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The spectre of corruptionby Oscar Wendel on Dec 2, 2012
The globalised economy has done wonders in decreasing market distortions that obstruct the laws of free enterprise. Trade barriers and State-run monopolies are easy to spot, and therefore easy to adapt to. Rarely are they the reason for a company deciding against doing business with, or setting up operations in, a country.
The major market distortion today is due to corruption, an issue that seems to be increasingly complicated, causing greater unpredictability in markets. For India and China, possibly the most recurring and important question is how corruption may hold them back from reaching their potential, and how it can be alleviated.
Corruption is, by its nature, a sensitive subject, and difficult to measure, as few are honest about participating in it. Even the definition depends on cultural perspectives. In some instances, particularly in developing nations, the practice of incentivising those in a position to expedite requests can possibly be seen to be a form of tipping.
While the West prides itself on appearing to have eliminated corrupt practices, I see the continuing slide in their competitiveness as simply being another form of corruption. I was following the news of the new leadership in China being installed, interspersed with reports of the CIA director David Petraeus stepping down.
An intricate marital affair had been uncovered. The story also included the top commander for Afghanistan, John Allen. With the expansive email correspondence that the FBI found, it left me with the impression that these leaders must be incredible at multi-tasking, or they really literally have no time or focus for getting any work done at all. Which, granted, explains a lot.
The problem is not that the men in leadership positions are repeatedly abusing the trust and power placed in them. Rather, we have been made to accept these behaviours, and that there are different sets of moral codes that apply. Or, rather, that do not apply to those in positions of power.
This has been escalating in the last five years alone. The banks and rating agencies that conspired and profited from junk debt being Triple-A rated and sold to gullible investors is not too different from the former IMF chairman taking liberties with a New York chambermaid.
One would almost think that egregious displays of recklessness and hedonism are the traits of any male leader, whether it is in politics, business, military, the Catholic Church or in entertainment.
They are becoming ever more difficult to tell apart! The acts of transgressions themselves are not so frowned upon anymore. It is when our leaders lack the skill to avoid getting exposed that we feel let down.
The failure to live up to a certain moral standard is not in itself the main problem for the dominant economies in the West.
Rather it is the corruption it breeds in how the most crucial individuals whom we count on to give direction are left unchecked for having even basic competencies, judgment or even accountability as opposed to the expectations we have from every functioning member in society.
We have got it the wrong way around when prosecuting even minor infractions of a minimum wage labourer becomes a bigger priority than monitoring those in positions of power to see that they even do any work at all.
Whether an emerging economy or a member of the G8, how corruption is dealt with will unquestionably influence the ability to inspire confidence and attract investment.
As a yard stick, it is generally wise to apply the same level of scrutiny to oneself before laying claim to any moral superiority over anyone else.
To recall the famous quote by Pogo: “We have met the enemy, and he is us”.
Oscar Wendel is the conference manager of Construction Week.
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