Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698080704596.pdf (Singapore)
ASIAN INTELLIGENCE An Independent Fortnightly Report on Asian Business and Politics No.
1,088 Wednesday March 23, 2022 REGIONAL OVERVIEW ... 2 INDONESIA ...................... 15 SOUTH KOREA .............. 26 AUSTRALIA ........................ 5 JAPAN ................................ 17 TAIWAN ........................... 28 CAMBODIA ......................... 6 MACAU .............................. 19 THAILAND ...................... 30 CHINA .................................. 9 MALAYSIA ....................... 21 UNITED STATES............ 32 HONG KONG ................... 11 PHILIPPINES ................... 23 VIETNAM ......................... 36 INDIA ................................ 13 SINGAPORE ..................... 25 EXCHANGE RATES ....... 38 POLITICAL & ECONOMIC RISK CONSULTANCY LTD. Perceptions of Corruption in Asia, the US and Australia in 20227.977.837.337.197.187.026.976.955.985.345.034.933.172.962.451.75012345678910IndonesiaIndiaThailandMalaysiaPhilippinesChinaCambodiaVietnamUSASouth KoreaTaiwanMacauHong KongJapanAustraliaSingaporeGrades are scaled from zero to 10, with zero being the best grade possible and 10 the worst.
The question asked was: “How do you grade the problem of corruption in the country in which you are working?” Political & Economic Risk Consultancy, Ltd. Issue #1,088 REGIONAL OVERVIEW Annual review of corruption in Asia – 2022 take advantage of people’s generosity.

It is not a matter of if but how extensively fraudsters will pioneer ways to use cryptocurrency to launder funds and hide the money they have scammed.

Corruption thrives in a crisis.


Such periods give scammers the opportunity to exploit people’s Governments generosity, compassion, and fear.

spend huge amounts of money very quickly and often with even fewer safeguards than usual.

Daily life is so disrupted that the opportunities for graft rise even while the risks of being caught and punished fall.
Social media and cryptocurrencies have made it easier for those acting corruptly to trick customers into making payments directly to them and avoid the monitoring of the traditional banking and financial system.

These new “tools” are used by both people acting lawyers, accountants, and agents who are willing to apply their skills to the benefit of the “dark side”.
corruptly and enablers like It's happening during the COVID-19 pandemic, and even before this crisis is over a new one has emerged from Russia’s invasion of Ukraine.

Both crises are bringing out the best and worst of humanity.

The best has been the way healthcare workers have accepted increased personal risks to care for the sick.
Neighbors are helping neighbors with unsolicited acts of kindness, and countless numbers of people have been protecting the elderly and others most vulnerable to infection in their communities by being disciplined about safe behaviors.

in countries bordering the Ukraine have opened their doors to refugees, and donors around the world are showing their generosity by digging deep into their pockets to help in the relief efforts.
Complete strangers In contrast, the worst of humanity has been exposed by those in the public and private sectors who have tried to sell fake masks and medical supplies, and those who have used their personal connections to win lucrative government contracts to provide testing and vaccination programs but never really delivered on these contracts and pocketed the money.
In the past month, as the situation in Ukraine fraudsters have already set up deteriorated, websites, fake charities, and blogs and are resorting to telemarketing and crowd-sourcing campaigns to the has that pandemic Of course, the pandemic has been so disruptive that it has reduced the scope for certain kinds of corruption.

For example, governments have had to slow major infrastructure building programs, limiting the opportunity for bid rigging.
It is no coincidence been accompanied by a slump in online gaming industries in countries like the Philippines and Cambodia that previously focused on Mainland Chinese gamblers, or that the business of selling illegal employment visas and residential permits plummeted with the closure of borders to international travel.
It is also possible that the crackdown on Russian oligarchs will reduce the ability of these people to act corruptly in the short term (except to find enablers who will help them hide their wealth and assets).
Some countries, including several of the in Asia, have shown more autocratic regimes remarkable political leadership in mounting effective national vaccination campaigns in which their populations willingly participated, and the leaders personally intervened with their strong power to reduce corrupt practices by those in positions to In exploit the health crisis for personal gain.
contrast, the like Philippines and Indonesia were much less effective and, in a few cases, have pursued policies that seem to be intentionally opaque.

Leaders used the crisis as an opportunity to grant themselves sweeping powers that curtailed civil liberties and could be used to stifle dissent, political opposition, and whistleblowers who wanted to expose some of the corruption taking place.
in other countries leaders in which For well over three decades now, we have been surveying business executives in Asia about how they perceive the problem of corruption in the Our countries respondents are a mix of expatriates and local nationals, although the latter tend to work for major international companies and banks, or else are in professional services like lawyers and accountants.

We always ask the following three questions: they are working.
Page 2 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 1.

On a scale of zero to 10, with zero representing a situation in which there is no corruption (the best grade possible) and a 10 is an extremely serious problem of corruption (the worst possible), how do you grade the problem of corruption in the country in which you are working?

2.

Compared with one year ago, has corruption (a) decreased, (b) stayed the same, or (c) increased in this country?

3.
3.

What aspects or implications of corruption in this country stand out to you as being particularly important?

We intentionally did not define “corruption” since we realize it can mean different things to different people, and we hoped to draw out some of those differences with the responses to the third question.

We also realize that there are shortcomings with this survey.

The audience could be bigger and wider, but it is the best we could do with the time and resources allowed.
Perceptions are certainly not the same thing as reality, but they are still important.

Companies base decisions on where to and where not to invest on how they perceive corruption, not how it actually exists, while due diligence and compliance processes are usually drawn up on the basis of what managers or industry regulators perceive needs to be monitored rather than on, with the benefit of hindsight, they realize they should have been guarding against.
Although the natural inclination is to rank countries based on perception levels, it is important not to read too much into such orderings.

There are biases that make such comparisons really of little value, or at least they have to be qualified.

What our survey shows is that perceptions toward corruption in Singapore are more favorable than in any other society covered by our survey, while perceptions in Indonesia this year are the most negative of all the countries covered here.
One cannot say, based on our numbers, that the actual level of corruption in Singapore is less than in Indonesia, certainly not that it is 78% less in Singapore, which is the figure arrived at by dividing Singapore’s latest score by Indonesia’s score.

On the other hand, our survey is useful for plotting how perceptions about corruption in any given country have changed over time, as well as the direction of change over the medium term.
They are useful in noting if a change in government has been accompanied by an improvement or deterioration in how corruption is perceived, and the comment section of our survey is very useful in highlighting which specific concerns are at the forefront of people’s minds, how those concerns are changing with time, and what aspects of corruption are not on their personal radar screens.

Our most recent survey was conducted in February and the first 11 days of March.
There were a total of 1,675 responses, with at least 100 responses from each society, except for Cambodia, from which we had 62 responses, and Macau, from which we had 78 responses.

All respondents were senior executives of companies or professionals in the countries they were evaluating.
The total number is in line with last year but slightly less than in previous years mainly because the COVID-19 pandemic prevented us from conducting many face- to-face take advantage of conferences to survey large groups of people at once.

We had to rely mainly on telephone calls and emails, and the majority of respondents came from the list of people who replied to surveys on corruption in years prior to the pandemic.
interviews or to We present the detailed findings from our latest survey in the country entries that follow.

The first portion of each entry is our attempt to summarize the responses, to interpret what might have been the main factors and developments behind people’s thinking, and to look at some issues shaping how perceptions might change in the coming year or how they could affect the political situation.
The second portion of each entry gives a sampling of specific responses that reflect more positive opinions about levels or trends of corruption, while the third portion gives a sampling of responses that reflect more negative opinions of corruption levels and trends.

In the case of almost all countries, there was a great deal of overlap in the specific comments.
We tried to point this out in the first summary section and, for the sake of space, consolidated the quoted responses to give readers the flavor of thinking rather than be repetitive.
March 23, 2022 ASIAN INTELLIGENCE Page 3 Political & Economic Risk Consultancy, Ltd. Issue #1,088 Changes in Perceptions over the Past Decade Regarding Corruption Australia Cambodia China Hong Kong India Indonesia Japan Macau Malaysia Philippines Singapore South Korea Taiwan Thailand USA Vietnam Total average Average excluding Australia and USA Grades range from zero to 10, with zero being the best grade possible and 10 the worst.
The specific survey question asked was: “How do you grade the problem of corruption in the country in which you are working?” Note, this is the exact same question we asked since 2015, but it is slightly different from the survey question asked in prior years when the question was phrased: “To what extent does corruption detract from the overall business environment?” Our latest survey on corruption in Asia showed that perceptions have not changed very much in the past year.
The average perception score for the Asian countries covered by this report (i.e.

excluding the US and Australia) was 5.83, three points better than last year.

Six Asian countries scored better than average, while eight scored worse.

Australia scored much better than the “average” for Asia, while the US scored slightly worse.

Perceptions in Singapore are still the most favorable of all the countries covered.

Other countries in this low-risk group include Japan and Australia.
On the other hand, Indonesia’s relatively ineffective response to the pandemic, and the damaging impact this had on the reputation of its president for not doing enough to prosecute abuses, might have been one reason why it fell to the bottom place in the perception ranking.

However, Indonesia had plenty of company – a lot more than Singapore had at the other end of the scale.

Other countries that received very poor grades included India, the Philippines, Malaysia, Thailand, and Vietnam.
In years past, Cambodia would also have been in this group of countries where corruption is perceived to be a huge problem.
To be sure, the latest survey score for the Kingdom is still very poor, but the more significant feature regarding Cambodia this year is how much its score has improved, and it is clear from the survey responses that one of the main reasons for the better score is because people were impressed with how well Cambodia’s national vaccination program was implemented once Prime Minister Hun Sen, after a slow initial start, threw his the support behind cooperation of the entire population.
Moreover, despite institutional weaknesses, respondents were impressed with how the prime minister used his personal power to prevent some departments and officials from acting as corrupt as they might have liked.

campaign and got Cambodia’s formidable the Page 4 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. Two countries where perceptions regarding corruption seem to have been driven recently by factors other than the pandemic are China and the US.
The actual levels of corruption in these two countries in terms of the dollar-amount of the problem are probably by far the largest of any of the countries covered in this report.

That is because the sizes of these two economies – first and second in the world – are so much larger than the other countries.
Corruption exists in every country, and even if places like Cambodia, the Philippines, Indonesia, Thailand, and Vietnam have a much higher percentage of their total economies that would classify as “corruption" than is the case in China and the US, the dollar-size of the problem would be larger in China and the US.
China is an interesting example because the deterioration in its score indicates that people are growing less impressed with Xi Jinping’s high-profile crackdown on corruption and seem to be more concerned with how the cases never seem to end and that many of those arrested on charges of corruption in the past year have been officials associated with fighting graft.
It hard to be optimistic about the AUSTRALIA success of the fight against corruption when those in charge of the fight are shown to be ethically challenged themselves.

also blamed The US stands out as the country covered by our survey where the problem of corruption has been most politicized.

What was noticeable from the responses was how many could be divided along political lines, with each side of this line blaming the other for being extremely corrupt.
The only thing the two sides had in common was their scores.

Both sides showed the same degree of pessimism.

Both the sides manipulation of news, and the treatment of blatant lies as truth and actual facts as lies for contributing to the environment of corruption.
While it is unclear exactly what corruption costs the US in dollar terms every year or even if it is increasing or decreasing, it is clear that it is an issue that is contributing to the polarization of society and has become so highly politicized that it is weakening confidence is some critical institutions and even in the health of the system of democracy.
lobbying, political Comments Corruption in Australia is generally perceived to be low, and people still place a great deal of faith in the country’s institutions, including its police, judiciary, and major regulatory bodies.

However, the system of checks and balances is far from perfect, and many of the 104 Australians who responded to our survey noted there is a problem of politicians at both the state and federal levels being unwilling to make themselves more accountable.
Many Australians question what happens in the shadows where favors and financing intertwine.

While the magnitude of corruption has probably not changed much in the past year, Australians are paying more attention to the issue, since it could influence the coming general elections, which must be held by May.

Mudslinging is even more rampant than usual, with accusations flying in both directions about misuse of infrastructure money, shadowy Chinese financing, and failures to report large donations.
Although two thirds of the respondents to this year’s survey did not think there had been any change in the level of corruption in the past year, the average score was the worst since 2018 and quite a large deterioration compared with last year’s score.

Many of those who responded noted that they were bothered by the decision of the Morrison government to postpone legislation on the creation of an anti-corruption body at the federal level.
The bill has been debated for years, but it is still unclear that it has enough support in Parliament to pass.

Many of those who are opposed to the bill argue that it is seriously flawed and lacks teeth.
However, from the perspective of many Australians who have watched their politicians sit on their hands for years without taking action on this legislation, they are convinced that many politicians are opposed to it because it would interfere with the ways they are accustomed to doing business and hold them to a level of accountability they are unwilling to accept.
March 23, 2022 ASIAN INTELLIGENCE Page 5 Political & Economic Risk Consultancy, Ltd. Issue #1,088 Senior coalition members of the government blame the delay in putting the bill to a vote on COVID.

They argue that the need to fight the virus has changed the priorities of the government and that time would be better spent debating bills that are more urgent.

These bills include one on religious discrimination and another on online trolling.
Many of the survey respondents have interpreted this excuse as nothing more than evidence that politicians do not want a strong, independent, and transparent anti-corruption commission to reveal practices the politicians would prefer to keep out of sight.

A sampling of the more positive responses: 1.

Elections are still fair in Australia.

There is no debate about the results being illegally manipulated the way there is in the US.
I have more faith in Australia’s election system for holding politicians to account for their behavior than I would have in a so-called independent commission on integrity.

