Indonesia the most corrupt economy in Asia

Indonesia the most corrupt economy in Asia

Agence France-Presse Singapore

Corruption in Indonesia is becoming worse, according to the Political and Economic Risk Consultancy (PERC), which ranked the country the most corrupt among 12 national economies in Asia covered by its latest survey of some 1,000 expatriate businessmen working in the region.

"It is hard to believe that the problem of corruption in Indonesia could grow worse, but that is what is happening. The entire national legal system is in shambles, so the courts do not offer much protection," the Hong Kong-based PERC said.

The survey also revealed that corruption remains high in the rest of the region.

In a scale of one to ten with ten being the worst possible score, Indonesia was seen as the most corrupt with a grade of 9.92, its worst score since the survey started in 1995. India was the second most corrupt with a score of 9.17, slightly down from 9.25 last year.

Vietnam got the third worst score of 8.25, but this was sharply down from 9.75 in 2001.

The Philippines, where the level of corruption was described by PERC as "bad", scored 8.0, an improvement on last year's 9.0.

PERC noted a "marked improvement" in the Philippines after President Gloria Arroyo took over from Joseph Estrada last year, but stressed that Manila's score remained well below the average.

Taiwan was graded 5.83, beating China's 7.00, which was an improvement on its 7.88 rating in 2001.

According to PERC, Singapore, Japan and Hong Kong have the least corrupt economies in Asia. Only these countries scored above the average grade of five.

"Of the countries covered here, only Singapore really stands out as having a reputation that matches or even surpasses that of developed Western economies like the U.S., the UK and Australia," PERC said.

Malaysia was judged the fourth least corrupt with a score of 5.71, better than the 6.0 it got in 2001, followed by South Korea with 5.75, down from 7.0 last year.

In Malaysia, the problem "has been more one of poor corporate governance than outright corruption".

The survey revealed that perceived corruption is lower compared to a year ago in the majority of the region's economies.

However, "with the exception of a couple of countries in Asia, the problem of corruption remains far too high for comfort," it said.

In some of the places where the problem is worst, "it is perceived to be growing".

"What is particularly interesting is that in almost every country the range of grades was very narrow. There was a broad consensus on the magnitude of corruption as a problem for business," the survey said.

Efforts to impose more rigorous regulatory standards worldwide following the collapse of U.S. energy giant Enron Corp. could result in more Asian companies being unable to meet the new requirements, PERC said.

On the other hand, Asia could also resist Western pressure for reforms by citing the shortcomings of corporate America as mirrored in the Enron bankruptcy saga.

"The U.S. is certainly not going to stop pressuring Asian governments to adopt certain standards and practices, but if the U.S. starts being viewed like an emperor with no clothes telling everyone else how to dress, this could be deeply resented by those coming under this pressure," PERC warned.