ASIAN JOURNAL OF PUBLIC ADMINISTRATION VOL. 25, NO.

2 (DECEMBER 2003)- 235-266

Causes and Consequences of Corruption in Southeast Asia: A Comparative Analysis of Indonesia, the Philippines and Thailand
Jon S T Quah

Corruption in Indonesia, the Philippines and Indonesia can be attributed to the low salaries of the civil servants and political leaders, the ample opportunities for corruption in many public agencies, and the low probability of detection and punishment of corrupt offenders. The consequences of corruption are negative for all three countries, but they are less serious for Thailand because of the National Counter Corruption Commission s efforts in curbing corruption. The anti-corruption strategies in Indonesia and the Philippines would be more effective if their political leaders demonstrated their commitment to curbing corruption.

Introduction Corruption is a serious problem in many Asian countries today. The United Nations Development Programme (UNDP) has defined corruption as "the misuse of public power, office or authority for private benefit through bribery, extortion, influence peddling, nepotism, fraud, speed money or embezzlement" (United Nations Development Programme 1999: 7). Fortunately, the research taboo on corruption mentioned in 1968 by Gunnar Myrdal (1989) no longer exists as a great deal of research has been done on corruption in Asian countries since the 1990s.1 Southeast Asia refers to these 10 countries: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Table 1 shows the ranking of seven of these countries on Transparency International's Corruption Perceptions Index (CPI) in 2003.2 From this table, it can be seen that
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Singapore (ranked 5th) is the least corrupt Southeast Asian country, while Indonesia (ranked 122nd) is perceived to be the second most corrupt after Myanmar, which is ranked 129th among the 133 countries surveyed. This article focuses on the causes and consequences of corruption in three Southeast Asian countries: Indonesia, the Philippines and Thailand. These three countries are selected for comparison for two reasons. First, enough research has been done on corruption in these countries to facilitate comparative analysis.3 The second and more important reason is that they provide between them several important aspects for comparison: land area, population, GDP per capita, colonisation, political system, the role of the military, and religion.
Table 1 Ranking of Seven Southeast Asian Countries on Transparency International's Corruption Perceptions Index in 2003 Country Singapore Malaysia Thailand Philippines Vietnam Indonesia Myanmar CPI Ranking 5th 37th 70th 92nd 100th 122nd 129th CPI Score 9.40 5.20 3.30 2.50 2.40 1.90 1.60

Source: http://www.transparency.org The scores range from 0 (most corrupt) to 10 (no corruption).

The article contends that while the causes for corruption in Indonesia, the Philippines and Thailand are similar, the consequences for corruption in these countries are different because of the varying levels of effectiveness of their governments in minimising corruption. Thus, of the three countries, the consequences for corruption are more serious in Indonesia and the Philippines than in Thailand as their governments have been less effective than the Thai government in curbing corruption.
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The article is divided into four sections. The first section describes the policy context in Indonesia, the Philippines and Thailand. The second section identifies the various causes of corruption in these countries. The third section examines the anti-corruption strategies employed by the governments in the three countries. The final section assesses the consequences of corruption in the three countries in terms of the effectiveness of their anti-corruption strategies. Policy Context Table 2 compares the policy contexts in Indonesia, the Philippines, and Thailand in terms of several aspects. First, Indonesia is the largest of the three countries as it is an archipelago with a total land area of 1,904,443 sq kms. Thailand is the second largest, followed by the Philippines. Second, in terms of population, Indonesia has 214.8 million people, the Philippines has 77.1 million people, and Thailand has 63.6 million people. Third, Thailand's GDP per capita is nearly twice than of the Philippines, and 2.6 times that of Indonesia.
Table 2 Policy Contexts of Indonesia, the Philippines and Thailand
Policy Context Land Area (sq km) Population (million) GDP per Capita Colonizer Political System Role of Military Dominant Religion Indonesia 1,904,443 214.8 US$680 Dutch Democracy Important Islam The Philippines 300,000 77.1 US$930 Spanish and Americans Democracy Not important Roman Catholicism Thailand 513,115 63.6 US$1,800 Not applicable Constitutional Monarchy Important Buddhism

