It is entirely fitting, as the International Monetary Fund recently did, to focus on the canker at the heart of many nations which undermines macro- economic stability: corruption. As the IMF paper notes, public corruption, defined as an abuse of public office for private gain, afflicts economies at all stages of development and is estimated to cost as much as 2 per cent of global GDP, or between US$1.5 trillion and US$2 trillion (S$2.7 trillion) a year. This impedes the conduct of budgetary and monetary policy and weakens financial oversight, ultimately hurting growth. The indirect costs are also substantial, leading to a widening class divide.
In Transparency International's Corruption Perceptions Index for 2015, not one of the 168 countries surveyed got a perfect score and two-thirds scored below 50, on a scale from 0 (highly corrupt) to 100 (very clean). All Asia must pay heed because its scores are low - only Singapore, Hong Kong and Japan were in the top 20 ranking. Fortunately, in two of the biggest nations notorious for corruption - China and India - some action to tackle the problem has begun. In China, President Xi Jinping has set himself the task of cleansing the party and government as a priority. In India, Prime Minister Narendra Modi's first two years have been notable for the remarkable absence of financial scandal at the federal level.
While public corruption exists in almost all societies, it seems particularly noxious in democratic ones, which suggests that electoral politics often is a breeding factor. In the region, the murky influence of money in elections has surfaced repeatedly over the years. Another area of public life where graft is prevalent is in the award of government contracts. About 60 per cent of bribes globally can be traced to public contracts, according to a transparency expert with the foundation Omidyar Network. At an international anti-corruption summit last week hosted by British Prime Minister David Cameron, participants sensibly chose to make such contracting open by default.
Unfortunately, there is still insufficient support for public registers of beneficial owners of companies - to deny cover to those using shell companies abroad to hide the ill-gotten proceeds of corruption. Obtaining information to throw light on shady deals involving powerful figures, getting cooperation to recover assets, and sharing intelligence are all still a hard slog. But nations must persevere and work together. Some societies once considered corrupt, including former colonial settlements, have shown they can turn the corner. Indeed, it may even be politically popular: witness how Mr Xi's image soared in China after he began cracking down three years ago, and how anti-corruption campaigners elsewhere have done well at polls. People are even taking to the streets to protest against corruption, noted Transparency International. Their message is clear: Enough is enough.