2.

Australia’s problem is more with professional lobbyists than it is with corruption.

Money does buy influence.

3.

Continuous publicity about corruption does create a perception that its existence is widespread.
However, the image of increasing corruption in Australia might simply be a consequence of the plethora of royal commissions and semi-judicial inquiries that have been established to shed light on the problem, and the associated publicity to a few high-profile cases, rather than any real increase in the extent of the problem.

4.

Australia is tightening the screws to restrict the flow of dirty money, particularly from China.

A sampling of the more negative responses: 1.


Lobbying, political donations, and a lack of transparency in the tenders and contracts process are all problems in Australia that have not improved in recent years.

Just look at the way contracts were awarded for security services on Manus Island (which cost Australian taxpayers A$532 million).
In many cases, the practices do not classify as being illegal, but that does not make them acceptable to the public nor does it engender trust in politicians that are involved in such deals.

2.

The practice of pork barreling is as bad as ever and those guilty of such practices have tried to make “transparency” look like an evil rather than a goal worthy of pursuing in order to improve accountability.

3.
3.

The Australian way: change laws in ways that legitimize bribery, like election campaign donations and sponsorships.

4.

How can the rules of an independent commission be realistically created by the people that it is meant to probe?

When pigs fly.

I cannot take much more of the spin and no action that is so apparent under Morrison and his lot, but it would probably be the same under a different government.

5.
5.

"Money talks", "jobs for the boys" and "who you know not what you know" are increasingly evident in public service appointments and in distribution of public money.

6.

The greatest concerns with Australia’s anti-corruption regime are the country’s traditional lack of a national anti-corruption watchdog and outdated anti-money laundering laws.
CAMBODIA Comments Page 6 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. Cambodia’s institutions have been tested by the pandemic.

Change has not been easy.

In a few cases, there have been significant improvements in the way important institutions operate, but those changes have not necessarily made it easier for the public or private sector business.
The grade in our latest survey is better than last year’s score, but the majority of 62 respondents did not think there has been much of a change in the magnitude of the problem.

Some types of petty corruption have worsened, while a few other types of graft have lessened without, however, fundamentally changing the business environment.

The best example of this has been the country’s tax department.

It has undergone major reforms that have improved this institution and reduced corruption.
The department has introduced technology that has facilitated tax payments and reporting requirements by putting more of the processes online.

It has also hired more professional staff, and they have been given specific targets they are responsible for meeting at a time when the government’s financial resources were going to be severely strained by the extra burden on the government to see the country through the pandemic.

Consequently, this important government department is operating more as it should.
Corruption involved with avoiding taxes by paying officials under the table has decreased, and more funds that would in past years never have made it into the government’s coffers have been collected.

The improvement in tax collection started to become apparent in 2020, when the General Department of Taxation (GDT) (which is under the Ministry of Economy and Finance) collected 3.73% more in taxes compared to 2019 despite the recession.

In 2021, the GDT collected US$2.78 billion in taxes.
Although this was a 3.7% fall from the amount collected in 2020 (which is understandable considering the weakness in the economy last year and the way it squeezed profits of many companies), it exceeded the official target.

However, the improvement in tax collection and reduction in corruption have not necessarily made it easier for private businesses.

Raising more taxes has meant conducting more audits.
Company executives complain they are being audited far more than ever before, with tax officials first making high assessments of what the companies owe.

Companies often appeal the amounts demanded, especially in the past year when most firms reported sharply lower profits due to the overall weak business conditions.

The process of negotiating can be long and frustrating.
In the end, the government has collected more money, but it is unclear if companies have paid more or less than they would have under the former system when under-the-table payments could satisfy tax collectors relatively quickly.

However, the companies are definitely spending more time on the process, and they are finding this to be a burden.

Another institutional improvement over the past year has been an increase in checks and balances in the system.
This is because Hun Sen empowered the MEF to approve spending on new projects promoted by other government ministries and departments, including spending associated with new initiatives to fight the pandemic.

There have been instances where other government ministries balked at having their powers checked by the MEF, but in most of those cases Prime Minister Hun Sen has either intervened directly on behalf of the MEF or has openly supported the MEF’s position.
This type of intervention has helped to ensure the national vaccination program and special assistance in the form of cash handouts, direct loans, and tax incentives/deferrals have been implemented relatively efficiently during the pandemic and have not been undermined or discredited by corruption or poor implementation.

There was a concern that this might happen, but intervention by PM Hun Sen helped to limit abuses.

Despite these improvements, Cambodia still has many institutional weaknesses.
Of the major institutions of the government, one of the weakest is the judiciary, where a significant gap exists between law and practice, hurting the reputation of the entire system.

If a company or individual does encounter corruption, few are willing to seek recourse through the courts.

March 23, 2022 ASIAN INTELLIGENCE Page 7 Political & Economic Risk Consultancy, Ltd. Issue #1,088 The system of checks and balances is still weak, particularly when it relates to the military.
Last November, for example, the US State Department publicly accused several high ranking Cambodian military officers of acting corruptly by using their political influence and official power for personal benefit.

The accusations related mainly to inflating the cost of construction at Ream Naval Base and personally benefiting from the proceeds.

A sampling of the more positive responses: 1.

The legal and institutional framework for fighting corruption has been set up.
Most attention is rightly on the continuing gross inadequacies of the fight, but a start has been made and a few really egregious cases that get the attention of Prime Minister Hun Sen have prompted some action.

2.

Cambodia gets a bad rap for corruption.

Certainly, it is a problem, but its scale is more limited than in many countries that get more favorable scores in international surveys simply because the corruption is less visible in these countries.

Out of sight does not mean smaller scale.


Most corruption in Cambodia involves petty bribes by low-ranking officials trying to supplement their inadequate incomes.
It is something average people, including foreigners living in the country, personally experience every day and is therefore considered to be a big, pervasive problem when, in fact, Cambodia is largely free of kinds of massive financial frauds that are possible only in countries with more developed banking and stock market systems than Cambodia has.

It is not a place where there are massive opportunities to cheat minority investors or strain the banking system by fraudulent borrowing practices.
There are advantages to being a relatively simple, cash-based economy that often go unappreciated in the case of Cambodia.

3.

There is a lot of corruption in Cambodia, but average Cambodians are becoming less tolerant of it because of the pandemic, which has left people, especially lower income households, in an even weaker position than before to make under-the-table payments for things like healthcare, education, and permits.
Hen Sen probably recognized this inability could have led to social instability if Cambodians were pressed too hard by bodies in a position to make illicit demands (like people associated with enforcement of pandemic rules).

Consequently, there was a real effort to limit this kind of corruption over the past year and to make examples of perpetrators when corruption acts associated with the fight against COVID were uncovered.

A sampling of the more negative responses: 1.


Last November, the US government released an advisory titled “Considerations for US Companies and Organizations that Conduct Business in Cambodia within Key Sectors or in Partnership with High Risk Entities.” The US government took the unusual action of naming several senior Cambodia military officers publicly for significant corruption, making them ineligible for entry into the US.
The officials included the director-general of the Defense Ministry’s Material and Technical Services Department, the Royal Cambodian Navy Commander, along with several of their children and other relatives, for personally profiting from activities regarding the construction and updating of Ream Naval Base.

2.

The influx of Chinese investors has also brought more corruption in business dealings.
They are much less hesitant than other foreign investors to pay bribes to speed up the process of doing business, as well as to settle fines with under-the-table payments.

3.
3.

The sudden rise, followed by the sudden collapse, followed yet again by the astoundingly rapid rebuilding and remarketing of Sihanoukville is a classic example of how corruption in Cambodia can lead to booms and busts in which corners are cut, building codes ignored, and a blind eye is turned to the activities of certain criminal groups (mainly from Mainland China).

Nothing seems to have been learned from the last time the bubble burst.

It will happen again.


Page 8 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 4.

Key anti-corruption actors have insufficient political independence.

To the extent that they exist, it is mainly for public relations.

5.

The judiciary is poorly staffed, lacks integrity, and is considered by the public as highly corrupt.

CHINA Comments Two things stand out with respect to corruption in China.
First, the scale of the problem is huge in terms of its magnitude in value, the spectrum of activities in which it occurs, and the range of government levels it infects – from the lowest levels of the civil service to the heads of ministries and state-owned companies.

Second, the current government headed by Xi Jinping has mounted the toughest campaign yet to fight the problem.
While he might be criticized for also using this campaign to get rid of his rivals and to consolidate his own power, the anti-corruption campaign is a serious effort to fight corruption at all levels of the Party and the government.

However, there is no evidence yet that the scale of the problem has been reduced significantly or that any headway that might have been made to date will be lasting.
President Xi’s own words are highly critical of the level of corruption that continues to exist in China, while other official statements make it clear where some of the deficiencies lay.

For example, in February the People’s Bank of China announced that it will postpone the introduction of new rules requiring financial institutions to tighten due diligence on clients and transactions.
The new rules were intended to fight money laundering and other illegal activities in compliance with international standards.

The decision to postpone the implementation of the new rules was because the internal management systems, information systems, and business processes of banks and other financial institutions in China are inadequate.

In other words, China’s banks currently are incapable of complying with global standards.
The Central Bank gave a hint of the scale of the problem in its annual report when it noted that its anti- money-laundering monitoring center reviewed nearly 11.8 billion transactions from 4,319 institutions in 2020, an increase of 6.5% from 2019.

Suspicious transactions totaled 2.6 million, up 58%.

Chinese courts heard 6,624 cases related to money laundering in 2020, with 229 people convicted for money laundering and 15,988 for covering up or transferring gains from crimes.
Part of the reason corruption is so high in China and so difficult to eradicate is because economic growth has been so rapid for so long that the institutional checks and balances have not been able to keep up with those trying to game the system to their personal benefit.
The tough punishments meted out to those arrested and prosecuted do not seem to have deterred corrupt practices; for every corrupt official taken off the board, a new one seems to have been willing to accept the risks and fill the vacancy.

Closely related to the high growth is the huge size of China’s economy and the speed that new technology has been introduced that have created new ways to commit corruption.
Also, the more that China has expanded its trade and investment abroad, the more organized crime and corrupt individuals have participated in this expansion, generating a big increase in cross- border corruption involving China, including online gaming, money laundering, and contract bid rigging.

As big as corruption relating to the financial sector is in China, it is just a small sliver of a much bigger problem.
An indication of the other ways corruption exists in almost every aspect of society can be seen from a list of just some of the bigger cases that have surfaced since our last report.
They include a former senior inspector of the Central Commission for Discipline Inspection, the Party’s top anti-corruption watchdog; the former head of cyber operations at China’s Ministry of Public Security; the former Party chief in Hangzhou and the former deputy Party chief of Guizhou province; and a former vice-minister of public security who oversaw Hong Kong and Macau’s security matters.

We could go on for a lot longer, but you get the idea.
March 23, 2022 ASIAN INTELLIGENCE Page 9 Political & Economic Risk Consultancy, Ltd. Issue #1,088 Corruption in the corporate sector is also widespread.

The entertainment, high tech, real estate, and healthcare industries have all been involved with major corruption scandals in the past year.

Employees of China’s best known companies like Tencent and Ant Group were disciplined for a range of offenses, from offering fake online internships for money to bribing government officials for policy incentives.
The government arrested a former chairman of Norinco, China’s largest weapons manufacturer, “on suspicion of accepting bribes and making illegal gains for relatives and friends.” Public hospitals have also been caught up in several major scandals.

In the first half of 2020, at least nine senior officials in public hospitals were taken away for disciplinary investigation for receiving bribes from pharmaceutical companies, medical equipment suppliers, and other healthcare suppliers.
It is not surprising, therefore, that perceptions regarding corruption in China have deteriorated this year compared with last.

Respondents were less impressed by the large number of arrests and the intensity of the government’s anti-corruption efforts than they were by the continuing large scale of the problem.

There are respondents who think the problem of corruption has declined.

They accounted for about one quarter of the 121 respondents to our survey.
However, this was the same share as the group of people who felt corruption has deteriorated over the past year.

Half of the respondents did not think there had been any noticeable change, but the average score was worse than last year, reversing a two-year improvement in perceptions.

A sampling of the more positive responses: 1.


The pandemic had one redeeming feature: it reduced many types of cross-border crimes like money- laundering since far fewer Chinese could travel abroad to gamble and buy property.

The level of building contracts in other countries – for both infrastructure projects and condominium construction that was ultimately going to be marketed to Mainland Chinese buyers, also declined sharply.
However, the pandemic also increased other types of corruption involving China like the exportation of fake medical supplies.

2.

China will really intensify its fight against money laundering beginning this year.

3.

Cracking down on corruption buys time for the people in charge.

Since Xi Jinping is determined to stay in charge for the foreseeable, there cannot be any let-up in the high-profile fight against graft.
It has to be and will be broadened and intensified to justify Xi’s continuing hold on power.

Xi is really watching his own back, but that need not be a bad thing for China.

A sampling of the more negative responses: 1.

The past three years have seen a surge in illicit financial activities such as telephone scams, illegal fund raisings and fraud cases.

According to the Ministry of Public Security, the police handled more than 170,000 telecom fraud cases in the first 11 months of 2021.

2.
2.

In view of China’s support for Russia in its invasion of Ukraine, Beijing can forget about getting governments like the US, Australia, Canada, and the UK to give it any help on “Sky Net 2022”, the drive to repatriate corrupt officials who fled overseas and to recover their illicit assets.

If Beijing will not cooperate in putting pressure on Putin by freezing the assets of the Russian oligarchs, the West is not about to cooperate with China in dealing with its own corruption problems.

3.
3.

