Sometimes lucky with some labels

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EI SUN OH

I STARTED a discussion on names or reputations or even just labels attached to a place, a country or perhaps even a region, and lamented on some of the negative connotations in them which could bring real harm or disadvantages in economic or social terms.

It would be most unfortunate for a place to acquire a rather negative name or label, although at a certain socioeconomic stage it has really little choice but to make do with the label stuck on it, and perhaps at least make some good money out of it, for this has always been a cold, harsh world, with nothing more pragmatically valuable than cold, hard cash.

Such was the case, for example, with the Wanchai district of Hong Kong Island, which for a few decades after World War II was famous as a red-light district, with visiting sailors from around the world frequenting the many colorful pubs (and more) there, obtaining “entertainment” in all its different hues. The by-now classic American movie The World of Suzie Wong captured the Wanchai milieu in the 1950s well, depicting the love story of an American visitor and a girl “working” in Wanchai.

Wanchai reached its “fleshy” heights in the 1960s and 1970s during the Vietnam War, when Hong Kong was a frequent and popular rest and recuperation destination for American servicemen. Facing an uncertain fate in Vietnam due to the high casualty rate, many GIs let go of themselves in obtaining the “services” of the Wanchai girls. For moralists, Wanchai was of course an eyesore, but its shady reputation did provide a lot of economic benefit to the residents then.


But starting in the 1980s, due primarily to its enviable location in the vicinity of Hong Kong’s all-important Central financial district, Wanchai has slowly transformed into a very upscale and trendy but much less “fleshy” entertainment, commercial and even residential district.

Today, a typical expatriate in Hong Kong will definitely not be looked down as being “dirty” if he tells friends of his intention to go down to Wanchai after work for drink. The gentrification of Wanchai of course brings with it skyrocketing housing and office prices, which further drives away the shadier establishments. But such is the price a place must pay to clean up its name and move up the socioeconomic scale in a more socially approved manner.

A similar thing can perhaps be said about the annual Corruption Perception Index compiled by the assiduous global non-governmental organization Transparency International, which ranks most countries in the world from best to worst in terms of people’s (including businessmen’s) perception of the degree of corruption in those countries. As to be expected, many developing countries fall into the middle to lower ranks in the index.

I would grant that those typically least developed countries which due to abject poverty (although some may argue that this is actually caused by corruption and not the other way around), relentless civil wars or other awful disasters are unfortunately occupying the lowest ranks in the corruption perception index, would understandably have a really hard time attracting meaningful investment into their country for any sort of development.

But for those developing countries which are in the middle ranks of the index, I would argue that this sort of “quite but not quite corrupt” reputation or label may turn out to be not such a bad thing for them! We must own up to the fact that the worldwide business field is not an arena for saintly contests where the most ethical businesses would win.

Instead, in this increasingly competitive and dog-eat-dog world with increasingly scarce resources, businesses by nature have to be ruthless and predatory to even just survive, not to mention prosper. In developed countries which usually rank high in the corruption perception index, business regulations are typically tight and comprehensive, thus, at least from the businesses’ perspective, hindering their full growth potential. Almost everything would have to be done properly in strict accordance with well-established rules and regulations, and while typical swashbuckling businessmen would like to avail themselves of the advantage of such attendant business protection, they would no doubt not like to see their competitor enjoying the same level of protection.

On the other hand, in developing countries straddling the middle ranks in the corruption perception index, regulatory matters essential to a business’ development can still be “resolved”, and even expeditiously so if the right “incentive” (read bribe) is provided to the officials in charge; and they can even be done according to the particular business’ liking, if again an even larger “incentive” is provided. Collusion between officials and businessmen is the rule of the day. The tender process is but a ceremony with predestined, “well-oiled” results. Lucrative monopolies can be granted without much scrutiny to individual businesses provided a “profit sharing” scheme is worked out between the businesses and the officials in charge. This is actually an unscrupulous but adventurous businessman’s heaven. The elevated costs would of course have to be borne by the hapless taxpayers and other incidental victims of the developing country concerned. But then again, who cares really?

I may be slightly sarcastic in my description above of the “attractiveness” of these “somewhat corrupt” countries as business investment destinations. But come to think of it, are they really not so, especially when you read glowing recommendation of such so-called emerging markets—emerging definitely not from a cleansing shower of integrity.

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