Corrupt and Unequal

NEW YORK – The stunning fall from grace and power of the Chinese politician Bo Xilai, and the continuing revelations concerning the enormous wealth that he and his family illicitly amassed, has gripped the world’s attention. Bo’s case exemplifies what many in China believe to be endemic corruption among officials, and highlights the widening divide between ordinary people and those with political connections. But the easy coexistence of rising corruption and growing inequality can be seen throughout the region.

I saw it myself one evening in 2008. While navigating my motorbike through Ho Chi Minh City’s thick traffic, I was quickly overtaken by a black Bentley, horn blazing, lights flashing, and sporting red “ngoai giao” diplomatic plates. I didn’t, and still don’t, know any diplomats with the means to purchase a Bentley. As Vietnam’s Youth Newspaper reported in 2010, there is an underground market for diplomatic license plates: for about $20,000, the purchaser can avoid tens, even hundreds, of thousands of dollars in customs duties. Diplomats in Vietnam were using their tax-free status to import vehicles on behalf of wealthy Vietnamese buyers, or selling their license plates at the end of their postings.

While this year’s Asian Development Outlook 2012, published by the Asian Development Bank (ADB), recognizes “swelling income disparities” in the region, there is almost no mention of persistent corruption, particularly in Southeast Asia. Of course, corruption is not unique to the region; but six of the ten members of the Association of Southeast Asian Nations ranked in the bottom half of Transparency International’s annual Corruption Perceptions index.

Corruption is a more important factor in rising economic inequality than the ADB recognizes, and undermines programs aimed at closing gaps between the region’s wealthiest and its poor. Increased spending on social programs, as suggested in the ADB report, will not succeed if officials are syphoning state funds for personal gain.