Note how China is cracking down on bribe takers, not bribe givers.

If the latter group are not held accountable for trying to get favorable treatments, they will have every incentive to keep doing so.

They are not the ones vulnerable to the downside risks.

Page 10 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 4.

What do the Philippines, Indonesia, Thailand, Malaysia, and Cambodia all have in common?
China figures prominently in the corruption problems of all these countries, and its role in this corruption has increased dramatically over the past decade.

5.

Removing corrupt high-level officials, while popular in the short run, does little to address the real issue for many in China, which is improving the lives of the poor by tackling issues such as price levels, the quality of healthcare, wealth distribution, and educational opportunities.
HONG KONG Comments Hong Kong has suffered a lot of reputational damage in recent years due in large part to controversy surrounding the way Beijing has increased its direct intervention in Hong Kong.

However, one institution that has come through the period with its favorable reputation largely intact is the Hong Kong Independent Commission Against Corruption (ICAC).
Unlike in the US and many other places, Hong Kong respondents to our survey did not link the trend of corruption to political changes that might have been very distasteful.

Hong Kong’s “one-country, two-system” model might have been irreparably compromised, but that does not mean Hong Kong has had to change the way its fights corruption.
In fact, the blurring of the one-country, two-system model means China is throwing its weight behind its own anti-corruption efforts in ways that are reducing some major corruption risks for the SAR.

Of the 107 respondents from Hong Kong to our latest survey, 55% indicated they do not believe there has been any change in the level of corruption in Hong Kong in the past year, one quarter said corruption has decreased, while 20% felt it has increased.
The average score was not only considerably better than last year’s score, but also it was the best score for Hong Kong since 2015.

Recent high-profile cases show the ICAC is dogged in pursuing the kinds of corruption that have existed in Hong Kong for many years.

Cases are not forgotten with time.


Early last November, for example, two ex- directors of an engineering consultancy (Albert Leung and Harry Swann) appeared in court on charges of defrauding the Hong Kong government out of nearly HK$2 million by allegedly covering up the falsification of test results on the Hong Kong-Zhuhai-Macau Bridge between July 2016 and May 2017.
A little more than one week later, the ICAC arrested retired lawmaker Chim Pui-chung and his son, charging them with fraud for transactions related to a publicly listed company almost a decade ago.

Other people have been arrested over the same plot as well as money laundering.
The ICAC acted after the case was referred to them by the Securities and Futures Commission (SFC), another body that is helping to tackle corruption from a different angle and is another reason why Hong Kong still has a good reputation for containing corruption.

From the perspective of helping to preserve the ICAC’s reputation, it is also important to note what has not happened, namely, it has refrained from getting mixed up in cases involving political activists.
The police and other departments of the government have pursued a number of such cases and secured convictions with harsh punishments.

However, these cases are being pursued on grounds other than corruption, which is helping Hong Kong avoid criticism that its authorities are using corruption charges as a way to silence and jail political critics.

There is a danger that could change.


Last November, the ICAC did arrest three activists for urging voters to cast blank ballots in the December legislative polls.

The Hong Kong government had warned that boycotting the December 19 legislative poll could violate the national security law.

It was probably a mistake to label the actions of the activists as corrupt behavior and to drag the ICAC into politics this way.
Its enforcement should March 23, 2022 ASIAN INTELLIGENCE Page 11 Political & Economic Risk Consultancy, Ltd. Issue #1,088 probably have been the responsibility of a different agency than the ICAC.

Although the arrests happened just before our survey, they were noted by a few survey respondents – whose grades were all more critical than the average score.
Labeling protest gestures like casting blank ballots or suggesting that other people do so as a form of corruption that falls under the purview of the ICAC could ultimately hurt the reputation of the ICAC or distract people from appreciating its real mandate.

The ICAC argues that it is its job to combat manipulation and sabotaging of elections and to ensure that elections are fair.
However, it is a stretch to argue that casting a blank ballot or urging others to do so is manipulating or sabotaging anything.

It doesn’t effect the outcome of the election, but only provides an insight on public opinions regarding the entire exercise.

China’s own anti-corruption campaign is helping to reduce ways that Hong Kong is becoming involved in corruption originating on the other side of the border.
Thousands of Mainland Chinese who have enriched themselves through corruption in China have fled to other countries in recent years in order to avoid arrest and prosecution in China.

Most have fled to jurisdictions where extradition can be difficult to secure (the US, Canada, New Zealand and Australia seem to be the most popular destinations).

However, Hong Kong holds no such attractions.

The new national security law allows China to arrest suspects and bring them back to China for trial.
Hong Kong still faces a major challenge dealing with the fallout from China’s crackdowns on major Mainland companies.

Some might be guilty of corruption in China, others have simply gotten too big for Beijing’s liking, or have overborrowed and flirted with insolvency.

Many, if not most, of these enterprises have listings in Hong Kong and maintain offices there, so when these firms come under scrutiny by the Mainland authorities, Hong Kong is part of the review process.
In a few cases these reviews resulted in legal action in Hong Kong and are reflected in Hong Kong’s corruption statistics, but in many other cases they are handled in China, with Hong Kong playing a supporting role to the Mainland regulatory authorities.

The impact, however, is to coordinate the fight against corruption in China with Hong Kong in ways that rarely happened just a few years ago.

A sampling of the more positive responses: 1.


The biggest success of the ICAC has been to make the Hong Kong public intolerant of corruption and to report it when they encounter it.

This has greatly reduced the problem of petty corruption and practices in which police and lower-level officials ask for payoffs from individuals.

They will be reported, investigated, and prosecuted.
The problem has shifted more from the public to the private sector over the past decade, especially involving building management companies, company departments responsible for making purchasing decisions, and hiring practices.

COVID will probably put the spotlight more on corruption in the health industry, health equipment, and the insurance sector.

2.

Hats off to the ICAC and the SFC for going after Chim Pui-chun and his gang.
Their fraud involving transactions related to a publicly listed company is not new or an indication that corruption is increasing.

Rather, their arrest is proof that the old ways of doing business are no longer tolerated.

Chim represents the old guard of Hong Kong's small local brokers, who have been in the middle of multiple scandals since the early 1980s.

They have never really changed their way of doing business.

3.
3.

The decision of the International Association of Anti-Corruption Authorities to elect Simon Peh, head of Hong Kong’s ICAC, to be the body’s new president should help ensure that Hong Kong remains engaged with other countries in an international anti-corruption collaboration in a way that preserves the SAR’s identity as being distinct from that of Mainland China.
It is also a good indication that counterpart organizations to the ICAC around the world still look at the Hong Kong body as a model other places can learn from to address the problem of corruption.

A sampling of the more negative responses: Page 12 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 1.

One negative result from the COVID-19 pandemic is that it has resulted in a major switch to online from face- to-face transactions.
While there are a lot of economic benefits from this switch, it will also stimulate abuses like fraud, money laundering, and other crimes and corruption.

Many of these abuses will develop more cross-border dimensions that are difficult to police against.

Simply sending investigators into the field has become much more difficult due to health risks and transport disruptions.

2.
2.

Using charges of corruption to punish those who mock a patriots-only election would be laughable were it not such a sad indictment of the government’s insecurity.

It is determined to act like an emperor with no clothes in order to please Beijing.

They are completely ignoring what a significant number of Hong Kong people think and trying to make it impossible even to gauge just how large a group that really is.

To encourage such transparency is now officially considered to be a corrupt act.
Very Orwellian.

3.

Hong Kong can’t have its cake and eat it too.

If the government wants to give the impression that it is holding elections, it has to accept that, in the absence of any choice that is really acceptable to them, some people might want to cast a blank ballot.

If it considers such opinions to be seditious, don’t have elections that are mainly for show in the first place.

The way the Hong Kong government has used allegations of corruption in this way is, in itself, a form of corruption.
4.

Hong Kong’s sweeping national security law has turned charges of corruption into a political weapon.

This is a regressive step that is more representative of an authoritarian state like Russia.

It is changing and broadening the definition of corruption in ways that are inappropriate.

It is also diverting attention, time and resources of bodies like the ICAC away from what should be their real fight.
INDIA Comments One of the more interesting ways that India contrasts with China is with respect to how corruption is perceived.

The level of corruption is perceived to be high in both countries at both the lowest levels of the bureaucracy and the highest level of politics.

However, the last time India’s score in our survey was better than China’s score was in 2009.

Since then, China’s score has improved gradually but steadily, while India’s score has fluctuated within a relatively narrow range.
Consequently, the perception gap has widened in China’s favor.

One of the reasons for this could be the publicity China has gotten from its anti-corruption crackdown, which began in earnest in 2013.

Every year since then, including in 2021, there have been published reports of senior officials in China being arrested on charges of corruption, and many of those officials have received very harsh sentences, including execution.
In contrast, it is extremely rare that a senior official in India is arrested on charges of corruption, let alone tried in open courts and punished for his or her crimes.

One way of interpreting this discrepancy could be that corruption is really worse in China than in India, hence the larger number of arrests of senior officials.

However, another way to look at it is that China has mounted a serious campaign to fight corruption, whereas India has been content to live with the problem as it is.
It is this latter take on the problem that seems to explain why perceptions in India remain as critical as they are.

To give India credit, the country’s Central Bureau of Investigation does publish a list of corruption cases it has registered – which is long and current.

Almost all of these cases involve local-level graft relating to bribes, examination cheating, and various corporate scams.
In this sense, it is easier to follow typical white collar corruption in India than it is in China, but these cases are too small to make international headlines the way China’s cases figure so prominently.

It is clear that India is not ignoring the problem entirely.

However, its net is selective and rarely catches the big fish the way China regularly does and publicizes.
March 23, 2022 ASIAN INTELLIGENCE Page 13 Political & Economic Risk Consultancy, Ltd. Issue #1,088 The Lokpal, India’s corruption-fighting national ombudsman, is meant to investigate allegations of corruption against public servants, including former and current prime ministers, union cabinet ministers, members of parliament, and central government officers.
In 2019-20, the year the Lokpal was established, it received 1,427 complaints; in 2020-21, it received 110 complaints, and until July 2021, no more than 30.

The Modi government might try to use these statistics to argue that it reflects how clean his government is, but this is not how most Indians see it, which is as a sign of the ineffectiveness and opacity of the Lokpal.

Three quarters of the 104 respondents to our latest survey on India indicated that corruption has stayed the same over the past year.
Most of the remainder said it has deteriorated during the pandemic, but very few respondents felt it has lessened as a problem.

In their comments, respondents were almost unanimous in saying that the problem exists at all levels.

Many people also commented that the judicial system is too slow moving to be effective in really providing a deterrent to graft, while some of these people also commented that they felt the judicial system itself is corrupt, including not just police and lawyers but also judges.
Of the scandals that do surface, it is clear that corruption touches most sectors in India, including defense, education, finance, and healthcare.

It is also not exclusively a public sector problem.

There is a lot of corruption in the private sector as well.

The fight against COVID brought out the the worst in the country.
The latter included reports of medicines being diverted to the black market, fake vaccines being used in mass inoculation events in which many of those involved did not even have the medical degrees they professed to have, the need to draw on personal connections to get a hospital bed, the way bodies were disposed, and the sale of fake vaccination certificates.

Prime Minister Narendra Modi has a reputation for being a Hindu nationalist, but he is not seen as being especially corrupt.
His much-publicized attempts to fight corruption, such as by demonetizing large banknotes, failed and were disruptive, while other reforms have legitimized certain political donations, but they have not gotten money out of politics.

Critics call this institutionalized corruption in place of under-the-table corruption.

But the problem does at least seem to have stabilized during his period as prime minister, albeit at a high level.

A sampling of the more positive responses: 1.


Indian enforcement, and investigative agencies, are active in terms of investigations/arrests and dealing with cybercrimes.

We have also witnessed regulatory changes in governance norms and an increase in accountability by way of reporting and disclosure requirements.

2.

The pandemic may have some positive points as far as the courts in India are concerned.

There is far less activity on the judicial front at all levels.
This has lengthened the backlog of corruption cases, which is a bad thing, but it has also reduced opportunities to bribe lawyers and judges, which is a good thing.

3.

An increase in reliance on technology under the Modi government has reduced the scope for evasion of income tax and GST by individuals, traders, and companies.

The shift to technological processes has reduced face-to-face interactions between the common man and government officials.

4.
4.

Corruption is as vital to getting things done in India as oil is to the running of a car engine.

A sampling of the more negative responses: 1.

Nothing has changed, only the mode of corruption, not its level.

2.

The government bureaucracy is a serious obstacle for transparency and clean business.

When the size of the civil services shrinks and there is less demand for government jobs, bribery will go down, but not before.
Page 14 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 3.

Last May and June there were fake vaccination drives around Mumbai.

The victims were injected with a saline water solution passed off as a vaccine.

4.

The faith of the common people in the judiciary has drastically eroded.

At every level, palms have to be greased, from the lowly clerks to dishonest judicial officers.

5.

Political corruption is the source of all corruption in India.
If the politicians of India were honest, the bureaucrats would have to raise their own standards.

Even if the politician is personally honest, they have to turn a blind eye to the problem when it involves the sources of money that run their party and the ethical standards of their colleagues.

6.

The participation of alleged criminals in politics is nothing new, but the share has risen sharply in recent years.

This is an indication that corruption is growing rather than diminishing as a problem.
Many of these people try to cultivate an image of being a champion of the oppressed, but they are really not much different than Italy’s mafia bosses.

INDONESIA Comments Indonesia has long grappled with the problem of corruption.

Its track record to date is very mixed – one step forward, one step back – so that even after many years, there has been no sustained improvement in perceptions.
The annual scores in our survey reflect these swings in sentiment that have left perceptions regarding the level of corruption in Indonesia little changed in the medium-term.

