Conservative estimates place the magnitude of corruption at as much as 5% of annual GDP in some of Asia's most dynamic economies, causing business losses in the millions, higher crime rates and severe social suffering. How can regional leaders step up the fight against corruption and create better incentives for corporate governance?
Key Points
• Corruption has been exacerbated by the increasing complexity and opacity of global supply chains.
• Illicit trade is inextricably intertwined with corruption: it is enabled by corruption, and the money generated through illicit trade funds corruption.
• Good corporate governance practices are being passed from multinational to national companies, which are now taking on the mantle of fighting corporate corruption.
• Streamlining government and implementing electronic systems that improve transparency can minimize opportunities for corruption: every form or stamp is a chance to take a bribe.
Synopsis
Corruption remains a deep-rooted and pervasive problem worldwide, with globalization presenting both new opportunities for corruption and increased challenges in identifying and attacking it. But increasingly governments are recognizing that it is not a victimless crime – that it enables, and is in turn encouraged by, other forms of criminal activity, and that it often impacts the poorest, most at-risk strata of society.
Corporations, both multinationals and national companies, are recognizing that corruption is not the competitive advantage it may once have been perceived to be.
US firms that initially complained of being hobbled in competition by the Foreign Corrupt Practices Act are now realizing that it has been a blessing: US multinationals are solicited for bribes less often, and contracts come under less scrutiny. And firms that once operated under the belief that gradations of acceptable behaviour were necessary across different geographies are now realizing that a single set of ethical standards better serves their interests.
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