Asia has been hit recently by three irregularities involving an
upstart IT entrepreneur, a renowned scientist and a national
charity in its three most developed economies: Japan, the Republic
of Korea (ROK) and Singapore.
All three examples point to the need for these nations to
examine key issues of their governance.
In Japan, the Livedoor scandal broke out amidst a spectacular
fraud. The now-disgraced IT entrepreneur, Takafumi Horie was
accused by his former chief financial officer of cooking the books,
so as to buy a local baseball team and propel himself into
celebrity status.
This scandal even struck political chords, as Japanese Prime
Minister Junichiro Koizumi had to answer to Parliament on how and
why he and the ruling LDP had even been taken in to sponsor Horie
as a LDP candidate during the last September's legislative
elections.
But more importantly, a lively debate erupted in Japan over the
increasing gap between the rich and the poor, and the urgent
necessity to close or narrow this gap, for social stability and
ethical reasons.
At 33, Horie had become a national hero of sorts and a symbol of
both Japan's re-emergence as an economic power. He was also an
example of the new rising class of techno-entrepreneurs, who also
symbolize Koizumi's new Japan.
This Livedoor scandal affected Japanese stocks and the Tokyo
Stock Exchange, which took a spectacular plunge the day after it
unfolded.
It could also cause further ripples at a time when Japanese
society seems to be in increasing angst over a host of social and
political issues, ranging from constitutional reforms, royal
succession and its future role in engaging the world in tax cuts,
domestic reforms and its crucial relations with China and the
Koreas.
In the ROK, a recent scandal broke out around controversial
scientist Hwang Woo Suk, over the admittance that his
ground-breaking stem cell research was indeed fraud.
Following his apology for a moot 2004 claim of deriving the
world's first stem cell from a cloned human embryo, as well as a
subsequent 2005 paper saying he could speed up the stem cell
deriving process, Hwang came out publicly to blame his researchers,
who he alleged had misled him.
This fall from grace of a national hero in a country known for
its excellence and meritocracy was stunning. Some observers
surmised that this national disgrace had emanated from Seoul's
traditional meritocratic pressure thanks to its no-time-to-lose
drive for success, amidst rising pride.
Korean society may be changing too fast, exemplified by the
Hwang scandal, as the ROK's soul search amidst globalization and a
fast-developing economy.
Near the end of last year, Singapore was also hit by a scandal
in one of its most prominent national charities.
The National Kidney Foundation (NKF) saga involved its former
CEO, TT Durai, when he took a journalist from the nation's top
English paper, the Straits Times, to court after it alleged Durai's
extravagant lifestyle at the national charity.
Durai, a man respected for his fund-raising prowess and
entrepreneurship ended up paying the political price when he only
lost the case and later got investigated by the Corrupt Practices
Investigation Bureau (or CPIB).
The whole NKF Board was forced to resign, as investigations were
launched, but the Health Minister was firm and fast in tackling
potential political fall-outs from such a scandal.
The government is determined to rebuild confidence in national
charities amongst Singaporeans, but more importantly, as part of a
social transition gripping the Republic, the Durai/NKF saga could
also result in a serious rethink of Singapore's drive for
entrepreneurship.
Durai clearly embodied a very successful and effective
fund-raiser, but perhaps with questionable moral ethics, which have
yet to be fully proven by the CPIB and law courts. Future
entrepreneurs would surely be assessed not only by meritocratic and
entrepreneurial success alone, but also by ethical and moral
yardsticks as well.
But in reality, has the meritocratic pressure been too high in
Singapore, just like in the ROK and Japan to produce such an
unfortunate scandal?
From these three scandals that shook up Asia's three most
developed countries, there can be many concerns and questions to
draw, which Asian societies should seriously ponder, as their
economies develop frantically.
?
These three developed economies may be leading Asia in developing a
real sense of professionalism in public and corporate governance,
which is the true positive aspect here. This tendency appears to be
gaining ground regionally, as the general public now places greater
emphasis on public and corporate governance, amidst the rise of
people's and small shareholders' power in Asia.
Also, there is now a fundamental question posed on whether Asian
societies have truly come to terms with the increasing meritocratic
pressure that is mounting, amidst a more competitive society,
whereas its social mores and cohesiveness still smack of Asian
conservatism and hierarchization. This is indeed a challenging
phenomenon for transitional societies in Asia.
There is also a need to address the issue of ethics in Asian
societies, as too much emphasis may have been placed on success and
meritocracy at all costs, without investing much into the moral
side of society, a part from the strict enforcement of laws, as in
Singapore. Perhaps, a religious safeguard and ethics should
usefully complement the rule of law in Asian societies.
Lastly, Asian societies in transition must address the
fundamental issue of the kind of society they really want, either
the liberal, competitive American model or a more social and
cohesive Asian society. Or could there be a healthy balance of
both, to achieve a sort of enlightened Asian society?
These three irregularities would certainly be a sound occasion
for China to revisit fundamental issues of meritocracy,
competition, moral ethics and governance too, just as the State
Council champions good corporate and public governance.
The author is a business consultant and strategist and
Council Member of the Singapore Institute for International
Affairs.
(China Daily March 18, 2006)
