The Spectre of Corruption - From top to bottom, from the West to the East

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The Spectre of Corruption - From top to bottom, from the West to the East

The globalised economy has done wonders in decreasing market distortions that obstruct the laws of free enterprise. Trade barriers and State-run monopolies are easy to spot, and therefore easy to adapt to. Rarely are they the reason for a company deciding against doing business with, or setting up operations in, a country.

The major market distortion today is due to corruption, an issue that seems to be increasingly complicated, causing greater unpredictability in markets. For India and China, possibly the most recurring and important question is how corruption may hold them back from reaching their potential, and how it can be alleviated.

Corruption is, by its nature, a sensitive subject, and difficult to measure, as few are honest about participating in it.  Even the definition of corruption is dependent on cultural perspectives. In some instances, particularly in developing nations, the practice of incentivising those in a position to expedite requests can possibly have the effect of increasing efficiency and seen to be a form of tipping.  

While the West prides itself on appearing to have eliminated corrupt practices, I see the continuing slide in their competitiveness as simply being another form of corruption.

I was following the news of the new leadership in China being installed, interspersed with reports of the CIA director David Petraeus stepping down. An intricate marital affair had been uncovered. The story also included the top commander for Afghanistan, John Allen. With the expansive email correspondence that the FBI found, it left me with the impression that these leaders must be incredible at multi-tasking, or they really literally have no time or focus for getting any work done at all. Which, granted, explains a lot.

The problem is not that the men in leadership positions are repeatedly abusing the trust and power placed in them. Rather, we have been made to accept these behaviours, and that there are different sets of moral codes that apply. Or, rather, that do not apply to those in positions of power.

The escalation of what I am describing has been extreme in the last five years alone. The banks and rating agencies that conspired and profited from junk debt being given Triple-A ratings and sold to gullible investors is not too different from the former IMF chairman taking too many liberties with a New York chamber maid.

One would almost think that egregious displays of recklessness and hedonism are the traits of any male leader, whether it is in politics, business, military, the Catholic Church or in entertainment. They are becoming ever more difficult to tell apart! The acts of transgressions themselves are not so frowned upon anymore. It is when our leaders lack the skill to avoid getting exposed that we feel let down.

The failure to live up to a certain moral standard is not the problem in itself for the economies in the West. It is the corruption it breeds in how the most crucial individuals whom we count on to give direction are left unchecked for having even basic competencies, judgment or even accountability as opposed to the expectations that we have from every functioning member in society.

We have got it the wrong way around when prosecuting even minor infractions of a minimum wage labourer becomes a bigger priority than monitoring those in positions of power to see that they even do any work at all.

Whether an emerging economy or a member of the G8, how corruption is dealt with will unquestionably influences the ability to inspire confidence and attract investment.

As a yard stick, it is wise to apply the same scrutiny to oneself before laying claim to any moral superiority over anyone else. To recall the famous quote by Pogo: “We have met the enemy, and he is us”.

Oscar Wendel is the conference manager of Construction Week.

Two Sides of the Coin - Battle for Euro’s survival is a modern Greek Tragedy

Two Sides of the Coin - Battle for Euro’s survival is a modern Greek Tragedy

The continuing fight for survival of the Euro is a kind of a modern Greek tragedy, due largely to our hubris in conceiving the most ambitious financial and political endeavour in history, while being completely blind to our own weaknesses to long-term commitments and goals.

It was in 2002 that the Euro came into circulation. In 2011, talk of its imminent collapse emerged, and extraordinary measures to salvage the currency began with various emergency loans being made. However, compare the Euro’s decade-long track record to that of the Bank of England and its over 300-year-old Sterling Pound notes.

The EU launching the Euro now comes across as a kid that has grown up on super-hero comics and action movies like Rocky, Rambo and Die Hard. He is convinced he can finish a marathon without training. Just set your sights high enough, He is then surprised to collapse after sprinting the first kilometre.

If I am to carry out a psychological evaluation on the EU as if it were an individual person, its issues and skewed perception of itself, which is obstructing it from dealing with reality, seem strikingly similar to the average European citizen. Both appear to be victims of outlandish ambitions and expectations to receive phenomenal results and compensation for very little effort.
There seems in general a lack of understanding that there is a connection between the values created by a person or a nation where their contribution is reflected as to what they can exchange these values for in the marketplace.

Instead, a naïve kind of belief has set in, a thinking that success is largely a matter of randomness. It is more about being at the right time, right place and having the right contacts, oftentimes by being at the right party. 

We have been seduced into believing that quick and radical results are going to come from sudden flashes of inspiration and willpower.

In hindsight, it may seem and be conveniently portrayed that individual inventors and leaders brought us forward in giant leaps. For instance, the idea of sole inventors spawning ideas from scratch in ‘eureka’ moments is a misperception. Even Graham Bell’s telephone and Thomas Edison’s lightbulb were the results of broad incremental improvements in an era where innovation over long periods enabled such paradigm shifts. 

The truth is that individual willpower is very limited in a larger perspective. How an individual performs in a society, and how society fares as a whole, is almost completely dictated by societal structure and its established norms, expectations and accepted behaviours. Though many like to identify themselves as rebels, humans are, by nature, hardwired to be flock animals. We simply do not dare to deviate that far from the group we are in. 

However, what separates us from animals is not any willpower to go against our environment; with enough time, almost all of us give in. What enables one civilisation to develop and outperform others is how we, as humans, are able to consciously and purposefully design, influence and set the norms of accepted behaviours for the group.

To paraphrase Confucius, all men are created equal; it is their habits that distinguish them. This is worth keeping in mind when contemplating the path forward for Europe. Societies that encourage or accept the behavioural norm of a semi-passive state of Facebook hypnosis and consumption of light entertainment, soft drinks and fast food may not lead to the desired type of long-term growth.