Source: The Economist (2003: 152, 184, 214) 237

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Fourth, Indonesia was colonised by the Dutch for 340 years (16021942), the Philippines was colonised by the Spanish (1565-1898) and the Americans (1898-1913), but Thailand was never colonised. Fifth, Thailand is a constitutional monarchy, while Indonesia and the Philippines have reverted to democracy after many years of authoritarian rule under President Suharto (1966-1998) and President Ferdinand Marcos (1965-1986). Sixth, the military has played an important role in politics in both Indonesia and Thailand, but not in the Philippines. Finally, the dominant religion in the three countries is different as Indonesia is predominantly Muslim, the Philippines Catholic, and Thailand Buddhist. The above similarities and differences in the policy context of the three countries should be borne in mind in the subsequent analysis of the causes and consequences of corruption. Causes of Corruption In his comparative study of the control of bureaucratic corruption in Hong Kong, India and Indonesia, Palmier has identified three factors as important causes of corruption: opportunities (which depended on the extent of involvement of civil servants in the administration or control of lucrative activities), salaries and policing (the probability of detection and punishment). Palmier's (1985: 271-272) hypothesis is: [B]ureaucratic corruption seems to depend not on any one of the [three] factors identified, but rather on the balance between them. At one extreme, with few opportunities, good salaries, and effective policing, corruption will be minimal; at the other, with many opportunities, poor salaries, and weak policing, it will be considerable [emphasis added]. Thus, following this hypothesis, an effective anti-corruption strategy should reduce or remove the opportunities for corruption, raise the salaries of civil servants and political leaders, and ensure a high degree of policing.
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Low Salaries Palmier has identified low salaries as an important cause of corruption. "If the official is not to be tempted into corruption and disaffection, clearly there is an obligation on the government to provide or at least allow such benefits as will ensure his loyalty; one might call it an implicit contract" (Palmier 1985: 2). Thus, "adequate pay" becomes "an essential ingredient in reform" (Palmier 1985:6). Similarly, Mauro (1997: 5) has argued that "when civil service pay is too low, civil servants may be obliged to use their positions to collect bribes as a way of making ends meet, particularly when the expected cost of being caught is low." In Indonesia, corruption was a serious problem during the Dutch colonial period as the salaries of the Dutch East India Company's personnel were inadequate. Day (1966: 100-103) observed that these personnel "were underpaid and exposed to every temptation that was offered by the combination of a weak native organisation, extraordinary opportunities in trade, and an almost incomplete absence of checks from home or in Java." Corruption became endemic during President Soekarno's rule because his "disastrously inflationary budgets eroded civil service salaries to the point where people simply could not live on them and where financial accountability virtually collapsed because of administrative deterioration" (Mackie 1987: 8788). In 1969, Smith (1970:28-29) conducted a survey of regional civil servants in Indonesia and found that "there is not a single official who can live by his government income alone" as the "official income amounts to approximately half of [his] essential monthly needs." A more recent survey on corruption in Indonesia of 2,300 respondents (650 public officials, 1,250 households and 400 business enterprises) found that low salaries were identified as the most important cause of corruption by 51.4 percent of the public officials, 36.5 percent of the business enterprises, and 35.5 percent of the households (Partnership for Governance Reform 2001: 39, Figure Gl). Corruption was introduced into the Philippines during the Spanish colonial period, when corruption prevailed as the civil servants were poorly paid and had many opportunities for corruption (Corpuz 1957:
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129). In contrast, the bureaucracy was less corrupt during the American colonial period (1898-1913) as "the bureaucrats received higher salaries and corrupt officials were promptly prosecuted" (Quah 1982: 159). Civil servants in contemporary Philippines describe their salaries as "starvation wages" which are inadequate to meet the needs of their families (Chua & Rimban 1998:154). Consequently, their low salaries compel them to sell goods in the office, hold a second job, teach parttime, practise their profession after office hours, work as researchers and consultants, and resort to petty corrupt practices (Padilla 1995: 195-202, 206). The origins of corruption in Thailand can be traced to the 16th century, when civil servants withheld revenue collected for the King for themselves as they were not paid regular salaries and sent only a small amount to the King (Chai-Anan 1977: 1-4). This tradition of officials retaining part of the royal revenue was difficult to eradicate, and it remained even after the creation of the Revenue and Audit Offices in 1873 by King Chulalongkorn, who later introduced a salary system and ordered all tax collections to be returned to the King regardless of the quantity (Chai-Anan 1977: 7). Suwanagul (1962: 79-80) found that the low salaries of Thai civil servants during the post-war period contributed to more bureaucratic corruption as their low salaries were insuffucuent to meet inflation and below those offered in the private sector. Recently, Thailand's police chief, General Sant Sarutanond, admitted that Thai policemen "are undereducated and underpaid and that is the reason why they are corrupt." According to him, commissioned police officers should be receiving a monthly salary of 20,000 baht (US$850) to meet their expenses in the large cities, but they are actually getting a starting monthly salary of 6,000 baht (S$260) (Straits Times [Singapore] 2002). In short, "if bureaucrats are paid a high enough wage, even a small chance of losing their jobs would discourage them from being corrupt." Conversely, if the real salary of civil servants decreases drastically, "even the most rigidly honest bureaucrats will be tempted to go beyond the law to preserve their standard of living" (Banerjee 1996: 110).