The latest score, 7.97, is not only worse than last year, but also the highest of any country covered by this report.

A number of respondents expressed disappointment that President Joko Widodo has not delivered on his original campaign promises to deal with the problem more effectively.
The closer the next elections approach, the more corruption is likely to grow as an issue used to motivate voters.

Mr. Widodo has not been personally tainted too much by corruption allegations, but he is criticized for tolerating abuses by others who are close to him politically and for not doing anything to prevent the legislature from passing bills that have weakened the effectiveness of the country’s anti- corruption agency, the Corruption Eradication Commission (KPK).
Of the 103 survey respondents, 46% do not think there has been any change in corruption in the past year, but 35% think it has increased, while 19% think it has decreased.

Many of those who said it has fallen argued that the pandemic has caused the government to slow work on major infrastructure projects and refrain from launching new ones and that this resulted in a big decrease in the volume of business, so there were fewer bribes and other illicit payments associated with this work.
Several also specifically mentioned the decline in investments supported by Mainland Chinese companies as a factor contributing to a fall in corruption.

Those who felt there has been no change in the high level of corruption or that it has increased even further over the past year seemed to be more bothered by the steps taken to reduce the powers of the KPK and by the lack of transparency involved with the government’s efforts to fight the pandemic, which they felt led to serious abuses.
Corruption is already becoming an election issue.

Last May, the Coordinating Minister for Politics, Law and Security, Mr. Mahfud M.D., seemed to be trying to position himself ahead of the 2024 elections by making an early appeal to Indonesians who place a heavy weight on a candidate’s promises to fight graft.
He complained about the decentralization of corruption since the Suharto days, claiming: “Now in the name of perverted democracy, corruption is no longer committed in the executive but has expanded horizontally to legislative, judicial, audit, and vertically from the center to the regions.” March 23, 2022 ASIAN INTELLIGENCE Page 15 Political & Economic Risk Consultancy, Ltd. Issue #1,088 This year started off on a positive note that generated flutters of optimism.
The governments of Indonesia and Singapore signed a new extradition treaty that, in theory, would give Jakarta the ability to repatriate corrupt Indonesians who have been hiding in Singapore.

The treaty, which still needs to be ratified by the Indonesian parliament, will cover crimes including corruption, money laundering, bribery, narcotics, and terrorism funding.

However, the new treaty is untested and may not amount to much.
From the perspective of having an impact on corruption in Indonesia, it does not give Singapore any ability to apply its own standards to address the problem of graft in Indonesia.

That will depend on the Indonesian government’s willingness to launch extradition proceedings, which is likely to be a very rare occurrence.

Indeed, Indonesia and Singapore already signed one extradition agreement (back in 2007), but the Indonesian parliament never ratified it.
Moreover, the KPK now says its top priority is recovering the funds corrupt individuals have stolen from the government not jailing such individuals, yet the new treaty will only allow Jakarta to repatriate wanted individuals from Singapore, not the assets stashed there.

They will have to be recovered through a different process.

A sampling of the more positive responses: 1.

Every once in a while, a case happens that renews faith in Indonesia’s ability to go after corruption when it really wants to.
That happened last May when the Jakarta Anti-Corruption Court found Maria Pauline Lumowa guilty of corruption and money laundering and sentenced her to 18 years jail for a major bank embezzlement case back in 2003.

She was accused by Indonesian authorities of embezzling around US$200 million after accepting loans from state-owned bank BNI using forged documents between October 2002 and July 2003.

She had been on the run for 17 years and was finally caught and extradited from Serbia.

2.
2.

KPK has become a symbol of Indonesia's war against corruption.

The organization is down, but it is certainly not out.

Moreover, the Attorney General’s Office seems to be doing more to join the fight too, judging from recent corruption cases it is handling itself, including the PT Asabri graft case and a satellite-procurement scheme by the Defense Ministry.

At the start of this year, the AGO transferred an additional 61 public prosecutors from its office to the KPK to ease the workload of the KPK.
It remains to be seen if these new prosecutors will be as dedicated to the fight as many of those who have left the KPK recently, but the fight against corruption is not being completely abandoned.

3.

Indonesia’s regulatory structure is so inconsistent at times, its bureaucrats are so slow-moving, and its institutions so weak and unreliable that corruption is not entirely an “evil” thing in Indonesia.

It can be a way to get legitimate business done faster to the benefit of the entire country.
A sampling of the more negative responses: 1.

Two different perceptions are widely held in Indonesia that underscore the problem of corruption.

This first is the impression that corruption is endemic.

The second is the perception, held just as widely, that no real political will exists inside the government or parliament to fight it.

2.
2.

The pandemic has created more opportunities for corruption as shown by scandals involving a former Cabinet member accused of mishandling of COVID welfare funds and alleged price gouging for medicines and tests.

Yet, corruption involved with the COVID pandemic and government spending to fight it has largely gone uninvestigated and therefore is more a matter of speculation than fact.
It would be very difficult for the KPK to start an investigation into graft cases involving the COVID-19 mitigation budget, since the law investigating corruption cases requires the KPK to ask involving state officials.

They might start up an investigation, but once the case starts to involve law enforcers or government officials, it will hit a roadblock.

for the president's permission before Page 16 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 3.
President Widodo is guilty of not using his authority to support the investigation of major scandals like the Jiwasraya Insurance Company fraud, which is estimated to have caused Rp 13.7 trillion (US$950 million) in state losses.

His reputation has taken a hard knock due to the involvement of members in his political circle and party coalition in graft scandals and his refusal to do anything about it.

4.
4.

Indonesian political elites have been successfully colluding over the past few years to weaken the KPK to promote their own vested interests.

The government seriously weakened the KPK last year when it ordered the anti-graft agency to be folded into the civil service and its employees to pass a special entrance exam.

Of the 75 KPK employees who failed, two-thirds were sacked, including some of the best investigators.

5.
5.

Taking a longer-term view, corruption has become less of a problem at the central level of government (like it was during the Suharto regime) and has become much more localized.

This shift might reduce the number of really huge corruption cases but it has probably made it more difficult to fight the overall problem.

People complain that the KPK has been weakened, but it might really be the wrong body to deal with the kind of corruption that is currently most pervasive in Indonesia.
The KPK has always been very centralized.

What Indonesia really needs are more effective police and institutions at the local level.

This has not materialized at all in recent years, but complaining about the KPK’s loss of powers is distracting attention away from the kinds of reform that are really needed in Indonesia.

JAPAN Comments Corruption is not perceived to be a big problem in Japan, although the latest survey score is slightly worse than last year’s score.
Of the 111 respondents from Japan, 61% said the problem has been steady, while 30% felt it had increased and the remainder said it has decreased.

The average score is one of the best of any country covered by this report.

Only Singapore’s and Australia’s are better.

While Japan’s score is much better than the US, Japan’s advantage to the US relates mainly to corruption that exists inside each country’s borders.

The US takes a harder line than Japan when it comes to fighting foreign corrupt practices.
Going by official numbers alone, certain types of graft have increased during the pandemic, and this could help explain the increase in the latest perception score.

Provisional data released by Japan’s National Police Agency shows that the number of recognized cases of specialized fraud in 2021 increased by 911 cases, or 6.7%, for a total of 14,461, marking the first increase in four years.
Financial losses resulting from such fraud came to ¥27.8 billion (US$241 million), which was ¥710 million less than the previous year.

The NPA has cautioned that the situation remains serious, with a high level of losses, especially among the elderly.

However, in view of the large size of Japan’s economy, the monetary loss is still quite small.

There have also been some recent cases where Japan has shown it can be quite tough on corruption that takes place inside Japan.
However, in very few cases are the yen/dollar amounts really large.

For example, last September a Tokyo court sentenced to four years in prison a vice-minister in charge of tourism and casino promotions after he was found guilty of taking 7.6 million yen (US$69,200) in bribes from a Chinese gambling operator that was aiming to start a casino business in Japan.
More recently, Mr. Kiyohiko Toyama, a former House of Representatives member from Komeito, the junior coalition partner of the ruling Liberal Democratic Party, admitted in court to illegally brokering loans without being registered as a money lending service provider.

Prosecutors said that Toyama, who has served as state finance minister, used to broker loans from government-backed Japan Finance Corp. based on requests from his supporters hit hard by the COVID-19 crisis.
These were not simply infrequent lapses in judgment.

March 23, 2022 ASIAN INTELLIGENCE Page 17 Political & Economic Risk Consultancy, Ltd. Issue #1,088 Toyama is accused of illegally brokering loans without required registration on 111 occasions between March 2020 and June 2021 Most of the recent corruption examples inside Japan show the system is aggressive at fighting corruption that takes place inside the country.
The level of graft may have increased during the past few years, but so have efforts to combat it.

The anti-corruption efforts have also focused on activities of foreign companies and executives in Japan, as shown by the prosecution of former Nissan head Carlo Ghosn for under-reporting his compensation, as well as an American official of the company who assisted him and two other Americans who helped him flee Japan while awaiting trial on charges of financial misconduct.
Japan’s approach to fighting corruption is weakest when it comes to foreign bribery offenses.

The OECD was particularly critical in its review published last October of Japan’s progress in implementing the organization’s Anti-Bribery Convention, noting that Japan had failed to implement the majority of the OECD’s recommendations.
The main concerns centered on Japan’s failure to pass legislation to reform its statute of limitations for foreign bribery, to substantially increase the statutory maximum fines for natural and legal persons convicted of foreign bribery, or to ensure that Japan has nationality jurisdiction over Japanese companies for foreign bribery including where a non-Japanese employee pays a bribe in a foreign country.
Japan’s actions on these measures have been limited to setting up a study group under the METI to consider whether legislative reforms were needed.

The group could not reach a consensus.

A sampling of the more positive responses: 1.

Every country, including Japan, has corruption.

However, when cases are uncovered in Japan, they are prosecuted.

It can take time before it is discovered, but at the end there are sanctions.
In more subtle, systemic types of corruption like amakudari, it requires a change in cultural thinking, but Japan is making progress in these areas too.

It is just slow and hard to measure in the short term, but it is easier to see the progress that has been made when looking back over a decade.

2.

Relationships are extremely important in Japan, especially in business.

It is easy to mistake this for corruption sometimes, and there are other times when a line is passed.
However, in general that does not happen.

Japan has mastered the art of relationship management.

People who think bribery is a short-cut to the creation and careful nurturing of a relationship in Japan couldn’t have it more wrong.

3.

The boardroom meltdown at Toshiba reveals the extremely poor governance practices that have taken root in Japan, with the complicity of METI, but it also shows how deeply ingrained practices are being reformed with time.
Sure, more reform faster would be great and probably better for the overall health of the Japanese economy, but change for the better is taking place.

What was accepted practice before is now a reason for embarrassing resignations and dismissals.

This evolution is also reflected in more recent scandals involving market manipulation.

Actions that would have gone unnoticed in the past are starting to be flagged by internal and external compliance systems for prompting mistrust in market fairness.
A sampling of the more negative responses: 1.

The Tokyo Stock Exchange suffers from significant structural issues, including a lack of transparency, poor oversight, and patchy enforcement.

This means that illegal practices like insider trading and front-running have long been tolerated and go on unchecked.

The latest example is the arrest of four executives of SMBC Nikko Securities for alleged market manipulation.
Page 18 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 2.

The Toshiba affair, which began in 2015 and continues to embarrass corporate Japan, is an example of collusion between a Japanese company and the government to suppress shareholders.

It has seriously setback perceptions regarding any progress Japan may be making in improving corporate governance.

3.
3.

Japan pays a lot less attention to stopping Japanese companies from participating in corruption outside of Japan than it does on the problem inside the country’s borders.

A recent report by the OECD noted that since 1999 and as of July 2021, only 14 individuals and two legal persons have been convicted in six foreign bribery cases, which is not commensurate with the size and export-oriented nature of the country’s economy or the high-risk regions and sectors in which its companies operate.

4.
4.

The introduction of digital is touted as a kind of magical elixir for the Japanese company, but without broad- based shifts in the whole mindset toward corporate governance, it will have zero impact on how companies are actually run.

MACAU Comments This year’s score for corruption in Macau is slightly worse than last year, but the grade is still better than its trend in the years before that.
Moreover, nearly 59% of the 78 respondents to our latest survey indicated that they believe the level of corruption has decreased over the past year.

The balance was divided between those who felt there has been no change and those who thought it has increased.
It is clear from the responses to the open-ended question asking about specific aspects of corruption that many respondents believe the pandemic-induced slump in Macau’s economy has reduced opportunities for many kinds of corruption that existed during the years of economic boom.

However, corruption is increasingly being viewed in broader terms in which Macau is vulnerable to corruption in China, not just activities that take place within the borders of the enclave.
In this sense, Macau’s corruption problem is the same as China’s, but the process of aligning the fight has been and will continue to be disruptive for Macau.

It is this disruption that could account for the deterioration in the average grade.
The past year has seen China try to eliminate the space for democratic activists in Macau and to assert tighter control over the selection of local political leaders to ensure they are all “patriots.” This move has alienated some locals as evidenced by the extremely low voter turnout in last September’s legislative elections and the jump in the number of blank and invalid ballots cast.
At the same time, a combination of Beijing’s harder line toward gambling (which is the heart of Macau’s economy) and a plunge in tourism due to the pandemic have hit the economy hard.

Pressure is on Macau to diversify its economy.

China has set the goal of developing hi-tech industry in the enclave, including the development of an integrated circuits industry, artificial intelligence, and new energy projects.
This will only happen if Beijing also pushes China’s major technology companies to invest in such facilities in Macau.

