china deepens culture of corruption OPINION-EDITORIAL from avarua, rarotonga, cook islands Europeans here and around the world are about to experience what Polynesians discovered for themselves close to 200 years ago. What it’s like to be dominated by a foreign culture. Two centuries ago, it was Europe doing the dominating. White explorers, traders and settlers crushed centuries of Polynesian culture, religion and power within a decade or two of contact between the two societies. This time, it is China that will dominate. “In 2005, China used 26 percent of the world’s crude steel, 32 percent of the rice, 37 percent of the cotton, and 47 percent of the cement,” states Worldwatch Institute, a US-based environmental commentator. China’s explosive growth already causes alarm on shrinking oil markets, forcing higher petrol prices everywhere. Including here. As a nation, we know almost nothing about this emerging economic superpower. Or its equally large and rapidly expanding neighbour, India. Our politicians seem to have no concerns, welcoming one of them, China, with open arms. OPEN HANDS And open hands. Earlier this month, government announced plans for $4 million in China aid funding for new police headquarters. This is barely a year after the same amount was funded for a new court house. Less than a fortnight after publicly releasing the plans for the new police HQ, government secretly let in the first of dozens of Chinese workers to build it. No consultation has taken place. No one has been asked whether they want their police station built by the Chinese. Or what style they want it in. Or to what quality. Instead government appears to have approved plans for a Chinese style ‘cop shop’ and allowed workers to be sneaked into the country. It is avoiding questions from the daily newspaper. One official made sarcastic comments about critics “scared of their own shadows.” He may be right. RUST AND STINK However, without any response from government to questions it is perfectly reasonable for the media to raise the alarm bells. This is particularly so considering growing concerns about the quality of work in the last China project. Metal fittings are already rusting, marble slabs have cracked, the toilets are said to stink and may not even meet minimum building standards. Electrical services are said to have failed from the start requiring expensive repairs by local contractors. Official Chinese contractors approved by the Beijing government badly underestimated what was needed to finish the project and had to source local supplies. Workers were paid so little that they could not always afford to buy food for themselves. They were frequently seen out on the reef, collecting already scarce seafood. Some locals felt sorry for them and gave them fish or sold it cheap. China’s inability to ensure proper standards on one of its own aid projects raises serious questions about whether either country is getting full value for its money. WHERE WAS IT SPENT? Was the full $4 million spent on the court house? Or did some of the money end up going elsewhere? Could our justice system even be the scene of a crime? Government’s track record of managing state assets does not inspire confidence, either in preventing mismanagement or investigating corruption. Over the years, we have seen simple conflict-of-interest on a massive scale as with the Rarotongan Resort or outright fraud like the even bigger Italian hotel project. All these concerns are crumbs as to the real issues at stake here. Across the Pacific, there are complaints as feel-good projects like the courthouse open the door to ruthless competition. Not so much to inscrutable business mandarins as unscrupulous corporate thugs, including organised criminals. In Tonga, local retailers have been wiped out by Asian importers let in by a corrupt King. Similarly, downtown Suva is looking like a wannabe Chinatown, former aid workers later being caught up in a huge drugs bust. CORRUPTION In its 23rd annual State of the World report, for 2006, Worldwatch notes that India ranks 35th on a scale of 50 countries ranked by AccountAbility in its National Corporate Responsibility Index. China ranks 45th on the NCR index. “Both countries, like most other developing countries, are laggards in corporate responsibility,” reports Worldwatch. “Few domestic corporations in India and China are voluntarily increasing responsibility: in 2004, only 5 Indian and 11 Chinese companies filed reports that disclose aspects of their environmental and social performance, which is often a first step in increasing responsibility.” As any auditor knows, a lack of accountability can breed dishonesty. By failing to properly consult, China may be doing nothing but deepening a culture of corruption within both our political classes. Just like the Europeans before them. HISTORY As the latest edition of the Economist notes, China’s return to world dominance will be a return to a historic norm. India and China have, for millennia, been the base of economic activity. Global leadership by European powers is a relatively recent affair, boosted by the historically short-term benefits of the industrial and now technological revolutions. Worldwatch reports that so-called third world Asian countries are now using the same technologies, especially wireless communications, to “leapfrog” first world European nations. What took two centuries to achieve in Europe is being done in China in less than two decades. This should not be surprising for those who remember that China is the world’s oldest surviving civilisation. They’ve been challenged before. SURVIVAL Academics have been telling us for decades now that our future lies in Asia. Not because we might like to but, as Worldwatch figures make clear, because we have no other choice. As the Cook Islands get to grips with China, it will also pay us to remember that India lags not far behind. Despite our relatively well-educated population, there is little hope that we can match Asian efforts in high technology. Remoteness from large markets ensures that. Possible answers lie in the now stagnating offshore finance industry. Using the Asian example, communication technologies may also allow us to ‘leapfrog’ over first-world countries. Not in morally bankrupt ventures like tax-evasion, or even only slightly less suspect areas like “asset protection.” Emerging opportunities in environmentally-friendly, ethically evolved sustainable development markets offer the best hope. Not selling off our sovereignty for a few blankets and axes.