of violent threats to, or changes, in government, including terrorism. In two other indicators—voice and accountability and fighting corruption—the study noted the perception that Philippine performance lagged behind that of most of the countries surveyed.

This brings me to a recent SWS survey that concluded: “corruption is still a problem”. The survey found out that local businessmen still think the level of corruption in the country remains high. The good news, though, is that 17 of 29 government agencies improved in their sincerity ratings to fight corruption over the last two years.

On the positive side, the 7th annual SWS Business Survey on Corruption, conducted in partnership with Makati Business Club and the Asia Foundation, also point to declining incidence of bribery for government contracts in Metro Manila. However, the survey also revealed that three of five managers were still asked for a bribe in 2006 on at least one government transaction.

Specifically, around 61percent of managers have been asked for a bribe on at least one of seven index transactions: getting local government permits and licenses (40 percent); getting national permits and licenses (37 percent); paying income taxes (33 percent); complying with import regulations (25 percent); supplying goods/services (22 percent); collecting receivables (20 percent); and availing of incentives (13 percent).

But we just grin and bear it. Few bother to report bribery. Only six percent of managers reported to authorities that they had been asked for a bribe. Sixty-nine percent of managers believe that “nothing will be done”; 49 percent were afraid of reprisal; and 48 percent believe it is “standard practice.”

Still, the ratings of almost all agencies for sincerity in fighting corruption are up in 2007, except for the Presidential Commission on Good Government (PCGG). Of 29 agencies rated, 12 are positive ratings and 17 are negative ratings. Eight rated Moderate, Good or Very Good [+11 to +50] (DTI, SSS, SC, DOH, City/Mun. gov’t, COA, Sandiganbayan, GSIS); 9 are Mediocre [-10 to +10] (DepEd, Trial Courts, Ombudsman, DBM, OP, Senate, PAGC, DA, AFP); and 12 are Poor, Bad or Very Bad [-50 to –11] (DOTC, DILG, DOJ, PCGG, DENR, PNP, LTO, House of Rep., Comelec, BIR, DPWH, BoC).

There are also “institutionalized” forms of corruption. For instance, one out of four (23 percent) said that a typical company in their sector would donate to the 2007 election campaign. The average estimated donation was P245,000. We need to be serious about electoral reform.

Filipino managers are enthusiastic about the idea of establishing a Transparency Information Bureau. It is “like a Credit Information Bureau, except that, instead of Credit Ratings, it will make Transparency Ratings on the reputation of individuals, companies, and agencies regarding honest and ethics in business.” The survey found 82 percent of the managers saying that their company would be willing, if asked by such a bureau, to give information about other people or companies regarding honesty and ethics in business.

It is obvious that there is still a lot of work to do in the area of governance. But then again, leadership by example is the most effective means for making everyone in the bureaucracy toe the line on good governance. If they see apparently overpriced multi-million dollar projects like the National Broadband getting through, the small bureaucrats are able to justify the petty graft and corruption in their own little world.

It is worrisome, though, and a matter of national honor that the World Bank has found much poorer countries in Africa starting to show remarkable improvement in governance and we are still just where we have always been. In a sense, expectations are higher for us, a middle income country that was among the first to free itself from colonialism after WW2 and is even a charter member of the United Nations. We can’t be seen as doing worse than those newly emerging countries whose problems with poverty are worse than us too.

Oh well…


Here’s something from Robin Tong.

Mekaniko: Boss, masamang balita. ‘Di ko naayos ang preno ng kotse mo. May diperensiya pa rin.

Customer: E papaano ko gagamitin ngayon, may meeting pa naman ako!

Mekaniko: Ay, sir, ginawaan ko na lang ng paraan para magamit niyo ngayon.

Customer: Anong ginawa mong remedyo?

Mekaniko: Linaksan ko ho ang busina niyo!

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