Business Magazine

Confronting Corruption in Asia’s New Democracies

Posted on the 14 August 2017 by Center For International Private Enterprise @CIPEglobal

Corruption is detrimental to countries' economies because it leads to reduced productivity, high unemployment, and poverty. In addition to the economic cost, corruption corrodes democracies by weakening citizens' confidence in their governments. This distrust and disenfranchisement can drive people to join extremist groups. "In conflict-affected areas, especially where Al-Qaeda or the Islamic State are trying to set up shop, economic grievances make it much easier to recruit local nationals into their fight," commented Jennifer Anderson, CIPE's senior program officer for South Asia. "Not only is corruption debilitating democracy in Afghanistan, it's also leading to recruitment. Right now in Afghanistan, the Taliban has either control or influence over 40 percent of the country."

Anderson spoke in a CIPE panel discussion in July that examined the issue of corruption in Asia, with a focus on Afghanistan and Cambodia. Other panelists included experts from CIPE's Asia Department; the Hudson Institute; and SILAKA, a Cambodian nonprofit organization.

Year after year, large international aid organizations have arrived in Afghanistan, launching one-year programs and leaving before they could have any impact. Besides being an obstacle to economic development, corruption is a deep-rooted problem that requires a long-term, "multi-generational solution," according to Anderson. Having worked in the country since 2008, CIPE recognizes the importance of taking incremental steps and examining what is happening underneath the surface.

In what was a "demand-driven and locally driven" effort, CIPE helped to form a public-private partnership in which small Afghan businesses have come together to identify low-level daily corruption that hurts local businesses, Anderson said. Then small business owners work with government officials to find solutions. Although meetings may not sound exciting, "fancy, high-tech solutions" won't work, Anderson explained. "In poor countries, relationship building is all you have. If you don't have relationships-you don't know the people-then nothing's going to be resolved," she said. "We've been building relationships with associations and businesses at the provincial level and bringing them together to have a dialogue on what are the biggest barriers for (them) to start or grow (their) businesses."

In Cambodia, where corruption and bribery are intrinsic to the system, CIPE works with SILAKA to help citizens engage with local governments to promote good governance in civil society and the government, according to Thida Khus, SILAKA's executive director. SILAKA created a coalition between the public sector and private citizens, in which private citizens monitor the procurement of government contracts. The aim of the program is to increase accountability and transparency in public finance. "The costs of public contracts have fallen by 50 percent. We're having a real impact," said John Morrell, CIPE's regional director for Asia.

While many governments are corrupt, not all corrupt governments cross the line into a true kleptocracy, which is defined by state capture and people using corruption to acquire power and stay in power, according to Charles Davidson, executive director of the Kleptocracy Initiative at the Hudson Institute. He cited Russia as an example of a kleptocracy.

Although Cambodia's national government is not democratic, local democratically elected governments have existed for about a decade. As a result of this decentralization, local governments run schools and oversee the construction of roads and canals. One successful result of CIPE's and SILAKA's work is that "we've changed citizens' perception" of government, Morrell said. "Instead of fearing government and obeying it, people expect services from it. 'I pay taxes, I expect a road to be built.' There's an expectation of accountability." However, if corruption pervades government at the local level in Cambodia, "that could deal a blow to democracy," Morrell noted.

With one of the youngest populations in the world, Cambodia's demographics could lead to a brighter future for the country. "The younger people are in Cambodia, the more likely they are to be pro-Western, pro-democracy," said Morrell. When the government threatens war, the threat strikes fear only in the hearts of Cambodians who recall the brutal regime that ended two decades ago. "This kind of tactic only works with the older generation who lived under the Khmer Rouge," Khus explained. "For the younger generation, their agenda is different. So they're the ones who make a difference at this time."

To watch this event in full, please visit the CIPE website.

John Morrell is the Regional Director for Asia at CIPE.


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