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Ample Opportunities for Corruption The scope of public administration has grown and the role of the public bureaucracy in national development has become important with the advent of the modern administrative state (Caiden 1971: 23-24). The expanding role of the public bureaucracy in national development has increased the opportunities for administrative discretion and corruption as "regulations governing access to goods and services can be exploited by civil servants in extracting 'rents' from groups vying for access to such goods and services" (Gould & Amaro-Reyes, 1983: 17). In Indonesia, Warwick has introduced the interesting distinction made by civil servants between "wet" and "dry" agencies, depending on their budgets and access to the public. According to Warwick (1987: 43): "wet" agencies . . . are generous with honoraria, allowances, service on committees, boards, and development projects, and, recently, opportunities for foreign training. They are departments that deal in money, planning, banking, or public enterprises. "Dry" agencies are those doing traditional administrative work. Perceptions of unfairness about benefits not only reduce staff morale, but lead to the feeling that illegal compensation is a fair way to even out staff benefits across agencies. Thus, "wet" agencies like the customs, immigration, internal revenue, and police will provide more opportunities for corruption than "dry" agencies like research and administrative departments, which do not interact directly with the public. According to Prawiro (1998: 230-231,264), Coordinating Economics Minister in Indonesia from 1989-1993, the tax office and the customs service were the most lucrative of the "wet" government agencies in Indonesia. Indeed, as "dry" agencies have reduced opportunities for corruption, "being posted to a dry position is about the worst fate any official could fear" (Loveard 1999: 111). In the case of the Philippines, the "wet" or vulnerable agencies
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are the Bureau of Immigration (BI), the Bureau of Customs, the Bureau of Internal Revenue, police agencies, the Department of Public Works and Highways, and the Department of Education, Culture and Sports (DECS). For example, in 1996 retired Colonel Salvador Rodolfo, a former intelligence consultant of the BI, identified the BI as "the worst agency in the Philippine republic enmeshed in graft and corruption, and the only language spoken from commissioners down to clerks and janitors is money, money, dirty money" (Chua & Rimban 1998: 153). The police agencies are vulnerable "to being drawn to criminality because of their proximity to criminals" and are usually involved in drugs, gambling, prostitution or smuggling (Rocamora 1998: 17). A final example is the DECS, which "is fertile ground for corruption because it is oozing with money" as its budget in 1998 was 86.9 billion pesos or 18.9 percent of the national budget (Chua 1999: 6). In Chua's (1999: 7) words: There is so much money at DECS that it drives officials into a spending frenzy. The funds also draw a swarm of suppliers and contractors, many of them unscrupulous. There is so much available that even those outside DECS, especially politicians and other officials, demand a piece of the action. In Thailand, the Ministries of the Interior, Education, and Agriculture had the most number of corruption cases during 19701990. For example, the Ministry of the Interior had 857 cases of corruption during 1970-1972, 569 cases during 1981-1987, and 710 cases during 1989-1990 (Pasuk & Sungsidh 1996: 29-30). A 19921993 survey of 2,243 respondents in Bangkok and four regions found that the Police Department was perceived to be the most corrupt government agency by 33.7 percent, followed by the Ministry of Defence (27 percent), the Ministry of the Interior (26 percent), and the Department of Transport (22.5 percent) (Pasuk & Sungsidh 1996: 131, 155-156). Two Thai scholars have estimated that more than half of the "regular policemen working in police stations are involved in syndicated corruption. Low-ranking policemen are alleged to collect money in various ways and pass it on to their seniors" (Pasuk & Sungsidh 1996: 122).
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Thus, vulnerable or "wet" government agencies in the three countries provide ample opportunities for corruption because of their substantial budgets and access to the population. Indeed, excessive red tape and cumbersome administrative procedures in these agencies cause delay and provide the incentive for their clients to pay "speed money" to expedite the processing of their applications or to waive the requirements. Low Risk of Detection and Punishment As corruption is an illegal activity in all countries, those individuals found guilty of corrupt offences should be punished accordingly. However, in reality, the probability of detection and punishment of corrupt offences is low in Indonesia, the Philippines and Thailand as the public in these countries perceive corruption to be a low risk, high reward activity. The Indonesian Civil Service's weak disciplinary control is reflected in the difficulty in detecting corrupt behaviour among its members and the absence or light penalty for such behaviour. In his 1969 survey of regional economic planners in Indonesia, Smith (1971: 30) found that apart from the lack of incentives for correct behaviour, sanctions were also absent or rarely applied to those officials who were under-performing as "cultural norms effectively preclude punitive denial of the perquisites, however minor, that attend each position." Smith (1971: 30) concluded that "the common procedure for dealing with officials whose corrupt practices became open knowledge is to transfer them to new jobs before their activities gain wide attention." Similarly, when a senior Indonesian civil servant was advised to dismiss his indolent and corrupt subordinates, he replied that he could not do so because they "had large families to support and needed these jobs. Besides, they didn't earn enough anyhow" (Palmier 1985: 210). Finally, Palmier (1985: 280) found that corruption was rampant in Indonesia because it was tolerated as corrupt officials were seldom punished. Indeed, former President Suharto was charged for corruption in 2000, but the case was dropped on medical grounds. His youngest