However, the growing presence of major Mainland companies in Macau and the role they are being assigned to carry the economy forward is one more way that Macau’s economy is becoming more integrated with that of the Mainland.

The governance shortcomings of these Mainland companies will carry over to Macau too.
Perhaps the most significant development affecting corruption in Macau in recent years has been the way Beijing has expanded its own fight against corruption in the Mainland to cover Macau as well.

Consequently, Macau can no longer confine its focus on fighting bribery and other graft that takes place in the awarding of March 23, 2022 ASIAN INTELLIGENCE Page 19 Political & Economic Risk Consultancy, Ltd. Issue #1,088 government contracts and other abuses committed within its physical borders.
It must now look at its role in facilitating corruption in Mainland China and work closely with the Chinese authorities to fight this problem.

There has been a crackdown on junket operators who have made it possible for high rollers from the Mainland to gamble in Macau.

Such operators have also been accused of trying to develop online gaming.

China is pushing the Macau government to impose more supervision over the operations of legal casinos in Macau.
In response, the local government has also announced that gaming licenses renewals are not guaranteed and it has proposed that the shareholding levels of Macanese directors in the concessionaires from the current 10% be raised to 15%.

While these moves are unpopular with the foreign investors in Macau gaming industry, Beijing seems to be limiting the space for corruption to exist.
Increased scrutiny by Mainland China officials on capital outflow, coordinated with greater scrutiny by Macau officials on capital inflow and on capital repatriated from Macau, could reduce the flow of illegally-obtained money from China to Macau.

Of course, the negative side of this crackdown could be, as in the past, an interruption to the growth of gambling revenues.
It is also possible that the intervention in the way Macau’s legitimate casinos conduct their business could open the door for different types of corruption by individuals or groups in positions to personally benefit from the new restrictions to which legitimate foreign investors in Macau’s gaming industries will be subjected.

The licenses of six casino licenses are due to expire at the end of this year, a six-month extension of the original deadline.
The government wants to give the legislature this extra time to enact a new gambling law, which will change betting regulations.

The authorities will also use the time to complete the tender process for renewing licenses.

Investors are concerned that, despite the government’s best intentions, changing the ground rules might create opportunities for corruption that slips in under the guise of increasing oversight or localization.

A sampling of the more positive responses: 1.


It was no coincidence that Macau police detained the city’s biggest casino junket operator last November at the end of a 45-day consultation period to change gaming rules, including additional government oversight.

It was also one day after Mainland authorities issued an arrest warrant for the operator over his suspected involvement in running illegal cross-border gambling activities.
The operators have also been behind the creation of online betting businesses targeting gamblers in the Mainland.

Xi Jinping’s corruption crackdown has required Macau to comply more with what Beijing considers to be corrupt rather than what Macau considers to be.

The impact is to reduce Macau’s ability to facilitate corruption, money laundering, and other illegal activities in China.

2.
2.

The pandemic’s negative impact on the economy has severely depressed opportunities for corruption in real estate transactions.

The moribund real estate market has no room for graft the way years of a booming local property market did.

No one is going to give officials enticements for licenses, permits and code cutting when the market is as depressed as Macau’s is currently.
Similarly, no one is going to make under-the-table payments for visas to bring in foreign workers when companies are shedding jobs.

On the other hand, there might be more bribery being used now as the means for securing a job, contract renewal or promotion.

3.

My score for corruption in Macau is worse this year than last not because the actual problem is worse but because behavior that was previously allowed is now being treated as illegal.
In other words, the list of acts that classify as corruption is longer than before.

A sampling of the more negative responses: Page 20 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. 1.

For years, Macau’s corruption was a factor of the unprecedented free-wheeling economic boom.

Those days are over.

However, corruption will not go away.


It will just be forced to take different forms, mainly involving finding ways to profit from the misery of those who are being hurt by new rules that force changes in the way business is done or to gain an unfair advantage in securing a job or contract at a time of scarcity rather than plenty.

2.

Macau is becoming more tightly regulated politically and economically.
This will almost certainly slow the rate of economic growth, but it may not reduce corruption any more than years of Xi Jinping’s corruption crackdown in China has ended the problem there.

The only difference now is that Macau’s corruption problem is starting to look like it is one and the same as China’s problem.

3.
3.

Other than the local anti-corruption agency, Macau lacks access to external “whistleblowers” like a strong political opposition or independent media that frequently expose abuses in more developed democracies.

Other anti-corruption bodies like the Monetary Authority are increasingly taking their cue from Mainland China regulators.
This gives the fight against corruption in Macau a political dimension that is more in line with the priorities of the government in Beijing than with Macau’s best interests.

MALAYSIA Comments For years, perceptions regarding the level of corruption in Malaysia painted too positive a picture.
For much of the period between the founding of the state investment fund 1MDB in 2009 and its collapse in 2015, annual perceptions scores actually improved and Malaysia was ranked in the middle or upper half of countries in the region in terms of corruption.

However, it fell off this pedestal once 1MDB imploded and the government headed by Prime Minister Najib Razak lost power, ending its ability to try to cover up the scandal.
The scale of the corruption quickly became apparent, and Malaysia’s reputation suffered damage that will be very difficult to repair.

It is no longer a middle-ranking country in terms of how corruption is perceived, but a place that is right up with other poorly ranked countries like the Philippines, Indonesia, and India.

The latest score is the fourth worst of all countries surveyed.
Slightly more than half of the respondents said corruption had stayed the same over the past year, while just under half believe it has increased.

None of the governments that have come into power since the fall of the Najib government have made headway in improving how people in Malaysia perceive corruption.

So much dirty laundry has been aired and yet so few big fish have been held accountable that suspicions run deep about there really being a will to change.
This skepticism is fortified by the way trials against Mr. Najib seem to be never-ending; how Mr. Jho Low, the elusive Malaysian financier at the center of the 1MDB affair, has been able to avoid capture and arrest; and how many of the UMNO politicians who held office during the Najib government are still in senior positions today.

The slowness with which the wheels of justice in Malaysia have turned regarding 1MDB cases highlights continuing institutional weaknesses in Malaysia.
Respondents to our survey continue to see the courts as being vulnerable to political interference.

The Malaysian Anti-Corruption Commission, the national anti-graft agency, is another institution that has been unable to polish its tarnished reputation.

For months now it has been wrestling with its own scandals, the latest one being alleged improper share trading by Chief Commissioner Azam Baki between 2015 and 2016.
These scandals have also hurt the image of the country’s Securities Commission, which was supposed to investigate the allegations but would only say that its findings were “inconclusive”.
While Azam Baki framed the Securities Commission’s findings as “conclusive that he did not March 23, 2022 ASIAN INTELLIGENCE Page 21 Political & Economic Risk Consultancy, Ltd. Issue #1,088 commit an offense,” critics claim the SC’s inability to act against Azam means the section of the law governing proxy trading is “impotent and broken.” Since the collapse of 1MDB and now with the pandemic, economic conditions in Malaysia have been so difficult that there has been less scope for corruption, particularly in big government tenders.
There is a risk that opportunities for corruption could increase if Malaysia enjoys a boom in earnings from oil and other commodity prices.

Such a windfall would reduce the need for fiscal austerity, while the desire to shape the outcome of the next elections could be another factor that adds to corruption in Malaysia in the coming two years.

On the other hand, the rise in US dollar interest rates means that days of cheap money are over.
Because of 1MDB, Malaysia has already suffered serious reputational damage with major foreign sources of funds and international investment banks.

These institutions will be much more careful about future business dealings they have with Malaysia.

A sampling of the more positive responses 1.

I really don’t think much has changed about corruption in Malaysia in terms of the willingness of politicians holding political power and businessmen close to them to use public funds to enrich themselves.
However, there have been two changes acting more as checks on abuses in Malaysia than before.

One is the rise in online discussion groups and news organizations that can publicize abuses that were previously never allowed to be reported on in tightly controlled local broadcast and print media.

A second is the growing attention to foreign corrupt practices in other jurisdictions like Singapore, the US, and the UK.
Many of the biggest cases of corruption in Malaysia have a cross-border dimension, and other jurisdictions can put the spotlight on these cases despite the strongest attempts by the Malaysia authorities to hide them from view.

2.

A small but nevertheless important example of an attempt by Malaysia to prevent corruption in the first place was its launching a mobile app once anti-COVID vaccines became available that verified the authenticity of digital and printed COVID vaccination certificates.

3.
3.

The Malaysian population is patient, but it is not blind or indifferent to corruption.

Ethics have not disappeared in Malaysia, and average Malaysians will remain a check on abuses.

The adage: “You can fool part of the people some of the time, you can fool some of the people all of the time, but you cannot fool all the people all of the time,” applies very much to Malaysia.

The elite just keep forgetting it.

A sampling of the more negative responses: 1.


Poor legislative oversight over the budgets of major government departments, including defense, roads and transport, and health, low competitive bidding for procurements, a lack of data transparency, and limited channels through which to address complaints all raise corruption risks in Malaysia.

2.
2.

The string of Najib loyalists who have been cleared of corruption charges that were brought following the 2018 election shows how corruption goes unpunished in Malaysia and how the courts at one level or another can be manipulated to prevent real accountability.

3.
3.

The lawsuit brought by Anti-Corruption Commissioner Azam Baki against a local journalist for writing an online article questioning the legality of his past share trading activities is another example of how dangerous it can be for whistleblowers in Malaysia.

Azam’s excuse that it is his brother’s shares, not his, is lame and really does more to erode his credibility with the public than to enhance it.

4.
4.

The old UMNO is making a comeback and, in the process, will exonerate Najib and others from the 1MDB scandal.
Sure, I could be wrong and Najib might serve the rest of his life in jail, while the remnants of UMNO Page 22 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. might fold into some other Malay parties and emerge a “cleaner” organization than before, but it very much looks like the Kluster Mahkamah will use the next elections to find their way back to political power, unbowed, unrepentant, and unreformed.
PHILIPPINES Comments Corruption remains a big problem in the Philippines.

This year’s survey score is slightly worse than last year, but the main takeaway from our survey is that the country has not made any real headway in fighting the problem through several presidencies.

The scale of the problem as it exists today is much the same as it was when Rodrigo Duterte was first elected president back in 2016 on the strength of a campaign that promised execution of drug dealers and other criminals.
He did follow through with this promise, but the impact on the magnitude of the drug and crime problem does not appear to have fallen, and corruption has largely gone unaddressed.

New problems emerged during the pandemic, especially involving the awarding of contracts for the purchase of masks and other medical supplies.

President Duterte has responded to most of these charges by accusing his critics of playing politics ahead of the coming elections.

No major cases have gone to court.


There are a lot of reasons why the perceptions about corruption in the Philippines are as high as they are and why 80% of the 106 respondents to our latest survey do not think there has been any decrease in corruption over the past year.

One is that the real level of the problem is high and law enforcement is not only weak but also a central part of the problem, with both police and the court system tainted by corruption.
Some institutions are notorious for being involved with corrupt acts like payoffs, smuggling, and bribes.

They include Customs, the Bureau of Internal Revenue, and the Department of Budget and Management.

There are also systemic and legal deficiencies that facilitate certain types of corruption like money laundering and online crime.
Other reasons perceptions are bad have less to do with reality than with systemic and cultural features like a relatively free press that give rumors a public airing, a free-wheeling political system that encourages mudslinging as a way to hurt the credibility of rivals, and a culture based on personal relationships and patronage.

Some of these characteristics have admirable qualities, but they invite abuses like corruption.

They are also highly resistant to reform.


Corruption might actually have worsened during the past two years because of the opportunities for graft created by the pandemic.
However, the recession has also reduced certain opportunities for other types of corruption like smuggling (the volume of imports is way down), tendering on major public works projects (other than healthcare, work on other types of infrastructure projects has slowed), and visas for foreign workers (the online gaming industry, which was a major employer of Chinese, has been one of the industries hit hardest by the pandemic, reducing demand for such visas, as workers have returned home).
There might even have been a decrease in some of the most petty types of corruption involving very low level officials and lower-income Filipinos, since people have been too poor to make even small payoffs.

Perhaps the most significant force influencing corruption perceptions in the near term will be the coming elections.

The three-month campaign kicked off last month.

At stake is the presidency, 12 senate seats, 177 Congressional seats, and more than 18,000 local government positions.
This is one of the few times in the Philippines when the direction of money flows is from aspiring office holders to average Filipinos and people capable of influencing election outcomes.
March 23, 2022 ASIAN INTELLIGENCE Page 23 Political & Economic Risk Consultancy, Ltd. Issue #1,088 Because of the difficult economic conditions, there might not be as much election money sloshing around as there has been in typical elections in the past, but corruption will still be in the spotlight, and those campaigning for positions will be trying to emphasize how “clean” they are going to be and how “corrupt” their rivals are.
Unsubstantiated rumors and allegations will be rife, which will have a negative impact on how corruption is perceived in the short term.

A sampling of the more positive responses: 1.

There was some corruption involved with the pandemic but reports in the media greatly exaggerated the problem.

President Duterte was correct when he said those making such accusations were trying to gain political mileage ahead of this year’s national, local and congressional elections.
Critical senators like Richard Gordon have failed to produce any evidence to back up their allegations of corruption in government purchases of protective masks and face shields.

2.

The Philippines is not as corrupt as some developed countries where companies spend billions of dollars to influence government policy, court decisions favor those with the deepest pockets, and a single Ponzi scheme can exceed the combined value of all the corruption in the Philippines in any given year.

3.
3.

The cost of corruption needs to be put in perspective.

If you want to get a building permit in the US or Europe, how much would you pay?

