People's experiences of corruption: implications for business in South-East Asia

Corruption Political corruption Southeast Asia

Corruption continues to be a pressing issue around the world, contributing to growing inequality and an erosion of democracy and public trust in governments. It is often regarded as a public sector issue, where government officials and civil servants abuse their entrusted power for personal gain. However, there is a strong link between corruption and the private sector that is important to acknowledge, especially within growing economies such as those in South-East Asia, where corruption could discourage legitimate foreign investment.

Corruption increases both the costs and difficulty of doing business in a particular country, where such costs paid through bribery are eventually passed down to consumers themselves. Some businesses in developing countries also find that facilitation payments made to public officials are frequently necessary in order to receive basic public services in a timely manner. Bribery and facilitation payments are problematic for businesses, as these practices not only increase prices, but also distort market competition.

In recognising that corruption continues to be one of the key challenges faced by companies doing business in South-East Asia, this report provides a perspective on the link between corruption and businesses in six countries: Cambodia, Indonesia, Malaysia, Myanmar, Thailand and Vietnam.

Key findings:

  1. Few people think corruption is on the decline Almost half the people surveyed thought that the level of corruption in their country had increased over the preceding 12 months. The highest result was in Indonesia, where nearly seven out of 10 people said they thought that the level of corruption had worsened.
  2. People are divided as to whether governments are doing enough to stop corruption People are almost equally divided over how well their governments are doing at tackling corruption: 47 per cent of respondents said that the government was doing well, and 46 per cent said that the government was doing badly.
  3. Two in five paid a bribe when using a public service in the six surveyed countries On average, two in five people had paid a bribe when they accessed any of six key public services in the six surveyed countries. The police was not only perceived as the most corrupt institution, but also had the highest bribery rates out of the six public services.
  4. The rich reported paying more bribes than the poor Wealthy people, possibly connected to businesses, have overwhelmingly paid more bribes than poorer people in Vietnam, Myanmar and Cambodia, raising serious business integrity concerns within these countries.
  5. Two in three said they could make a differnce in the fight against corruption A majority of respondents agreed that they could make a difference in the fight against corruption. People said that refusing to pay bribes, followed by reporting corruption to officials, were the best ways for them to tackle corruption in their own country.
  6. Few report corruption, due to fear of the consequences While reporting corruption was in theory seen as generally acceptable, we found that there were strong reasons why people do not do so. The main reasons are because they are afraid of the consequences, followed by a belief that it would not make a difference if a report is made.
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