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son, Tommy, was convicted in the same year for corruption, but he escaped. He was subsequently jailed for 15 years in 2002 for ordering the assassination of a judge (Associated Press, 2003). In August 2003, the Attorney General's Office stopped an investigation into alleged corruption by Suharto's eldest daughter, Siti Hardiyanti "Tutut" Rukmana, when the prosecutors could not find any irregularities in a deal involving a pipeline company owned by her and Pertamina, the state-owned oil company (The Star [Malaysia] 2003). In short, except for Tommy, no one else in "the Suharto clan" has been punished for their corrupt activities. When President Corazon Aquino assumed office in February 1986, "there was high expectation that the end of the culture of graft and corruption was near" (Varela 1995:174). She established the President Commission on Good Government (PCGG) to identify and recover the money stolen by the Marcos family and its cronies. Unfortunately, Aquino's "avowed anti-graft and corruption" stance was viewed cynically by the public as two of her Cabinet members and her relatives were accused of corruption. In May 1987, Aquino created the Presidential Committee on Public Ethics and Accountability (PCPEA) to respond to increasing public criticism. However, the PCPEA was ineffective as it lacked personnel and funds. In other words, Aquino's "honesty has not been matched by the political will to punish the corrupt" (Timberman 1991: 235). Beschel (1999: 8) observed that sanctions were imposed inconsistently in the Philippines, "with draconian punishment being meted out for relatively minor infractions and major crimes receiving lenient treatment particularly when they are committed by the rich, the powerful and the politically well-connected." Furthermore, when he compared the successful prosecution of corrupt offenders in Hong Kong and the Philippines, Beschel found that a person committing a corrupt offence in Hong Kong was 35 times more likely to be detected and punished than his counterpart in the Philippines as the number of successful prosecutions in 1997 was 8.24 cases per 10,000 civil servants in Hong Kong and less than 0.25 case per 10,000 civil servants in the Philippines. Thus, corruption has flourished in the Philippines because of the low risk of detection of corrupt offences and the low probability of
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punishment for such offences. In his memoirs, Senior Minister Lee Kuan Yew (2000: 342-343) of Singapore has attributed the lack of punishment of Marcos, his family and cronies for their corrupt activities to the "soft, forgiving culture" of the Philippines. He wrote: Only in the Philippines could a leader like Ferdinand Marcos, who pillaged his country for over 20 years, still be considered for a national burial. Insignificant amounts of the loot have been recovered, yet his wife and children were allowed to return and engage in politics . . . General Fabian Ver, Marcos's commander-in-chief... had fled the Philippines together with Marcos in 1986. When he died in Bangkok, the Estrada government gave the general military honours at his burial. In Thailand, the lack of policing was most obvious during 19751998, when the Counter Corruption Commission (CCC) was responsible for investigating allegations of corruption against civil servants. The passing of the Counter Corruption Act (CCA) in February 1975 transformed the Counter Corruption Committee into the CCC, whose members were appointed by the King with the approval of the Senate and House of Representatives. Apart from investigating allegations of corruption against public officials, the CCC also submitted proposals for preventing corruption and for revising administrative practices to the Cabinet and sent reports of its performance to the Prime Minister, the Senate's President, and the Speaker of the House of Representatives (Quah 1999c: 249). Unfortunately, the CCC was ineffective and it was viewed by its critics as a "paper tiger" without real teeth, as "it could only send reports to the prime minister and the cabinet" since it lacked "direct authority to punish public officials." Consequently, very few civil servants were punished for corruption. The CCC's ineffectiveness led to the CCA's amendment in 1987 to give it more power (Amara 1992: 242). However, in spite of this amendment, the CCC could not take action against politicians as it only had "the power to investigate a bureaucrat following a complaint." If the complaint was valid, the CCC would report it to the accused official's superior, who could order another investigation to decide whether the case should be sent
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to the public prosecutor for criminal charges or settled through departmental disciplinary action. Officials found "guilty" by the CCC were usually reprimanded or disciplined within the department concerned, as the public prosecutor would initiate new investigations as he would not use the evidence collected by the CCC (Pasuk & Sungsidh 1996: 180-181). In sum, the three major causes of corruption in Indonesia, the Philippines and Thailand are the low salaries of civil servants and political leaders, the many opportunities for corruption in "wet" or vulnerable agencies, and the ineffective policing or low probability of the detection of and punishment for corrupt offences. Anti-Corruption Strategies Indonesia The fight against corruption in Indonesia began after the 1955 election as corruption was rife especially in the area of import licenses. This led to the first attempt by the government to curb corruption and resulted in the arrests of those involved, including civil servants and a minister. In December 1967, President Suharto established the Team Pemberantasan Korupsi (Corruption Eradication Team or CET) within the Attorney General's Office to deal with corruption cases. However, the CET was ineffective because its efforts were blocked by influential men in the regime. According to a CET official, the "big fish" who were corrupt were protected by powerful men (Palmier 1985: 215). Student protests against corruption in Jakarta followed by press criticism of the government resulted in the creation of a special Commission of Four (Komisi IV) elder statesmen on 31 January 1970 by President Suharto to review the problem of corruption within the civil service and to make suggestions for improvement. The Commission presented seven reports on corruption in the state oil enterprise, the rice procurement agency, and the state forestry enterprise. However, its most important recommendation was the passing of the Prevention Against Corrupt Criminal Acts Bill in 1971. The Commission also recommended that civil servants should submit an annual return of their personal assets. This recommendation
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was accepted by President Suharto, who issued an Instruction in 1970 requiring all civil servants to conform to it. However, the civil servants ignored this requirement for nine years as by 1979, only 90 percent of them had submitted their annual returns (Quah 1982: 171). In June 1977, President Suharto issued Presidential Instruction No 9 of 84 which transferred the task of combating corruption to the National Security Agency (Kopkamtib), which was instructed to take action against "unofficial levies," including forced discounts, extortion and bribes. Kopkamtib initiated Operation Orderliness by making "lightning visits" to those "wet" government departments prone to corruption, and dismissing those civil servants caught red-handed on the spot. While some officials were arrested, Kopkamtib's major handicap was its inability to take action against those generals and senior civil servants involved in corrupt practices. For the next 21 years until President Suharto stepped down in May 1998, nothing was done by him to curb corruption among his family, ministers and cronies. Indeed, he was "most reluctant" to control the excessive behaviour of his children and grandchildren. Suharto was succeeded by President B.J. Habibie, who introduced two laws the Law on the