If you are fined for speeding or drunk driving, you will need to appear in court and pay a hefty fine.

In the Philippines, you can pay a cop or inspector a small amount of pesos and you’re on your way.

That seems pretty efficient to me.

If corruption is so bad and costly, why is the Philippines so much cheaper than countries where corruption is said to be low?
A sampling of the more negative responses: 1.

There is no real political will by those who have the power to do anything about corruption.

This is not a new problem that is unique to the Duterte government.

It has been a problem for all previous administrations too.

The best one can say about corruption in the Philippines is that it was worse during the Marcos regime, so taking a very long perspective, one can say there has been an improvement.
But it is hard to argue that conditions today are better or worse than they were when Corazon Aquino became president in 1986.

That’s a long time to be marking time.

2.

The Department of Health spent 42.4 billion pesos (US$812.5 million) in COVID-19 programs and provided no supporting documents for such expenditures.

There are also allegations of corruption in the Department of Budget and Management’s awarding of government contracts to companies with no track record.
Reports of scandals and embezzlement at a time when millions of Filipinos are going hungry and health workers are struggling during a pandemic have pushed President Rodrigo Duterte’s credibility to an all-time low.

3.

The state auditor has flagged "deficiencies" involving 67.3 billion pesos (US$1.29 billion), casting doubts on the regularity of related transactions in the country's pandemic response.
The rise of Pharmally Pharmaceuticals Corp., which won up to 11 billion pesos worth of supply contracts for medical supplies in 2020, is jaw breaking.

4.

One runs for office here for power and wealth, NOT TO SERVE THE PEOPLE!

People will pay bribes to become civil servants, mainly because it is viewed as a secure job with excellent benefits (another word for corruption).

Military & police are very corrupt.

Business owners are quick to give bribes.

5.

Filipinos are not really ready to end corruption.


If they were, politicians would not be able to buy votes so easily.

Using the power of the office and gifts are common at all levels of government in the Philippines.

Page 24 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. SINGAPORE Comments There has been little change in the grade for how corruption is perceived in Singapore.
The score is several points worse than last year, but it is still the lowest of any country covered by this survey and the comments were very similar to previous years, noting how corruption exists but what distinguishes Singapore is the government’s determination to prosecute cases when they are uncovered and the standards maintained by political leaders in their personal behavior.
The most outstanding features of our latest survey, which included 113 respondents, was the very narrow range of scores, with the vast majority being between one and three.

None were higher than five.

The second most outstanding feature was that more than 75% of the respondents – more than in any other country – felt the level of corruption had not changed in the past year.

However, most of the remainder felt there has been a deterioration in the problem.
They did not blame the government for becoming more lax in its anti-corruption efforts.

Rather, they noted that they felt there has been an increase in online scams.

This accounted for the small deterioration in the score.
One point that was raised consistently in the responses is that new technology, the pandemic, and Singapore’s growth as a financial center (particularly for trading commodities and for managing wealth of people from other countries) have increased the range of corrupt activities and the scale of fraud cases.

Policing against corruption is therefore a growing challenge.
It is not a battle that is being won, but, on the positive side, it is being managed at a level that is maintaining trust in the country’s institutions and its overall business environment.

Online scams are one type of corruption with which many individual Singaporeans have personal experience.

Ones that involve gaining access to bank accounts are a new feature of this problem.
A different dimension of corruption that some respondents cited was not something most have experienced personally but that they have read about in the media concerning fraud involving trading and investing activities.

One case that surfaced early last year involved a Singaporean who was accused of fraud amounting to S$1 billion in which he allegedly swindled the money selling nickel deals that never took place.
This was the first time that investment fraud in Singapore has touched the billion dollar mark, making it an example of how the size of individual cases might be increasing as the volume of overall business grows.

Although there are cases of civil servants being investigated and prosecuted for corruption, these are infrequent.

Most corruption cases in recent years have been confined to the private sector.
Assets under management in Singapore have swelled to well over US$4 trillion (mainly reflecting inflows from overseas).

The government has had considerable success attracting wealthy family offices from overseas jurisdictions (so-called Variable Capital Companies) to use Singapore as a gateway for their Asian investments.
Most of this is sound business that is good for the investors and for Singapore, but it is also vulnerable to abuse, and this is one reason the need for greater due diligence has increased substantially.

Risks for new financial scandals are probably increasing.

This year is not so much a period when corruption is likely to surface as it is to grow undetected.
That is because the war in Ukraine, sanctions against Russia, the rise in US dollar interest rates, supply chain disruptions, the growth of virtual assets or digital payment tokens, and US-China tensions will cause greater than usual commodity price and exchange rate volatility.

It is easier for unscrupulous people to commit fraud and cheat during such periods than it is when trading conditions are calm and there are fewer market distortions.
Wide price swings mean big profits, but they also mean big losses.

Every crisis brings blow-ups.

Eventually, however, there will be corrections when it is impossible to hide massive losses and pyramid schemes collapse.
History has shown that when such corruption March 23, 2022 ASIAN INTELLIGENCE Page 25 Political & Economic Risk Consultancy, Ltd. Issue #1,088 comes to light, Singapore will not try to hide it the way several other governments in the region have tried to do (such as Malaysia with 1MDB), but Singapore’s extremely strong approach to fighting corruption will not shelter it entirely from corruption fallout, any more than London, New York, or Hong Kong are protected.
Their size and free-market features that make them attractive to legitimate investors and traders ensures that they are also exposed to abuses, often to the same scandals.

A sampling of the more positive responses: 1.

Corruption in Singapore seems to be most frequent in financial trading activities and online scams.

Government bribery and contract rigging have been effectively squashed.
The challenge facing Singapore in limiting financial sector corruption is that it needs to strike a balance between the flexibility that is required to be competitive as a financial and trading center and the surveillance that is needed to prevent abuses.

So far, the authorities are doing a pretty good job in working with banks in Singapore to improve the governance and monitoring framework, but the job is not going to get any easier.

2.
2.

Fighting corruption has been on the top of the government’s agenda board since independence.

PAP leaders have applied high standards to themselves, and they have also supported the anti-corruption work of institutions like the CPIB and MAS by staying out of their way, staffing them with professionals, and giving them the budgets they need to be effective.

3.
3.

The secret to Singapore’s economic success (as well as its social and political stability) is that it has taken great care never to allow the baby to be thrown out with the dirty bath water.

The babies have been the island’s commodity, stock, and other markets that define its role as a business center.

The government has nurtured their growth.

The dirty bath water is the corruption that invariably can materialize in these markets.
The government does a great job getting rid of it when it spots the dirt.

A sampling of the more negative responses: 1.

Costs and risks of investing in Singapore are increasing because of the growing need to conduct due diligence.

This can be very difficult, as shown by the prominent local lawyers and investors who would normally be considered very experienced who were on the list of victims of recent investment frauds at Envy Asset Management and Envy Global Trading.

2.
2.

Singapore is likely to play a leading role in the development of trading systems involving cryptocurrencies, which means it will play an important global role in setting the global standards for regulating this new financial vehicle.

However, it is also likely to be the location where the potential for cryptocurrencies to facilitate illegal transactions also take place initially.

Many of the examples for misuse will be uncovered only after they have taken place in Singapore first.

3.
3.

Combatting the illegal use of cryptocurrencies is going to be one of the biggest future compliance challenges.

4.

SMS phishing scams targeting bank customers are increasing.

Banks are trying to strengthen security, but this will take time, which means it is mainly up to customers to increase their own vigilance against scams.
SOUTH KOREA Comments While corruption remains an important issue in Korea and certainly was a factor shaping the outcome of the most recent presidential election, it was not the dominant feature of the election the way it was in the last Page 26 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. one, which followed a massive scandal that resulted in the conviction and jailing of former President Park Geun- hye for taking bribes from big businesses in exchange for preferential treatment.
This month’s elections focused more on which candidate voters concluded could do a better job of addressing income inequality, job creation, housing problems, and economic woes caused by COVID-19.

However, it is possible that corruption was the deciding factor that tipped the scales in the latest extremely close contest in favor of former prosecutor Yoon Suk-heol.

His fame and popularity grew from the key role he played in placing two former presidents in jail for corruption and abuse of power.
His challenger in the recent election, Lee Jae-myung, could also have been hurt by mudslinging that focused on criminal convictions for misrepresenting himself as a prosecutor while working as a lawyer, and for allegations of being involved in a property kickback scandal.

Although Mr. Yoon in his campaign promised to investigate the out-going administration of Moon Jae-in for excess, it is more likely that he will avoid trying to make the fight against corruption his top priority.
Firstly, he probably recognizes that Korea needs to break with the past and not make it so every out-going leader needs to fear criminal prosecution after he leaves office.

This is bad for Korea’s reputation and the image of the quality of its democracy.
Secondly, he will have more pressing priorities to address, including economic problems, an increasingly belligerent North Korea, fallout from the global sanctions against Russia, and pressure from the US to solidify their alliance to be in a better position to stand up to both Russia and China.

Thirdly, he will need the support of the legislature, which is still controlled by the opposition, if he is to have any success in getting bills passed.
His initial priority will have to be to reduce divisions that had been widened by the election campaign.

He will not be able to do this or be effective as president if he becomes locked in a fight to prosecute the out-going government for corrupt acts or abuse of power during its term of office when the public appetite for such a vendetta is not particularly high.

Our latest survey gave Korea a slightly better grade on corruption this year.
Moreover, the trend of perceptions has been improving ever since 2018.

This indicates that the administration of Moon Jae-in, despite criticism for ineffectiveness in some areas, has made some progress in reducing concerns about corruption in Korea.

Whether this is due to any of his own policies or to the absence of major scandals like the kind that led to large public demonstrations that eventually brought down the Park government is debatable.
The Anti- Corruption and Civil Rights Commission has put in a lot of effort both to reduce certain types of corruption and to improve perceptions.

In our most recent survey, which was conducted in the midst of the election campaign, slightly more than half of the 117 respondents did not notice any change in the problem, while 30% felt there has been an improvement or decrease in corruption, and less than 20% thought it has worsened.
On the negative side, one point that drew the most comment was that the chaebol’s excessive influence on politics remains at the root of many of the corruption problems and that the magnitude of this problem has really not changed very much in recent years.
On the positive side, a slightly smaller but still sizable group of respondents noted that Korea’s record for prosecuting corruption even at the highest levels shows that it is making a real effort to fight the problem and that its institutions are gaining strength and independence.
Another aspect of corruption in Korea is the extent that Korean companies are guilty of acting corruptly in the way they conduct their overseas businesses, especially in high-risk countries like Vietnam where Korean companies have been investing heavily.

As is the case in Japan, Korea has laws banning foreign corrupt practices, but it rarely implements them.

However, that could be changing.


In February 2022, the US Securities and Exchange Commission (SEC) announced the first Foreign Corrupt Practices Act (FCPA) settlement of the year.
The case involved Seoul-based KT Corporation (KT Corp.), South Korea’s largest telecommunications operator, March 23, 2022 ASIAN INTELLIGENCE Page 27 Political & Economic Risk Consultancy, Ltd. Issue #1,088 which agreed to pay US$6.3 million to resolve charges that it violated the FCPA by providing improper payments for the benefit of government officials in Korea and Vietnam.
This settlement follows on the heels of South Korean authorities having indicted 14 KT Corp. executives for the same conduct in November 2021.

A sampling of the more positive responses 1.

Korea's corrupt elites are called to account, investigated, convicted, and jailed.

Where else does that happen?

2.

People make a mistake of equating the chaebol with corruption.

They are not one and the same thing.


Corruption is an aspect of the way the chaebol have done business, and it is right to try to end those practices.

But the chaebol have also done a lot of things right, and Korea would not have developed as successfully as it has if it were not for the chaebol.

Getting rid of corruption is an admirable goal and would be good for Korea.

Getting rid of the chaebol would not be.

Korea arguably needs them more than ever in the current difficult times.

3.
3.

Recent changes to Korea’s Commercial Code are strengthening the rights of minority shareholders by increasing corporate representation and oversight.

A sampling of the more negative responses: 1.

The power of the chaebol continues to corrupt Korean public life.

The arrest and conviction of two previous presidents of Korea show how politicians have taken chaebol money, but many others in the public sector are also beholden to the chaebol, including ministers, judges, and bureaucrats.
The practice has not changed.

What has is that the chaebol are getting a little better at hiding their influence peddling.

2.

Not being involved in corruption scandals should have been a low bar for Moon Jae-in to clear.

He might have done better than many of his predecessors, but he still failed.

Early in his term his political opponents seized upon controversies and scandals like the Cho Guk affair to make it look like Moon was helping his allies escape accountability.

3.
3.

Illicit ties between Korean businesses and Korean governments run deep.

4.

The South Korean stock market needs more comprehensive shareholder protection, including looser requirements for class action lawsuits and pre-trial procedures like discovery.

TAIWAN Comments There was a big improvement in Taiwan’s corruption score in our latest survey compared with one year ago.
Although 43% of the 107 respondents did not think there was any change in corruption, 31% did think there has been an improvement, while 26% felt the problem has worsened.

Most of the grades were in the range of three to six, although a few respondents had more extreme positions.

The best score Taiwan received was a two and the worst was eight.

Perhaps most notable of all, however, was that the average score was the best for Taiwan since we have been doing our survey.
One area in which “corruption” in Taiwan is increasing is in the form of Beijing trying to use money and favors to get Taiwan businessmen to use their influence (and money) to buy votes for certain candidates in elections in Taiwan.

