In a recent comment on Patricio Mangubat’s A new morning for everyone, Ishmael Ahab came up with a very insightful perspective on how investors perceive corrupt societies as business environments.
I think that it is not corruption, per se, that is shooing foreign investors away. Foreign investors main goal is to generate income for their businesses, and it does not matter if the countries where their businesses were located are corrupt or not. As long as they have a steady flow of income, then they will stay.
Corruption in a country will be a problem for them if the kind of corruption that that country has is unpredictable and unreliable. Businessmen can tolerate bribing officials as long as they got what they need in every bribery dealings.
Maybe the Philippines has that kind of corruption, Unpredictable and unreliable corruption that is bad for business.
This is an instance of very insightful lateral thinking.
A coherent, consistent, and predictable framework of corruption can work for business — probably the way organised crime works with legitimate business in New York City and Chicago for example. As a matter of fact, it is not too different from Ben Kritz‘s own insight on how the Machine works in Chicago — his home town, specifically:
[...] I guess I don’t have quite the same sense of moral outrage that some other people have about corruption among government officials. I can’t help it; I grew up in Chicago, where corruption is a form of government. My early years saw the benevolent dictatorship of The Honorable Richard J. Daley, a mean, ugly bastard who was so crooked he probably needed a corkscrew to get out of bed in the morning. Big Dick had his critics, but for the most part he was wildly adored by the common people of our fair city. That’s because he never forgot that there were more of them than there were of his cabal of political appointees, shady union bosses, Mafiosos, and sleazy Aldermen, and he saw to it that the regular people would continue to see a reason to keep him in office. The streets got plowed promptly when the snow fell, the trash was picked up, and his largesse toward ordinary folks who needed a helping hand — a job, help with medical bills, a little money to buy the kids proper shoes for school — was legendary.
Of course it wasn’t free; sometimes the return of favor was stated — “Vote for Alderman So-and-So in the next election. And tell your friends.” And if one actually believed their vote was secret and tried to go their own way, well…. Suffice to say they’d get an unpleasant visit from someone later on.
The ultimate point of Kritz’s article, which I will go into a bit later, is quite different from the point I will make in this blog article.
The point Yours Truly is trying to make here is this:
Even in the business of corruption, Filipinos are third-rate.
Although the Philippines ranks way up there along with Angola in the business of corruption, we are not exactly famous for turning criminal activity into a world-class management “science” the way the Italian, Russian, Chinese, and Japanese mobs have. Where there is “science” and structure, there is stability and predictability. And guess what, stability and predictability happen to be music to the ears of people we need the most: investors.
Our talent for shortsightedness extends beyond our efforts at legitimacy and well into our culture of crime!
Investors, on the other hand, are forward-looking and as a matter of habit routinely assess a prospect’s risk outlook. Corruption is merely another parameter used to assess risk. And wherever there are unpredictable and volatile parameters, risk goes up and the sex appeal of the investment prospect goes down.
Interestingly enough, I once implied an analogy between Pinoys and tapeworms in a previous article, I might downgrade that comparison a bit further by likening Pinoys more to a lower form of life — the Ebola virus — and in the process cast a more favourable light on the humble tapeworm. Whereas a tapeworm keeps its host alive for years (most of them living pretty much normal lives over a normal lifespan) while it leads a parasitical existence in their gut, the Ebola virus in many instances is so virulent as to kill its victims before it has a chance to spread its own DNA to another host.
Rather than nurture the environment that feeds them, Pinoy chieftains and oligarchs like typical morons pull the rug from under their own feet. The Average Pinoy Schmoe for his part eats up the medieval tagline of organised religion that Corruption is plainly “evil” without first understanding the finer points of this so-called evil; which brings us to the point Kritz actually makes in his article:
People in Chicago have always been willing to sacrifice democratic idealism, so long as they felt the corrupt despot they were putting into office was one of their own. People in the Philippines, by contrast, never champion one of their own.
