“Schools without roofs”

Peter Egens Pedersen heads the Asian Development Bank’s Office of Anticorruption and Integrity. In an interview with Hans Dembowski, he discussed the challenges of fighting corruption in the continent.

How do you define corruption?
That is a tough question. There are many different understandings of the term. In Asia, if people complain about corruption, they often just mean that they do not agree with something…

…for instance, that the government is spending too much money on an ethnic or religious community they don’t belong to, even though such expenditure may be correct in legal and political terms.
Exactly. But of course they may also be speaking of corruption in the Western sense which is about influencing decisions of officials with things of value. It isn’t always money, it can just as well be presents or invitations to travel. The ADB uses a definition it shares with the World Bank and other international finance institutions.

Do all staff members of the ADB share that understanding?
At first, they probably don’t, they come from many different cultures. That is why we train them. The Bank forces its understanding on them. This really is a touchy topic. What is considered a token of appreciation or friendship in one culture may clearly be corruption in another. So we have to enforce our rules.

But mustn’t ADB staff in the country offices adapt to the culture prevailing where they are posted?
Yes, of course, but when it comes to corruption, they have to follow the ADB rules, even though they may seem rude when they reject things the Bank considers inappropriate. We insist they must not accept gifts or invitations. So often they’ll ask us: “Can I go on a lecture tour to Northern China?” Or they’ll ask: “Can I go to a conference in Singapore that is sponsored by Cathay-Pacific?” Our answer is no. We follow the principle that, if staff for professional reasons need to attend a conference or a workshop, the ADB will cover the costs. We tell them to blame us if they have to explain why they cannot accept an invitation or present. The Bank has clear rules on these matters.

Is there some kind of price-limit below which they are allowed to accept favours?
The ADB does have clear rules when it comes to what extent staff can accept gifts, including favours and benefits. In many cases, lunch invitations, for instance, it is a question making a sound judgement. However, in principle any gift has to be declared, and gifts that exceed a value of $ 50 must either be rejected or – should that not be possible – handed over to the Bank.

One of the most corrupt business sectors anywhere in the world is construction. It is troublesome in Germany too. What if some officer at the municipal level wants a bribe in relation to an ADB-funded infrastructure project?
The ADB is an international organisation. We can, through our governance policy, put pressure on a country’s government, and normally that will do to prevent low-ranking officers from making such demands. Our partners want to do business with us in the long run, moreover. Sometimes, the ADB has decided to stop cooperating with individual authorities because they were considered not to adhere to the ethical standards expected by the Bank. We have also, since 1999, debarred 368 firms and 364 individuals from doing business for the same reason.

Did the ADB ever withdraw from a country?
No, it did not. And it wouldn’t make much sense. I believe the World Bank once withdrew from Kenya, for a month or so. What difference did that make? We also face an ownership issue. The ADB belongs to 67 countries, how are we going to tell one of them that we are withdrawing?

Do you support governments that run anticorruption campaigns?
Yes, of course. Our office does not, it is too small, but the Bank does. To be honest, I am personally not too impressed by such programmes. They are often very formalistic. Most anticorruption commissions do not have much bite. And that isn’t surprising. A government on its own cannot do very much about corruption. Governments are usually not corrupt, individual persons are. And if their behaviour is more or less socially accepted, there is not much the government can do.

Corruption can be built into bureaucracies. In India, for instance, civil servants and judges are not paid well. It is obvious that they somehow back up their incomes.
Yes, that is a serious problem. In Suharto’s Indonesia, there even used to be a kind of list that defined what percentage of what kind of bribe would go to whom in the administration. The black money, in other words, was considered part of the salary. And schemes of bribe-redistribution within a bureaucracy have been found in other countries too. The only way to stop these things in the long run is civil-service reform along with decent salaries. But that is a very daunting challenge, it will often not be politically feasible. It is, however, a challenge that the ADB does try to rise to through technical assistance and its Second Governance and Anticorruption Action Plan.

Some people argue that corruption works, so one shouldn’t be too fussy.
To an extent, even I would agree. In the Philippines, the mayors of small municipalities collect money, for instance, when they issue a driver’s licence. When election time comes, they’ll hand out some of that money to voters again, and they will re-elect them. The mayors are also likely to want to leave a mark, so they’ll build a bridge or a hospital that will carry their name. The local people don’t consider that corruption, they see it as a kind of tax. If you dismantle systems like that in rural areas, the people will probably be worse off because, if the mayor doesn’t take care of these things, no one will. But at the national level or in big cities, such systems are plainly destructive. They don’t deliver the goods that are needed. Far too often, they result in bridges that collapse or schools without roofs. To really make a difference, civil society has to decide that it has had enough and will not accept corrupt activities anymore.

You probably define civil society in a comprehensive sense, including non-governmental organisations (NGOs), business associations, religious communities, the media and so on?
Yes, civil society is more than just NGOs. The NGOs are important, but they don’t represent all of society. If we want to tackle corruption, the business sector is very important. If companies decide they will no longer pay bribes, that will make a huge difference.

There is an inherent dilemma of fighting corruption. The more the issue is discussed, the more people become aware of it – but it doesn’t disappear, the list of known cases just keeps getting longer. Some people become disillusioned and cynical.
Yes, that may happen, though I’d say we haven’t been fighting corruption for long. In Asia 10 years ago, this wasn’t an issue. And things do change. In Indonesia, after Suharto, suddenly there were lots of allegations. Some were nonsense, but many were substantial. People’s attitude certainly changed, and fighting corruption is now a serious issue in the country. It is a serious political issue in the Philippines too. President Noynoy Aquino won the elections this year on an anticorruption platform. Let’s see what he’ll be able to do.

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