State Organization Clean and Free from KKN (Law No 28 of 1999) and the Anti-Corruption Law (Law No 31 of 1999), which increased the penalty for corruption to a maximum of 20 years imprisonment or one billion Rupiahs in fine and created the Anti-Corruption Commission. The anti-corruption efforts of the Habibie administration exposed the problem of korupsi, kolusi dan nepotisme (KKN or corruption, collusion and nepotism) but were ineffective for two reasons. First, there was no serious attempt to "bring offenders to justice" during Habibie's presidency as KKN was viewed as a legislative problem to be resolved by introducing new laws. Second, the various institutions created by President Habibie to eradicate KKN "failed to perform, and no significant progress was made" (Assegaf et al 2002: 149). President Abdurrahman Wahid's administration inherited "a substandard legal system" and "a murky taxation system" which provided ample opportunities for corruption (Smith 2001: 11). President Wahid also inherited the new anti-corruption laws and the Joint Team for the Eradication of Corruption (TGPTPK) was formed
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in June 2000 according to Article 27 of Law No. 31 of 1999 to deal with "criminal acts of corruption that are difficult to prove" (Assegaf et al 2002: 168, fn 85). However, the TGPTPK team was ineffective because of the poor work commitment of its members, the lack of financing which resulted in the non-payment of its members' salaries for several months, and its lack of authority to investigate corruption cases which occurred before 1999 (Assegaf et al 2002: 169). The major problem undermining President Wahid's efforts in curbing corruption was that he was personally implicated in three corruption scandals: the "Buloggate" scandal where his private masseur, Suwondo, borrowed Rp 35 billion (about US$4 million) from the State Logistics Agency (Bulog or Badan Urusan Logistik) and distributing this amount among several persons and an airline company in which Wahid and Suwondo were connected; the "Bruneigate" scandal or Wahid's failure to declare to the state treasury a personal gift of US$2 million from the Sultan of Brunei; and the "Borobudurgate" scandal, which arose from Wahid's meeting with Tommy Suharto to arrange a presidential pardon for his jail sentence for corruption (Budiman 2001: 149). Needless to say, these scandals damaged Wahid's image and undermined his credibility in curbing KKN. When Megawati Sukarnoputri became president in July 2001, she inherited "a severely weakened presidency" and the unresolved problem of KKN (Sen 2002: 17). In her first state of the nation speech on 16 August 2001, she promised that her anti-corruption campaign would begin with her family and that corruption must be eliminated to strengthen Indonesia's democratisation. She also directed her cabinet ministers and senior civil servants to declare their assets to the state auditors. Furthermore, she indicated that her ministers would be held responsible if they were found to have given unlawful benefits to her relatives. She added: "If later it is found that any of the children have benefited from any project, or anything else, it will be the minister who will bear the blame" (BBC News 2001: 1-2). Megawati's remarks must be understood in the context of the rampant and blatant corruption perpetuated by former President Suharto and his family during the 32 years of his rule. According to Kingsbury (1998: 202):
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Corruption exists from the very lowest levels of government bureaucracy all the way up to the first family. Indeed, Suharto's close associates and family have made an art form of creaming off many of Indonesia's most profitable ventures (from the media to property, agriculture, manufacturing, banking, high technology, and so on), while being protected by monopoly regulations and their relationship to the president. Similarly, Backman (2001: 242) has referred to "the Suharto Clan" which consists of 18 members and includes his late wife, Tien, three sons, three daughters, six daughters-in-law and sons-in-laws, two grandchildren, a half-brother, a cousin, and a brother-in-law of his daughter, Titiek. It is, of course, premature to make any final assessment of Megawati's efforts in curbing KKN. She appears to be committed to eradicating KKN, but it remains to be seen whether she will demonstrate this commitment by supporting the new Anti-Corruption Commission's efforts in enforcing impartially the new anti-corruption laws. In June 2003, nearly two years after Megawati assumed office, the Coordinator of Indonesian Corruption Watch, Teten Masduki, accused President Megawati of not being committed in fighting corruption as she has delayed the establishment of an anti-corruption commission provided by the Anti-corruption Law No 30/2002 which was passed in November 2002 (Jakarta Post 2003). Three months later, the Chairman of the Supreme Audit Agency in Indonesia, Satrio B Judono, criticised the government's "lackluster efforts" in combating corruption as only 505 (or 8 percent) of the 6,162 suspected corruption cases reported by it were investigated by the Attorney General's Office and the National Police. Indeed, "the small number of cases actually acted upon by the government serve as more evidence that the country's half-hearted efforts to stamp out graft and corruption have again proven fruitless" (Xinhua News Service 2003). In the final analysis, the acid test of President Megawati's commitment to fighting corruption would be the treatment of former President Suharto: would she follow her predecessors' example of
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leaving him alone? Or would she re-open the corruption investigations against him in spite of his "ill health?" (Quah 2002: 34). The Philippines The fight against corruption in the Philippines began in May 1950, when President Quirino created the Integrity Board consisting of five members to investigate complaints of graft and corruption against civil servants. However, this first anti-corruption agency was shortlived as the lack of public support led to its dissolution five months later (Quah 1982: 159). After winning the 1953 presidential election, Ramon Magsaysay established the Presidential Complaints and Action Commission (PCAC) to reduce inefficiency and dishonesty in the civil service. The first anti-corruption law was the Forfeiture Law of 1955, which authorised "the state to forfeit in its favor any property found to have been unlawfully acquired by any public officer or employer" (Alfiler 1979: 324-325). Unfortunately, this law was ineffective as there were no conviction even after four years of its passage. President Magsaysay's untimely death in an air crash in 1957 led to the emergence of the Garcia administration (1957-1962), which abolished the PCAC and replaced it with the Presidential Committee on Administrative Performance Efficiency (PCAPE) and the Presidential Fact-Finding Committee (PFFC) in 1958 to implement the government's anti-graft campaign. In February 1960, President Garcia formed a third agency known as the Presidential Anti-Graft Committee (PAGC) (Alfiler 1979: 331-337). The second anticorruption law, the Republic Act (RA) No. 3019, entitled the AntiGraft and Corrupt Practices Act, was passed in April 1960. RA 3019 identified 11 types of corrupt acts among public officials and required them to file every two years a detailed and sworn statement of their assets and liabilities. President Garcia was succeeded by President Diosdado Macapagal, who served from 1962-1965. Macapagal created the Presidential AntiGraft Committee or PAGCOM. In 1965, Ferdinand Marcos replaced Macapagal as President and abolished PAGCOM and formed in its place, the Presidential Agency on Reforms and Government Operations