By eating up the hollowheaded “good” and “evil” morality shoved down our throats by religious dogma, we ironically degrade, convolute, and pervert the social contract we live off on. Just like how the slapping of the “evil” word on divorce has turned the institution of marriage in the Philippines into a pathetic joke and “annulment” into a retail legal business, would-be moral crusaders have shrinkwrapped “corruption” into a bogeyman that Pinoys burn at the stake in the ignoramous way that we usually do things. Instead of understanding and respecting the enemy we prefer to effigize it.
Let’s get rid of our fundamentalist good-vs-evil “morality” and regard corruption and other things pitched to us as “evil” by the Church in a way that modern minds do.
Let’s claw our way out of our culturally-induced ignorance and use a bit of thinking instead.
Back in the Middle Ages, people once thought that disease came in the form of evil spirits. It was only when we started to see the elegant beauty of the organisms behind these “evil spirits” did we truly conquer and tame them.

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Get into the habit of thinking laterally.
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People in Chicago have always been willing to sacrifice democratic idealism, so long as they felt the corrupt despot they were putting into office was one of their own. People in the Philippines, by contrast, never champion one of their own.
Erap. GMA. The rest of the points however, ring true, especially the ebola virus analogy.
A coherent, consistent, and predictable framework of corruption can work for business… wouldn’t just that be red tape?
Recently, I had to renew my driver’s license. Since I am working overseas, I have to haul ass and fly back to Manila and spend an entire day at the LTO, it was a pain in the ass. Back in 1998, I just had to pay someone to get it, heck I didn’t have a student license beforehand and got the non-professional straight ahead, and it was that easy.
I consider myself a good defensive driver, all my driving life, I never figured in a car mishap both here and abroad (knock on wood), but to this day, some of the traffic signs are totally alien to me.
My point is, and I do have one, is sometimes I think the reason why we generally suck at following traffic rules is because we have generations of morons like me who got a license without taking the driving test.
Corruption working for the betterment of society?
Listed companies and the mob are nothing but two sides of the same coin.
“Let’s claw our way out of our culturally-induced ignorance and use a bit of thinking instead”
You need scientists and other like minded educators to help us claw out of that.”
“Even in the business of corruption, Filipinos are third-rate.”
You may need economics and finance PhDs like GMA (who have the talent) to help us reach first rate competitive talent.
As i previous pointed out, the good thing about FV is that it faithfully represents a cross-section of Philippine Society. There is even a pro-Corruption constituency among the contributors as exemplified by Benign0. Kudos to Nick.
previous = previously
Talking about corruption and driving, to this date, I’ve only made “lagay” only ONCE to a “kotong” cop, and this was because I left my driver’s license back home and the cop caught me as I was going back to my house to get it (Murphy’s Law is a bitch).
So, on the occasions that I get caught doing an illegal u-turn in EDSA, or entering the forever changing one-way streets of Makati, I simply refuse to pay and tell the cop to issue a ticket. In my 10 years of driving, dalawang beses pa lang akong tinuluyan, but oftentimes I just get a slap on the wrist.
Corruption is born out of our incessant wanting to take shortcuts. Rather than “standardizing” said corruption practices, would it be better for us to simply take our leisurely time and try observing the law?
Taking the time and observing the law for a change… Going back to basics, perhaps? :-)
Corruption unpredictable? This means to me that corruption does not follow a dominant culture (technique) of undermining the law. This means to me that corruption in this country has shallow roots. this means to me that the corrupt do not respect one another. Trace the shallow root (I think it comes from the inheritors of the Spanish regime) and you may be able to take it out from our soil.
It’s called cost of doing business. Many investors would prefer to invest in a place where that cost does not exist.
the chinese are corrupt, why is it that everybody is going there?!
the writer is right.. the problem with the corruption here is that, with all the checks and balances being instituted, you end up paying to more and more people…
the right kind of corruption is the corruption which only needs for you to pay once..
So true, Benigno. You write like you’re Benigno, hehehe.
Agree on all points.