Beijing has long tried to influence elections in Taiwan, but there was recently evidence that it was actually buying votes.
At the start of this year, the Taipei District Court sentenced five Taiwanese business Page 28 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. people working in China to jail after they were found guilty of taking money from Chinese authorities to encourage and help finance Taiwan nationals working in the Mainland to return home to vote for KMT candidate Han Kuo-yu in the 2020 presidential election.
It is possible that corruption might not figure as prominently in the next general elections as it has in previous ones.

To be sure, there will be a lot of mudslinging, but corruption might not be the hot button it was in previous contests.

Voters seem to be more concerned with other issues like the state of the economy, energy and environmental concerns, and jobs.

On the other hand, corruption could figure into this year’s local elections, depending on the locality.
Places where there have recently been scandals are especially vulnerable.

For example, in the northeastern township of Luodong, there is an ongoing urban development project scandal that has involved a number of officials, including Yilan County Commissioner Lin Tzu-miao, who are accused of influence peddling and being unable to explain the source of certain funds.
Russia’s invasion of Ukraine is sure to spark a debate on how well Taiwan is positioned to fight an asymmetrical war against China and which candidate has the capacity to be an inspiring leader like Ukraine’s Volodymyr Zelenskyy.
A related complication is that Ukraine’s predicament and the determination being shown by its population not to live under the shackles of a Russian regime will draw parallels in Taiwan that will add fuel to the independence debate and the need to strengthen outside alliances with powers like the US.

Beijing is bound to have a strong, negative reaction to such a debate in Taiwan, let alone an actual shift in this direction, which means cross-Strait tensions could increase substantially.
Another new dimension of corruption in Taiwan is the potential for money laundering and fraud involving cryptocurrencies.

One case surfaced last year, when the Criminal Bureau of Investigation arrested 14 people who were allegedly involved in a cryptocurrency investment scam.

This scam defrauded more than 100 people out of about NT$150 million (US$5.41 million) over the space of a year.

Taiwan authorities are trying to get ready to meet this new challenge.
Last July, the island’s new anti-money laundering regulations for crypto entities came into effect.

One obstacle interfering with the fight against corruption is a lack of funding.

The growth of new dimensions of corruption like cryptocurrencies, online fraud, and China-back activities is not being matched by increases in the budgets of the organizations responsible for fighting this graft.
Compared with bodies like Hong Kong and Singapore’s anti-corruption agencies, per capita expenditures in Taiwan are much lower.

Moreover, coordination of different government bodies that have different responsibilities but all deal with graft in one form or another is lacking compared with what is happening in places like Singapore and Hong Kong.

A sampling of the more positive responses: 1.

Dr. Tsai has a clean political image, and this has helped the DPP to improve its image.
She suffered a setback last year when she had to deal with a scandal involving the son of DPP Taipei chapter review committee chairman Chao Ying-kuang, but she seems to have weathered this relatively well.

2.

Recent governments, including the current one, have progressively broadened the scope of what is publicly acknowledged as corruption.

There has been progress toward new, better norms of governance in all three branches of government.

3.
3.

In the decade that I have lived and worked in Taiwan, I have never heard of bribes being solicited for foreign investment approval, nor have I encountered it in my dealings with public officials at Customs, getting my visa extended, or my licenses renewed.

March 23, 2022 ASIAN INTELLIGENCE Page 29 Political & Economic Risk Consultancy, Ltd. Issue #1,088 4.

I have worked in Taiwan and the Mainland for many years.

My personal experience is that the difference in corruption levels is night and day.
There is really no comparison when it comes to the magnitude of the problem at virtually every level of government.

The problem in Taiwan is much smaller.

A sampling of the more negative responses: 1.

Corruption in local asset management companies is a recurrent problem in Taiwan.
In its original form, many of these companies were linked to the KMT when it held political power, but more recent scandals have involved government-linked investment funds in which some senior managers of these funds worked corruptly with local asset management companies to influence share prices to their personal benefit.

Internal controls were seriously deficient.

2.


The KMT has never really shaken off its image as a controlling but corrupt party from before Taiwan’s democratization, but once the opposition DPP finally gained political power, its leaders showed they were just as bad.

Consequently, both parties have had to work hard to improve their internal controls and to win back the confidence of the public in their ethical standards.

There has been an improvement, but a lot more work remains to be done.
Both parties are also tainted by allegations that they have been infiltrated by organized crime and have turned a blind eye to the criminal links for some of their members.

3.

Taiwan companies are no better than Mainland companies when it comes to corrupt practices by their foreign investments, especially in countries like the Philippines, Cambodia, Vietnam, and Thailand.
They are prone to paying bribes more easily than typical Western investors for everything from paying off police for minor traffic offenses to getting goods through Customs and getting their tax bills lowered.

4.

One area in which “corruption” in Taiwan is increasing is in the form of Beijing trying to use money and favors to get Taiwan businessmen to use their influence (and money) to buy votes for certain candidates in elections in Taiwan.

5.
5.

The number of decentralized finance and blockchain firms have grown sharply in Taiwan over the past three years.

This might be a good addition to Taiwan’s financial sector, but it will also bring a new type of fraud and abuse that will have to be policed.

6.

In several rural districts, political power and resources are still in the hands of political elites involved in money politics.
THAILAND Comments There has been a small deterioration in our survey score on how corruption is perceived in Thailand compared with one year ago, but to get a better feel for how perceptions have changed, one needs to look back almost two decades.

Perceptions about corruption in Thailand were most negative toward the end of the administration headed by Thaksin Shinawatra.
This was an elected government, but Thaksin used his mandate and power in controversial ways that many in Thailand considered to be corrupt.

After he was ousted by a military coup in 2006, many supported the generals and agreed with their contention that civilian politicians were behaving too corruptly and that Thailand needed the military leaders to intervene to address the problem.
Perceptions started to improve and, after about two years, the annual scores in our survey had dropped from around 8 to 6-7.

They stayed around this level for a few years, but then jumped back up to 8 at the end of Page 30 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. the elected government headed by Thaksin’s sister, Yingluck Shinawatra, in 2014, when a new military government took over in another coup.
What is unclear is if the jump in corruption actually reflected popular disenchantment with the performance of Yingluck’s government or if it reflected belief in the coup leaders’ accusations that her government had abused its powers and acted corruptly.

After the military takeover, perceptions started to improve again for a few years, but they have been edging higher since 2019.
They are not yet back up to 8, but people do seem to be increasingly critical of the current government, which can lay some claim to being democratically elected but is still headed by many of the same people who staged the original coup and then used their power to revise the constitution in ways that ensured power stayed in the hands of a limited number of people who were either pro-military, pro-royalists, or local business elites.

Now the government’s popularity is coming under pressure.
It might not be any more corrupt than previous governments, but Thais are questioning its effectiveness in managing the COVID-19 pandemic and getting the economy back on its feet.

Some of our survey respondents clearly consider the problem of corruption to be worsening.

That was the conclusion of 39% of the 113 respondents to our latest survey.

Another 44% said it has remained unchanged, but they graded the problem quite severely, many between seven and eight.
Only 18% felt corruption has lessened over the past year, yet most of these people also scored corruption no better than a 6.

The checks and balances on corruption, never particularly strong in Thailand, have been reduced during the periods of military rule in terms of the range of checks, but the government can be more forceful in prosecuting cases when it wants to.

The problem is that this is a very arbitrary decision that is vulnerable to political interference.
Some cases involving well-connected people (often from the military, high-society elite, or royalists) are seldom prosecuted or even investigated thoroughly, while other cases that are pushed through the courts often seem to involve critics of the government.

In other words, the approach to fighting corruption has been inconsistent and selective.
One of the problems with how charges of corruption are thrown around in Thailand is that, over time, they are undermining the reputations of the country’s most important institutions.

The government and parliament, local business elites, the military, the court system, and other parts of the bureaucracy have all suffered reputational damage through allegations of corruption.

Now, for the first time in Thailand’s modern history, the monarchy is being criticized for its behavior.
This is really unprecedented, so it is impossible to predict what the fallout will be or, if current trends continue, how it will affect future perceptions.

A sampling of the more positive responses: 1.

Thailand has been good at putting in place systems that help identify symptoms of corruption and reduce the opportunities for corrupt practices.

Public service processes like passport issuance, ID cards, and driver licenses, have been streamlined.
Many of these processes are now online, reducing the need for face-to-face contacts with officials.

2.

Thailand does not have a “culture” of corruption.

It does lack the political will to fight the problem effectively, but for many years now different governments have built on the body of law designed to fight corruption and set up numerous institutions responsible for keeping it in check.
The framework therefore exists and enough publicity is shined on these institutions to let the public know that corruption is wrong.

In other words, it is not an integral part of Thai culture.

If a government came to power that really wanted to fight corruption in a broad, systematic way, the framework exists to do so.

It will not have to start from scratch.

March 23, 2022 ASIAN INTELLIGENCE Page 31 Political & Economic Risk Consultancy, Ltd. Issue #1,088 3.
Thailand does a fairly good job of fighting money laundering and many types of financial crimes.

Its stock market is relatively well regulated, and the banking system is relatively well regulated and supervised.

A sampling of the more negative responses: 1.


The government’s choice to produce AstraZeneca doses locally through Siam Bioscience, a company owned by the king, with no prior experience in developing vaccines, was extremely controversial and, for the first time that I can remember in my time in Thailand, has resulted in average Thais talking quietly among themselves about how the current king might be acting corruptly.
There is a distinction between the king as an individual and the monarchy as an institution, but the latter could be weakened, which would be very bad for Thailand.

2.

Thailand is what it is.

The key actors will remain the same, and self-regulating ethical behavior just does not work in Thailand the way it does, say, in Singapore.
The fight against corruption has been a spectacular failure because those connected to the top are shielded by protection and favoritism, while whistleblowers are punished or silenced.

3.

Thailand's legal system has glaring shortcomings, too.

For one thing, Thai police are thoroughly corrupt.

For another, the lengthy time period that court cases require and the low conviction rate enable corrupt individuals or agencies to act with a high degree of impunity.

4.
4.

Thailand's economic crisis, compounded by the pandemic, has only made corruption worse, with police given more power to enforce COVID-related laws.

5.

Cycles of temporary crackdowns, followed by a return to “business as usual”, have bred cynicism toward government programs to reduce corruption.

“Do as I say, not as I do,” seems to be the motto of government officials in Thailand.

6.

While many people consider the police to be the most corrupt department in the government, I disagree.
The worst offenders are those in charge of public sector procurement.

It does not matter if it is the military, roads and infrastructure, or medical equipment, people with the power to decide on the purchases of goods and services is where the most corruption takes place in Thailand.

Moreover, this is not a new problem.

It is not any worse under the current government than previous ones.

It has been bad throughout Thailand’s modern history.
UNITED STATES Comments The US might be an example of a country where perceptions of corruption could be worse than the actual magnitude of the problem.

It is definitely an example of why perceptions are important – possibly just as much as reality.
In the case of the US, it is the perception that corruption has both deteriorated and is high that has resulted in a loss of people’s confidence in major institutions like Congress, the media, the political party system, the court system, and bodies like the FBI and Attorney General’s office.

Americans and foreigners alike are starting to focus more on the warts of America’s democratic system than it virtues.
The difference in perceptions is also behind the polarization of society in ways that are socially destabilizing and inhibiting the ability of the country to unite behind common threats like COVID.

Page 32 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd.

The reality of the problem might not warrant the average score of 5.98 in our latest survey, up from 5.84 in last year’s survey.

But it is a very accurate measurement of how the problem is perceived.
Of the 124 respondents to our survey, slightly more than 45% indicated they believe corruption in the US has increased over the past year, while just under 39% said there has been no change in the problem.

Only 16% felt it has decreased.

Perhaps more telling, in the comment section of the questionnaire, we could find precious few who had anything good or positive to say about corruption in the US.

In general, respondents were highly critical of the situation in the US.
Some were obviously seeing the problem from a Republican perspective, and some had the perspective of a Democrat.

We divided those into two different groups to give readers a feel for the difference, although rather than label the groups “Republican” and “Democrat”, we felt it was more accurate to label them “pro-Trump” and “anti-Trump”, since some of the respondents who were clearly Republican were extremely critical Trump’s character and its impact on institutional integrity.
A third group, which was the majority, were more difficult to identify by political camp.

We have also created a section for these responses.

The individuals in this group might have been pro-Trump or anti-Trump, but this political leaning was not reflected in the way they perceived corruption.

Instead, this group focused on the corrupting impact of political lobbying and fake news, including the potential of lies to be passed off as truth and for truth to be discredited as a lie.
This interferes with transparency and makes it easier for corruption to be whitewashed.

This group also included people who did not specifically indicate their antipathy toward Trump or Biden but focused their comments on corruption in the private sector, the education system, and state-level politics.

It is totally understandable why perceptions about corruption in the US are as negative as they are.
For years now, political leaders of both major parties have been accusing the other party of acting corruptly.

Their accusations have been supported by rival news agencies in ways that have made it extremely difficult to distinguish fact from fiction, but none of these accusations have painted the behavior of people or institutions in a favorable light.
Supporters of Donald Trump are convinced that the last elections were rigged despite overwhelming evidence to the contrary and that the next elections will be too unless voting laws and procedures are changed.

They believe the court system is being used as a tool by Democrats to carry out a vendetta against Mr. Trump and his family.

And they believe Mr. Trump when he trashes bodies like the FBI, the intelligence agencies, the courts, and any media that challenges his own views.
This group accounted for 12.5% of the total survey respondents, and their average score for corruption in the US was 8.5, the most negative or pessimistic of all groups.