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(PARGO) in January 1966. Three other agencies were created to assist PARGO to fight corruption: the Presidential Complaints and Action Office (PCAO), the Complaints and Investigations Office (CIO), and the Special Cabinet Committee in Backsliding (Alfiler 1979: 339346). The third anti-corruption law, RANo 6028, which provided for the formation of the Office of the Citizens' Counsellor, was passed in August 1969, but was not implemented. President Marcos' declaration of martial law on 22 September 1972 "ended over a quarter century of robust, if often irresponsible and elitist, democratic politics" (Timberman 1991:75). The remaining anti-corruption laws were the four Presidential Decrees (PD) issued by President Marcos after the establishment of martial law. PDNo 6 identified 29 administrative offences and empowered heads of departments to dismiss guilty officials immediately. This resulted in the sacking of nearly 8,000 public officials. Two months later, PDNo 46 prevented public officials from receiving and private individuals from giving gifts on any occasion including Christmas. Finally, PD No 677 and PDNo 749 are amendments to RANo 3019, requiring all government employees to submit statements of their assets and liabilities every year, instead of every other year; and providing immunity from prosecution for those willing to testify against public officials or citizens accused of corruption (Alfiler 1979: 326-327). The Philippines is the Asian country with the most anti-corruption measures as it has relied on seven laws and 13 anti-graft agencies since it began its fight against corruption in the 1950s (Quah 1999a: 19). The proliferation of anti-graft agencies is the result of the frequent changes in political leadership as these agencies are either created or abolished by the President. From May 1950 to January 1966, five anti-corruption agencies were formed and dissolved as there were five changes in political leadership during that period. Similarly, President Marcos created another five anti-graft agencies during his 21 years in power because the first three agencies were ineffective and lasted between eight months and two years (Quah 1982: 168-169). In July 1979, President Marcos formed the Sandiganbayan (Special Anti-Graft Court) and the Tanodbayan (Ombudsman) by issuing PDNo 1606 and PDNo 1603, respectively. As discussed earlier, President Aquino created the PCGG and
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PCPEA to curb corruption but both were ineffective as some of the PCGG personnel were corrupt and the PCPEA lacked personnel and funds. The Ombudsman was "reborn" in 1988 but from 1988 to 1995, it "failed to attract much public scrutiny" as the "limelight" was "hogged by the more high-profile Sandiganbayan." Thus, instead of "inspiring confidence in the judicial system," the Ombudsman has elicited "only disappointment if not contempt among many of those seeking redress for the wrong done them by public officials" as it has taken a long time to process the complaints received by it (Balgos 1995:247-248). By December 1994, the Ombudsman had accumulated a backlog of 14,652 cases, or 65 percent of its total workload. In August 1997, the Ombudsman still had pending cases from 1979 (Balgos 1995: 250-251). In May 1992, Fidel Ramos was elected president for a six year term. He created the Presidential Commission Against Graft and Corruption (PCAGC) in 1994 to investigate violations of the antigraft laws by presidential appointees and appointed Eufemio Domingo as its chairman. After serving for three years, Domingo lamented that "the system is not working" because "we are not making it work" and the anti-corruption laws, rules and regulations "are not being faithfully implemented" (Balgos 1995: 267-268). Joseph Estrada succeeded Ramos as president and in his State of the Nation Address on 28 July 1998, he identified the struggle against graft and corruption as his major priority. In early 1999, he had requested the World Bank to formulate "a national strategy for fighting corruption." However, President Estrada did not implement the World Bank's nine-point strategy as he was himself accused of corruption.4 Estrada was succeeded by Gloria Macapagal-Arroyo on 20 January 2001. However, during her two years in office, improving economic growth and fighting terrorism were her major priorities. Consequently, the task of curbing corruption only became important in January 2003, when she launched a war against corruption, which included "lifestyle checks" on government officials. In August 2003, President Arroyo said that she and her family were willing to undergo the anticorruption checks she had ordered for government officials in response to opposition senator Panfilo Lacson's allegation that her husband had "amassed huge sums through graft and money laundering" (Straits Times [Singapore] 2003).
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Thailand In September 1972, the Board of Inspection and Follow-up of Government Operations (BIFGO) was formed as Thailand's first anticorruption agency. It consisted of five members and was responsible for investigating allegations of corruption against government agencies and officials. However, BIFGO was not effective as its members were not men of integrity, that is, they were guilty of corruption themselves. Accordingly, BIFGO was dissolved after the October 1973 Revolution, and in 1974 the Sanya government appointed a committee to probe into the wealth of Field Marshal Thanom, Prapass and Colonel Narong, who were the Chairman, Deputy Chairman, and Deputy SecretaryGeneral respectively (Quah 1982: 171-172). In May 1974, Prime Minister Sanya appointed an Anti-Corruption Committee (ACC) to investigate charges of corruption against public officials and to report its findings to the Prime Minister or minister in charge of the ministry concerned. As the ACC was an investigatory agency, it did not have any quasi-judicial powers. This meant that it had to rely on the Civil Service Commission and the Court of Justice to take legal action against corrupt officials. The ACC had examined more than 140 petitions by September 1974. In addition to investigating corruption cases, the ACC was directed to prepare an anti-corruption draft bill to supplement the Penal Code because its provisions were inadequate for fighting corruption. The draft bill was approved by the Cabinet in December 1974 and the CCA was passed by the National Assembly on February 1975. As discussed earlier, the CCA transformed the ACC into the CCC, which was ineffective for three reasons: its lack of powers to punish corrupt officials; the public perception in Thailand that corruption is acceptable and not against the public interest; and the constant conflict between the Cabinet and the Civil Service (Quah 1999c: 253-254). In 1982, I described Thailand's anti-corruption strategy as "hopeless" as its anti-corruption measures were inadequate and its political leaders unconcerned about curbing corruption (Quah 1982: 175-176). However, the situation has improved in recent years after Chuan Leekpai replaced General Chavalit Yongchai as prime minister in November 1997. The Constitution promulgated on 11 October 1997,
