The insidious effects of corruption

Tom Coyner

The fact that we still read newspapers rather than getting our updates from Twitter, etc. is driven by our desire to understand why as well as what is happening. We dig deeper into the articles to understand the causes. And the deeper we dig, the more likely we are to find corruption.

Corruption is not just illegal payoffs. Its many forms are based on keeping privilege among oligarchs and away from the majority of society. It allows those with the financial and political means to maintain relative power while denying freedom and opportunities to others.

Sometimes it is systemic and necessary just to get things done. A trademark of a so-called developing economy is to underpay the public sector so that bureaucrats and even teachers would have to depend on “special favors” to make ends meet. I witnessed this to be the case in Korea during the 1970s before democracy took root and the eventual reform of the national budgets that now makes public sector jobs highly sought-after among top university graduates.

But the old Korean-style corruption was a garden-variety sort compared to what we see fulminating behind today’s headlines.

One of my favorite parts of the world is Southeast Asia. In fact, I’m proud to point out that one of my sons has married into a Thai family. But what I see in Thailand and most of that part of the world is a superficial discount that rewards - and takes advantage of - the naive visitor. That is, foreigners often rejoice to discover how cheap everything appears to be. The asking or negotiated prices are comparative steals to prices found in more developed markets. I call those prices “Southeast Asian discounts.”

But buyer beware! In those economies, there seems to be at every twist and turn some kind of scam being attempted. This is not to say the people are less than ethical, but few of them can hope to make ends meet by simply relying on above-board prices. There has to be supplemental income to put food on the table and to send the kids to school.

According to my observations in Thailand, the real story is not about regionalism or even the reds versus the yellows. Rather, there are two large camps, rallying around two flags, repudiating corruption-caused economic and social illnesses. The yellow-shirted urbanites are alarmed that they are losing their corrupt control due to a populist politician who is not only highly corrupt but also politically brilliant. The rural red shirts know their leader is extremely corrupt, but he delivers opportunities and often extralegal rewards better than the establishment’s corrupt politicians and bureaucrats. But in fact, based on my conversations with friends in both groups, they are equally cynical about the overall economic and political system. Ultimately, their shared, fraudulent environment has corrupted both my yellow and red friends who nonetheless try to be fair and honest in most of their dealings.

This is not to pick on Thailand, since much the same can be said about other nations in the region and around the world. I only happen to have greater personal knowledge of Thailand, including photographing close up and chatting with the remarkably friendly demonstrators in both camps.

But corruption, of course, can be found everywhere. For example, the current headlines focus on Crimea. The recent people’s revolution in Kiev’s Independence Square was a repudiation of their government’s corruption and a desire to move into a more transparent European environment. Yet Russia appears to be emboldened to make its moves based on its understanding of Western corruption.

Ben Judah recently wrote in Politico why Russia no longer fears the West. According to this analysis, Russian President Vladimir Putin feels confident in part that the West acts only out of an immoral concern for money. In other words, during the cold war, the Western nations were ethically stronger, bound together in a counter-Communist ideology and willing to make anti-Soviet vigilance as a first priority. But after the collapse of the Soviet Union, shady Russian oligarchs have discovered that elite Western professionals have been willing to their dirty work for a piece of the action.

In fact, Judah suggests that Putin is counting on the European - and even the American - elite to be more concerned about making money than actually enforcing conceivable trade sanctions against Russia, should these elite governments attempt countermeasures.

If that should prove to be true, Russia may discover that one of the best things that has happened to it was losing the cold war. The loss may have enabled its nationalist, albeit often crooked, interests to triumph over West’s insidious corruption that has spread within relatively laissez-faire economies and vogue libertarian doctrines.

Or to put it another way, when corruption becomes endemic, cynicism toward laws and regulations becomes a matter of fact. And this attitude can be displayed even at the national level. A case in point is the Russian Federation’s disregard for the 1994 security guarantee it signed with the United States. The agreement recognized Russia for removing nuclear weapons from Ukraine and joining the Nuclear Nonproliferation Treaty in exchange for respecting Ukrainian “territorial wholeness.” But a society rife with corruption at the top levels can be more easily tempted to ignore such agreements for the sake of territory seizures. As Ukrainian Prime Minister Arseniy Yatsenyuk points out, “This crisis will have a negative impact on the processes aimed at nonproliferation of nuclear weapons in the world. It will be very difficult to convince Iran and North Korea to abandon their nuclear weapons.”

In other words, corruption - be it found in Bangkok or in New York City - not only creates unfair and wasteful processes. It also attacks the moral fiber of nations to the point of strategically and tangibly endangering the overall well-being of the citizenry. Unhappily, that seems to be what is happening behind many of today’s headlines.

*The author is president of Soft Landing Consulting, a sales-focused business development firm, and senior adviser to the IPG Legal group.

By Tom Coyner