At the other end of the spectrum are Democrats and “non-Trump” Republicans who accuse Mr. Trump of being the most corrupt president the US has ever had.
They point to his refusal to release his tax returns, his decision not to divest from his business interests while in office, and his attempt to overturn the 2020 election result and prolong his term as president.

It is very difficult to resolve these two extremes.

However, both sides currently seem to be completely convinced that the other side is at fault and where the biggest problem of corruption exists.
The anti-Trump respondents accounted for 22% of the respondents to the latest survey, and their average score was 7.1.

Those respondents who were not clearly pro- or anti-Trump accounted for 65.6% of the total respondents.

Their average score, at 5.1, was much lower or more favorable than were the scores of the pro- and anti-Trump groups.
It is still not a particuarly flattering score, but it does indicate that the two ends of the political spectrum have a much darker take on corruption in the US than do people who have been less consumed by the pro- and anti-Trump mud-slinging.

A sampling of the more positive responses: March 23, 2022 ASIAN INTELLIGENCE Page 33 Political & Economic Risk Consultancy, Ltd. Issue #1,088 1.
I know the US population is deeply divided, with each side labeling the other as being extremely corrupt, but that is partly because corruption is so disliked in the US that labeling someone corrupt is one of the biggest insults you can make.

The accusations are more a reflection of frustrations and passions than reality.

Closer to the truth is that the US has taken the lead in the world in enforcing its foreign corrupt practices act.
It not only proactively tries to discourage US companies from acting corruptly abroad but also uses the act to expose and punish corruption practiced by individuals and companies from other countries in their foreign business.

I prefer to see the US as a force fighting global corruption rather than a contributor to this corruption, but following years of hubris, the population is increasingly insecure and has self-doubts about its own standards.

2.
2.

Corruption is a fact of life, but it is not accepted as normal behavior in the US.

While one side of the coin might be increasing corruption, the flip side is increasing attempts to improve policing and fight corruption.

Both sides are helped by new technology, which, while complicating the job of fighting corruption, is also a threat to those acting corruptly.

A sampling of the more negative responses that are less identifiable with a particular political view: 1.
My perception is there is much more corruption in politics than in private commerce.

It is difficult to separate partisan jabs from reality but it appears to me that over the past five years corruption in the US has increased.

My basis is the number of lawsuits brought, embarrassing resignations from important government and private sector office holders, and apparent skepticism by world leaders of the US government.

2.

Lack of transparency in political contributions.


Unprecedented influence of money in politics.

Elected officials who use their office for their own self-interest.

Incredibly large amounts of Federal money (actual and created on credit) being quickly dispersed with few safeguards.

Our lawmakers are beholden much more to the big donors who help them get and stay elected than they are to their constituents.

3.

The political corruption at all levels – Federal, state, local.
Through the Chicago lens, it’s particularly difficult to see much hope.

Our Hall of Shame (aka City Hall) just got another new member today (40 convicted Aldermen in 40 years – a pretty consistent record).

Dare I mention four governors have served jail time, along with countless county officials.

The cumulative effect of this endemic corruption is to desensitize the public to the pervasiveness in their daily lives.

4.
4.

Political corruption by major political players…Republicans vs Democrats is over the top.

News Media is out of control with no way to monitor the messages they are sending.

Removing the fairness doctrine in the media has resulted in empires of journalism that do little but goad extremists and polarize us.

Civil discourse has as a result been corrupted, as has faith and trust in government and each other.
Finally, lying habitually is a sure sign of the corruption of character, both personal and societal.

Adopting and advocating lies for political gain, so common now in the US, is Orwellian and deeply corrupt.

5.

All governmental decisions are now totally motivated by maintaining both party and personal power bases.

And all means are justified by those ends.

It is depressing.
It is depressing.

Especially worrying is the way lawmakers at the state level are using their power to make it more difficult for certain groups to vote.

Then there is the problem of gerrymandering.

These practices might be technically legal, but they are really just a form of corruption that is undermining our democratic system.

6.

Ethical standards, including honesty and fair play, are being ignored or forgotten.
It’s OK to cheat to get into the right school or get the high grade, and then to use those false credentials along with personal connections to get the right job, and to act corruptly at work for the sake of the deal or the promotion.

Just Page 34 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. look at the surging popularity of cryptocurrencies, especially among young adults.
Their main attraction is that they are largely unregulated and the normal rules do not apply to them, making it easier to launder money, avoid taxes, or hide wealth from a spouse you want to cheat on.

In other words, people want to act corruptly if they think they can get away with it.

The very character of the US is changing for the worse.

7.

I have participated in your survey for a number of years.

This year, I am persuaded not to give a grade or indicate a directional change.
I think the Republican Party and many of its supporters are quite corrupt, but in ways that are non-traditional and poorly understood, even by many followers because of manipulation of information to those followers -- about half of US citizens.

I feel helpless about the direction the world is headed, and I cannot respond to your simple questionnaire in the way you’d like this year.
I don’t see it as meaningful anymore and I think in the US we are beyond worrying about the concept of “corruption" and should instead be concerned about the possibility of a civil war in the coming decades.

A sampling of the typical anti-Trump responses: 1.

Particularly worrisome is the movement of extreme conservative elements of the Republican party to embrace and accept corruption as standard practice to achieve their political goals.
These include public media misinformation, uninhibited lying, manipulation of voting methodology, and implicit support of adverse nationalistic and racist policies.

2.

We cannot trust the politicians.

We as a country should be saddened by the partisan battle between the two major parties.

We cannot trust the Republican National Committee (RNC) for their ridiculous view of the riot which occurred in Washington DC after Biden was declared the winner of the election.
Liz Cheney, whom I view as a hero, was sadly condemned by the RNC!

I cannot trust the Democrats because in their zeal to help everyone, they hurt us all with the growing inflation!

3.

The problem in the US is that we are allowing people like our delightful former president to undermine the concept of all being equal before a single code of law.

That rule of law and the transparent exercise of the rule of law is what ensures a good business environment and safe conduct for citizens.
Trump has always fought transparency and has used his money and power to escape being held accountable.

He has never pursued the rule of law but behaved as if he is above it.

So far, he has gotten away with it, which is why the grade for corruption deserves to be very high in the US.

Trump is not only corrupt personally but also he has weakened institutions responsible for policing against it.

This institutional weakening could last far longer than Trump’s time on this earth.
A sampling of the typical pro-Trump responses: 1.

We have a president and his family who are the most corrupt we have ever seen, and our national security is severely compromised re: China, Russia, Ukraine.

The Speaker of the House is running the chamber by silencing all opposition; at the same time she is engaging in massive insider trading.
Hillary Clinton, never a silent one, now appears to have been the instigator of the Russia hoax, and all democratic leaders were fully aware of this for the past five years, leading to distractions of getting “the people’s work” done.

Horrific.

2.

With corrupt Joe Biden the scale is definitely 10.

He cheated to get elected, he has taken millions of dollars from China and who knows where else, and his kid Hunter Biden has also been on the take from China.
The border is wide open just to get Democrat votes.

The oil production in the USA has been limited since Joe closed the pipeline.

We left trillions of dollars in weapons in Afghanistan and did not care about our soldiers, allies, and citizens.

Russia and China think we are weak.

Big pharma is allowed to make billions while the small business owners are forced to close.
Big tech and the media can ruin any conservative, but nothing is March 23, 2022 ASIAN INTELLIGENCE Page 35 Political & Economic Risk Consultancy, Ltd. Issue #1,088 done about liberal opinions.

Crime is out of control in New York and LA.

They are letting criminals walk instead of prosecuting.

BLM is allowed to riot as long as they want.

3.

Corruption related to the voting process and the importance of validating authenticity.

Corruption related to the lack of protection of our citizenship.
VIETNAM Comments There has been a significant improvement in perceptions regarding corruption in Vietnam compared with one year ago.

Petty graft among low-level civil servants remains quite common, but the government has been cracking down harder on larger scale corruption.
Unfortunately, much of the corruption that takes place at the low levels – in the form of protection fees by police and lenient treatment by other officials – is systemic, and those collecting the fees keep only a portion of it while passing much of the money collected up to higher ranking officials.

Indeed, part of the requirements for landing these kinds of jobs is to agree to participate in systems that reward those who are responsible for hiring.
This kind of corruption is extremely difficult to root out.

However, Communist Party of Vietnam (CPV) General Secretary Nguyen Phu Trong has taken a tough line against high level corruption during his time in office.

Several Politburo members and a number of current and former CPV Central Committee members have been disciplined as a result of the campaign.
Many of them were prosecuted and given long prison sentences, including former Politburo member Dinh La Thang and two former ministers of information and communications, Nguyen Bac Son and Truong Minh Tuan.

In 2021, Trong oversaw the sacking of Hanoi party chief Hoang Trung Hai for forgery and money laundering, prosecutions of individuals linked to the former Ho Chi Minh City party boss Le Thanh Hai and a purge of senior coast guard officers.
The anti-corruption campaign has also extended into the military for the first time.

More than two dozen generals have been disciplined or prosecuted over the past six years.

These high-profile arrests have had a favorable impact on how people perceive the trend of corruption.

The scores in our survey have been trending better since 2015, but the improvement in the past year has been the sharpest.
Of the 104 respondents to our latest survey, one third indicated that corruption has decreased over the past year.

Slightly more than half said there has been no change in the problem, while fewer than 10% of the respondents felt it has deteriorated.

In addition to the crackdown orchestrated from the top of the CPV, another reason corruption might have decreased during the past year is because the intensification of the pandemic hurt the economy so badly that people could not pay as much in bribes.
Lower-level officials might have asked for them, but people had to negotiate their payments down, and the officials had to accept, perhaps with a warning that they will be making up the difference once economic conditions improved.

If that is the case, corruption could worsen again going forward, but there are real constraints on what people can pay.
The end of the boom in certain sectors like real estate has lessened opportunities for graft in these sectors, and as long as these markets do not overheat again, there will be less opportunity for corruption to re-intensify.
On the other hand, because the fight against corruption has intensified the economic slowdown in some sectors, as the grip of the pandemic lessens, the authorities might be faced with the need to make a tradeoff between maintaining a tough stance against corruption and the desire to promote economic growth.
Page 36 ASIAN INTELLIGENCE March 23, 2022 Issue #1,088 Political & Economic Risk Consultancy, Ltd. One of the biggest medium-term concerns about corruption in Vietnam is that the current crackdown is closely associated with a single individual, General Secretary Nguyen Phu Trong.
This makes the fight personal rather than institutional, and the systemic checks and balances that can ensure the fight is maintained even after Trong leaves the scene do not yet exist, or at least there is little confidence in them.

A sampling of the more positive responses: 1.

While large parts of Vietnam’s bureaucracy and government have acted corruptly (and continue to do so), the country’s very top political leaders are serious about fighting corruption.
They are making examples of high-ranking party officials to show that no one is immune to punishment.

Moreover, there is every reason to believe that those leading the fight against corruption, especially General Secretary Nguyen Phu Trong, consider the moral decline of Party members and the rise of interest groups within the CPV as a liability that has to be addressed to protect the Party’s dominant position, preserve social stability, and facilitate sustainable economic growth.

2.
2.

While Nguyen Phu Trong is personally responsible for leading the fight against corruption, he is trying to develop an institutional structure to keep fighting the problem.

That has to be done through the CPV rather than the court system, but that does not mean the institutionalization of the fight is doomed to failure.
The structure currently being developed is under the Steering Committee for the Anti-Corruption Fight, which was set up in February 2013 and which has been chaired by Trong since its inception.

While it is hard to separate Trong from this Committee, they are not one and the same, and the Steering Committee could outlast Trong.

3.

Inspection and auditing agencies have been given new powers to enhance their effectiveness in the fight against corruption.
The government is in the process of revising the Inspection Law, which has been in effect since 2011.

The amendments are expected to clarify the role, powers, and duties of inspection agencies, enable new levels of innovation and streamline inspection efforts.

4.

Positive economic achievements are reinforcing the determination to reduce corruption.
The pandemic has been a setback for the economy, but foreign direct investment inflows increased sharply in previous years, and their growth coincided with the government’s anti-corruption campaign.

The desire to rev up the economy will prompt the government to try to attract more FDI, and this should help to promote more efforts to reduce the kinds of corruption that foreign investors consider to be big deterrents.

A sampling of the more negative responses: 1.


Part of what is being portrayed as a crackdown on corruption is really just a shift away from influential groups in Ho Chi Minh City to Northern Vietnamese private elites and Communist officials.

The “black networks” of Chinese Vietnamese businesses and Southern Vietnamese businesses are losing their grip on the Southern economy.

2.
2.

The fight against COVID has made the government more sensitive to permitting corruption, but the pandemic has also provided opportunities for unscrupulous officials to profit from the plight of others.

This was shown by the way the anti-graft campaign intersected with the pandemic response in the early days of COVID, when the head of Hanoi’s Center for Disease Control along with six other officials were indicted on a charge of collusion to inflate COVID-19 test kit costs.

3.
3.

The land administration, construction sector, and public administration remain especially prone to corruption.

The pandemic might have reduced the magnitude of this kind of graft, but that is likely to be only temporary.

When the opportunities for profit go up again, so will corruption.

March 23, 2022 ASIAN INTELLIGENCE Page 37 Political & Economic Risk Consultancy, Ltd. Issue #1,088 4.

A permanent weakness of Vietnam’s ability to fight corruption is institutional.
Responsibility for carrying on the fight lies with the Communist Party of Vietnam, not with the judiciary, which lacks the independence needed to head the fight.

The courts have to defer to the CPV, which means the fight is political and personalized.

The current head of the Party might be serious about fighting corruption, but he is old and his successor is likely to have different priorities, including his approach to labeling what is and is not corrupt.
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