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or the "People's Constitution," is concerned, among other things, with making elected politicians and public officials accountable by introducing several measures to control corruption. Codes of conduct for politicians and civil servants have been formulated to prevent conflicts of interest. They are also required to declare their assets, liabilities, and their income tax returns (and those of their dependents) to the CCC when they assume and leave office and one year after leaving office. The CCC was strengthened and transformed in 1999 to the National Counter Corruption Commission (NCCC), which can bring cases to court and to cover the cases of politicians. The NCCC inherited the CCC's workload and problems and its nine members are appointed by the King for a term of nine years. It has a staff of 300 persons, of whom 130 are investigators. As its request for additional staff and funding was rejected, it devotes its efforts to auditing the assets of elected officials, which is time-consuming. The anti-corruption measures in the 1997 Constitution are an indication of former Prime Minister Chuan Leekpai's commitment to fighting corruption in Thailand. However, his weak political position as the prime minister of a coalition government and his inability to improve the economy, led to his defeat in the January 2001 general election, which was won by Thaksin Shinawatra's Thai Rak Thai Party. However, it remains to be seen whether Prime Minister Thaksin will be committed to fighting corruption as his predecessor as his relations with the NCCC are unlikely to be smooth because he was charged for falsely declaring his assets by the NCCC but this charge was not upheld by the Constitutional Court, which voted 8-7 in favour of exonerating Thaksin. Furthermore, the appointment of General Chavalit and others who are not known for their honesty in the Cabinet might also hamper theNCCC's anti-corruption efforts. Consequences of Corruption In 1964, Leff (1964: 8-14) contended that bureaucratic corruption had positive effects and contributed to economic development by providing the incentive for entrepreneurs to mobilize the bureaucracy, by reducing uncertainty and increasing investment, by promoting
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innovation, by introducing competition into the economy, and by providing a safeguard against the losses of bad economic policy. However, more recent studies have shown that corruption has toxic rather than tonic effects (Carino 1986: 163-194). More specifically, the report on Human Development in South Asia (1999: 96, 105) concluded that: Corruption is one of the most damaging consequences of poor governance. It undermines investment and economic growth, decreases the resources available for human development goals, deepens the extent of poverty, subverts the judicial system, and undermines the legitimacy of the state. In fact, when corruption becomes entrenched, it can devastate the entire economic, political, and social fabric of a country . . . corruption breeds corruption and a failure to combat it effectively can lead to an era of entrenched corruption. Corruption became institutionalized during President Suharto's 32-year reign as his cronies and family were deeply involved in corrupt activities. In May 1999, one year after Suharto stepped down from power, Colmey and Liebhold (1999: 16) estimated that Suharto and his children had amassed "a $15 billion fortune in cash, property, art, jewelry and jets." In June 2003, Kartorius Sinaga, an Asian Development Bank (ADB) consultant, revealed that 40 percent of ADB loans allocated for development projects in the provinces of North Sumatra, East Java and West Nusa Tenggara, were lost to corruption. The ADB had provided a total of US$1 billion in loans to support 72 development projects in these three provinces during 19982003 (Antara [Indonesia] 2003). In December 1999, the World Bank estimated that the Philippines government had lost US$47 million annually or a total of US$48 billion to corruption during 1977-1997 (Torrijos 1999: 4). Another estimate by Morgan Stanley Research indicated that a sum of US$204 billion was lost to corruption during 1965-2001 (Philippine Daily Inquirer 2003). In July 2003, Senator Edgardo Angara revealed that the Philippines government was losing P22 billion annually to corruption in the procurement of supplies and bidding of government contracts
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(Clapano 2003). Finally, in the case of Thailand, Pasuk and Sungsidh (1996: 39, 41) found that: [T]he rate of corruption was highest in the Chatichai period at 633.3 million baht per year, as compared to 86.3 million for Sarit, and 60 million baht in the case of Thanom-Praphat . . . When the corruption amount is expressed as a percentage of the government budget, then the Sarit period leads. Sarit's proven revenue from corruption amounted to 6.3 percent of the capital expenditure budget compared to 1.0 percent by Thanom-Praphat and 1.1 percent by Chatichai and his ministers. While all three countries have suffered from the negative effects of corruption, especially in terms of lost revenue, a more careful assessment of the consequences of corruption can be made by examining how these countries fare in terms of their ranking on the CPI and two indicators on the Global Competitiveness Index. Ranking on the CPI, 1995-2003 Table 3 shows that Thailand's ranking and score on the CPI from 19952003 are consistently higher than those of the Philippines and Indonesia, except for 1998-1999, when the ranking and score of the Philippines are higher than those of Thailand. In all three countries, their ranking was the highest in 1995, and the worse ranking was in 2003, when Thailand was ranked 70th, the Philippines 92nd, and Indonesia 122nd. In sum, Thailand is perceived to be less corrupt than the Philippines and Indonesia especially after 2000, which is a reflection of the NCCC's efforts in combating corruption in recent years. Ranking on Global Competitiveness Index, 1999-2001 To supplement the CPI, we will compare the ranking of the three countries on two indicators of the Global Competitiveness Index (GCI)
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Table 3 Ranking of Indonesia, the Philippines and Thailand on the Corruption Perceptions Index, 1995-2003
Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 Average Indonesia 41 (1.94) 45 (2.65) 46 (2.72) 80 (2.00) 96(1.70) 85(1.70) 88(1.90) 96(1.90) 122(1.90) 78 (2.04) The Philippines 36 (2.77) 44 (2.69) 40 (3.05) 55 (3.30) 54 (3.60) 69 (2.80) 65 (2.90) 77 (2.60) 92 (2.50) 59(2.91) Thailand 34 (2.79) 37 (3.33) 39 (3.06) 61 (3.00) 68 (3.20) 60 (3.20) 61 (3.20) 64 (3.20) 70 (3.30) 55(3.14)

