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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (7325)	10/28/1998 8:32:00 PM
From: Dayuhan	Respond to of 9980

Stitch, Missed your corruption question while switching between home and office computers. Obviously, much depends on the definition and perception of corruption. If you mean outright bribery, delivery of suitcases full of bills in the middle of the night, yes, it is certainly more prevalent here. But if you expand the definition a bit, the equation changes. How much do you think has been earned, how many favors bought, with the timely dispersal of inside information on volatile stocks? Since Perky mentioned banks, I'll leave it to him to describe the sort of thing he means. In the foreign aid/foreign loan world, I can think of a couple of examples right off: 1. Aid agencies, whether government or multilateral, often award huge sums of money in consulting contracts. The consultants have to be chosen from a short list determined by the lender, mainly firms that are composed of former employees of the same agencies. This effectively prohibits ideas from outside the tent, and keeps the money inside the tent. The money never gets near the country in question, the work is often inappropriate or derisory (though always impressively bound and studded with charts and figures), and the bill is paid by the taxpayers of the borrowing nation. 2. Much official aid, and many official loans, are made less to assist a developing country than to subsidize manufacturers in the lending country. A classic example is the Philippine Nuclear Power Plant. Westinghouse bid $500 million for two reactors, plus $26 million to Marcos to nose out GE. The US Eximbank provided the funds. Price ended up being $2 billion for one reactor. It is the most expensive power plant ever built; fundamentally flawed in design and execution and impossibly badly located, it will never generate a single watt of electricity. The Eximbank subsidized the Westinghouse Nuclear Construction Division for years (it was their sole project, and they milked it for all it was worth), and the Philippine taxpayer picked up the bill. Is picking up, I should say, the interest still runs on the order of $300,000 a day, I've been told. The question is, did anyone at the Eximbank monitor the project to ensure that the money was being well and wisely spent? Were they concerned with giving value to the buyer or with providing a continuing revenue stream to the seller? I could go on and on, the list is endless, but the point should be clear. Steve