Indonesia is ranked as the most corrupt country in Asia by foreign businessmen in the region, raising fears about how billions of dollars in post-tsunami aid will end up, a new survey shows.
The Philippines and Vietnam also came in at the bottom of the annual graft rankings by the Political and Economic Risk Consultancy Ltd. (PERC), which listed Singapore, Japan and Hong Kong as the cleanest places for business.
"The issue of corruption could make or break Indonesia," said PERC, which polled over 900 expatriate respondents across Asia in January and February.
It said "relative outsider" Susilo Bambang Yudhoyono was elected Indonesian president last year partly because voters were "disgusted with the corruption of an entrenched, secular elite." PERC urged Yudhoyono to make sure that foreign aid was used transparently in projects that benefit people and areas affected by last December's tsunami that left over 220,000 Indonesians dead or missing, mostly in Aceh province.
If the former general succeeds in fighting corruption, the economy would improve and radical Islamic groups such as Jemaah Islamiyah "will be much more marginalized and less of a threat to the country and the region." In the PERC survey, now into its 18th year, countries are graded between zero – the best possible score – and 10.
Singapore's grade was an almost pristine 0.65, followed by Japan at 3.46 and Hong Kong at 3.50. Next, but far behind, were Taiwan at 6.15, South Korea at 6.50, Malaysia at 6.80, Thailand at 7.20, China at 7.68, India at 8.63, Vietnam at 8.65, the Philippines at 8.80 and Indonesia at 9.10.
Indonesia's post-tsunami relief program "presents a real opportunity to improve the governance and transparency standards" for disbursing aid money not only there but in other developing countries, PERC said.
At the other end of the scale, foreign businessmen have consistently rated Singapore as being the least corrupt country in Asia, but the view is not shared by opponents of the People's Action Party (PAP), which has ruled the city-state since independence in 1965, PERC said.
This could cause problems for Singapore overseas since key PAP critics live in exile and could raise questions about Singapore's "systemic integrity" as state-linked companies expand abroad, PERC said.
In the Philippines, a regular bottom-dweller in the survey, "corruption is clearly less today" than it was in the worst days of the late dictator Ferdinand Marcos, who was overthrown by a popular revolt in 1986.
But it was more difficult to say whether the current government of President Gloria Arroyo "is any cleaner or dirtier" than her ousted predecessor Joseph Estrada, now on trial for alleged corruption.
Elsewhere in Southeast Asia, booming Thailand's image has improved following a crackdown on graft, but PERC said there were laws, regulations and practices "that benefit certain large industries and businesses, many of which happen to have close links with influential politicians." In Malaysia, Prime Minister Abdullah Ahmad Badawi has generated strong public support with his anti-graft stance, but allegations of internal corruption in the ruling coalition have resurfaced, PERC noted.
Communist countries such as China and Vietnam take extreme measures against corruption such as executing offenders, but they still have a worse reputation than Western countries because they lack democratic checks and balances and free elections, PERC noted.
Hong Kong-based PERC provides advice to companies and governments on how to do business in Asia.