Source: http://www.transparency.org The scores are indicated within the brackets.

from 1999-2001: the competence of public officials, and public trust of politicians in Tables 4 and 5. Table 4 shows that in terms of the competence of public officials, Thailand's average rank is 39, followed by Indonesia's 45th ranking, and the Philippines' 51st ranking. Similarly, Table 5 shows that the level of public trust of politicians is higher in Thailand (37th ranking), followed by Indonesia (44th ranking), and the Philippines (53rd ranking).

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Table 4 Competence of Public Officials in Three Countries on the Global Competitiveness Index, 1999-2001 Country Thailand Indonesia Philippines 1999 Rank 37 43 49 2000 Rank 35 43 45 2001 Rank 44 48 58 Average Rank 39 45 51

Source: The Global Competitiveness Report 1999 (2000: 242); The Global Competitiveness Report 2000 (2001: 238); and The Global Competitiveness Report 2001-2002 (2002: 399). Table 5 Public Trust of Politicians in Three Countries on the Global Competitiveness Index, 1999-2001 Country Thailand Indonesia Philippines 1999 Rank 45 41 49 2000 Rank 30 39 57 2001 Rank 37 53 52 Average Rank 37 44 53

Source: The Global Competitiveness Report 1999 (2000: 327); The Global Competitiveness Report 2000 (2001: 253); and The Global Competitiveness Report 2001-2002 (2002: 408).

In short, the two indicators on the GCI from 1999-2001 also confirm that Thai civil servants are more competent than their Indonesian and Filipino counterparts, and that the level of public trust of politicians in Thailand is also higher than that in Indonesia and the Philippines. What is also surprising is that the Philippines has a lower ranking on both indicators than Indonesia even though its average ranking on the CPI is better than that of Indonesia. Conclusion Our comparative analysis of the causes and consequences of corruption in Indonesia, the Philippines and Thailand shows that, first, corruption
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is a serious problem in all three countries because of the low salaries of civil servants and political leaders, the ample opportunities for corruption in the "wet" public agencies, and the low probability of detection and punishment of corrupt offenders. Second, while corruption has negative consequences for all three countries, judging from their average ranking on the CPI from 1995-2003 (78th position for Indonesia, 59th position for the Philippines, and 55th position for Thailand), the consequences for Thailand are less serious because of theNCCC's efforts in curbing corruption since its inception in 1999. The promulgation of the 1997 People's Constitution and the subsequent formation of the NCCC in 1999 show that, unlike their counterparts in Indonesia and the Philippines, the Thai political leaders have demonstrated the political will to fight corruption. While the battle for corruption in Thailand has not been won yet, the creation of the NCCC and its efforts in investigating "big fish" including Prime Minister Thaksin Shinawatra, augurs well for the future and demonstrates that Thailand is no longer a "hopeless" case. Thus, the situation in Indonesia and the Philippines in terms of curbing corruption will only improve if their political leaders follow the example of the Thai political leaders by creating an independent anti-corruption agency to enforce impartially the anti-corruption laws in their countries.

Notes
1. For examples of such research, see Palmier (1985), Carino (1986), Quah (1999a), Quah (1999b), Lindsey and Dick (2002), and Kidd and Richter (2003). 2. Brunei Darussalam, Cambodia and Laos have not been included in the CPI from 1995-2003. 3. For Indonesia, see: Holloway (2002), Lateef (2003), Quah (2002), RobertsonSnape (1999), Soetjipto (2002), and Sunaryadi (2001). For the Philippines, see: Batalla (2001), Chua (1999), Coronel (1998, 2000), Moratalla (2000), and Quah (2003). For Thailand, see: Borwornsak (2001), Laird (2000), Maneewan and McLean (2003), Pasuk and Sungsidh (1996), Sakkarin (2000), and Thinapan (1978). 4. For two assessments of Estrada's fall from power, see Doronila (2001) and Laquian and Laquian (2002).

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Jon S T Quah is Professor of Political Science at the National University of Singapore and Co-editor of the Asian Journal of Political Science. The article is a revised version of a paper presented at the American Society for Public Administration 64th National Conference on "The Power of Public Service" in Washington, DC, 15-18 March 2003.

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