Wednesday, March 19, 2014

The Rise Of Cronyism

When TIME (Mar 17, 2014) highlighted Ho Ching is 26th of the 50 Most Powerful Women In Business (according to Fortune magazine's ranking), they took pains to mention that "hers is not a political appointment". Singtel's Chua Sock Koong, 56, is ranked 22nd, is also not a political appointment. But no need to say that.

Everybody's nervous about the new "c" word, with corruption fast becoming blasé thanks to it being over used in the past couple of years. The Economist’s latest cover story warning readers of “The New Age of Crony Capitalism” has been commended for shining a journalistic light on cronyism’s rise and the corrosive effects of rent-seeking behavior - grabbing a bigger slice of the pie rather than making the pie bigger.

At the U.S. Government Accountability Institute, “cronyism” or “crony capitalism”  is as defined those instances when government gives certain companies favorable rules or taxpayer monies others don’t enjoy. Those not in favour of the cash going to Olam International (Olam) will have a field day, given the darts thrown at Singapore Exchange (SGX) for being less involved in the Temasek Holdings initiative. SGX's hastily prepared statement regarding Olam served only to muddy the waters further.

Critics are arguing that The Economist’s index is not constructed to capture the critical moves cronies make. Indeed, a more complete cronyism index would include metrics such as the number of government-backed loans a company or individual has received, subsidies or set-asides, and the number of concessions scored by so-called “offensive” lobbying efforts. The Economist’s crony-capitalism index also isolates business sectors like casinos, oil and gas, and real estate as crony sectors while ignoring things like high-tech, healthcare, and entertainment.

Thus, the magazine concludes that the United States ranks number 17 and China fares even better with an index score of 19. And oh, Singapore is ranked 5th place in that index. Yes, Singapore did score 23 points for institutional strength but The Economist said that indicator is no guarantee that cronyism here can be kept in check.


16 comments:

  1. Institutional strength is very scary. It means cronies are well institutionalized lah.

    ReplyDelete
    Replies
    1. So does Singapore Inc
      - managed by PAP affiliated management
      - is this institutionalized crony capitalism?

      Delete
    2. Living in lah lah land lah.

      Delete
  2. Indeed, it is commonly practise around the World.
    Can Singapore be an exception?

    ReplyDelete
    Replies
    1. 10 billion flies eat shit around the world.
      Can Singaporeans be an exception?

      Delete
    2. @ anon 11.08am,
      Singapore has all along surpassed cronyism with nepotism.

      I cannot think of another country that has a father, son and daughter-in-law running state funds and guess what ?... they pretend to be answerable to a so called 35% elected president who incidently is part of the famiLee by marriage.
      What form of cronyism on this planet can top this?
      LOL

      Delete
  3. Is that a reason why that handbag salesgirl running a mass transport company got off without a scratch after scr**ing up operations so badly.

    ReplyDelete
  4. If any CEO made hundreds of millions of dollars losses for any company, do you think any Board of Directors would be so kind as not to fire her especially if she is not a political appointment ? It doesn't matter whether she is making millions subsequently because any meritocratic CEO is not supposed to lose any million, let alone hundreds of them.

    Like how one million dollar idiot once asked, what do you think ?

    ReplyDelete
    Replies
    1. If the Board of Directors are all politically appointed ie. somehow approved by some Minister, does it not follow that the CEO is also politically appointed ? What say you ?

      Delete
  5. Is that not how the trick is supposed to work ? Let the Board answer for it while the Minister act blur & keep quiet ?

    ReplyDelete
    Replies
    1. Blur as in opaque, not transparent? Careful now.

      Delete
  6. Government’s approach is not cronyism for cronyism’s sake, but cronyism that leads to good governance. No cronyism may not necessarily lead to better outcomes. Some countries have gone somewhat overboard with elimination of cronyism, leading instead to the broken family and avoidance of friendship. Trust us, cronyism, like 'opaqueness", is good governance.

    ReplyDelete
    Replies
    1. As a citizen, I'll decide what's good for me.
      No need a PAPig to decide what's good for me.
      Keep it transparent.
      Or I vote Opposition.

      Delete
  7. If Transparency International has added the index "Legalised Corruption", no doubt Singapore ranks first miles ahead of its next competitor. Just look at the enormous billions of loss of public money over the years with totally zero accountability and responsibility without absolutely zero investigation. Oh , and they said it is due to "meritocracy" , and bullshit statement like

    ""People do want to know, there is curiosity, it is a matter of public interest. That is not sufficient reason to disclose information. It is not sufficient that there be curiosity and interest that you want to disclose information".

    oh yes, transparency, accountability, integrity , honesty and credibility only apply to opposition parties not to PAP. PAP very special one and thick-skin one, can accuse others when they themselves are foremost guilty of it.

    ReplyDelete
  8. In living, it is only natural to care and help those related and close. Legalized corruption sounds so much better than cronyism though the Latter is not illegal.

    patriot

    ReplyDelete
    Replies
    1. Leegalized corruption.
      I like the new term.

      Delete