Cambodia's Future: Norway or Nigeria?

I am in Cambodia this week researching the expected offshore oil and gas boom. The big question is: Will one of Asia’s poorest and most corrupt countries use its newfound wealth to invest in infrastructure and education or will it simply shore up its corrupt practices? Will Cambodia become a Norway or a Nigeria?

Yesterday I met a foreign energy businessman with years of experience in Cambodia. His prognosis for Cambodia’s future was optimistic. He sees Cambodia as becoming a hub for a rapidly growing region, potentially taking advantage of its central location. In terms of governance, he has witnessed several years of improvement and sees things as only getting better.

China’s recent mining disaster is clearly on the minds of businesspeople here. Not only is China's mining sector the world's most dangerous, it is also extremely corrupt. The businessman said many people, including Cambodians, are reluctant to make deals with Chinese investors and partners. He listed several risks: opacity of contracts; hidden stipulations in contracts; lack of employment opportunities for local workers (Chinese use their own contractors); corrupt practices; and outdated equipment. Although Chinese technology will improve within a decade or so, he wasn’t so sure about the other practices.

Corruption is a rotten disease that many businesses are trying to fight. This businessman’s company is partnered with an American company, meaning it must follow the Foreign Corrupt Practices Act. He said it is a lot of work to comply with these rigorous standards, but he sees corrupt practices as antithetical to profitable business for several reasons: first, it is a waste of money that is thrown away without accountability; second, bribes seem to compound and send signals that a company is willing to play a dirty game; finally, good practices are central to ethical business and a calm soul. “I am able to sleep at night,” he said.

Due to his company’s large profile in Cambodia, an international NGO recently investigated how it was able to secure large contracts. After its investigation, the NGO concluded that his company was clean. He wasn’t worried. I only wished that clean companies like that were showcased for their exemplary behavior. If businesspeople knew they had a choice to act ethically, I bet cleaner practices would catch on.

Craig Newmark on Digital Social Responsiblity

Craigslist Founder Craig Newmark (his blog cnewmark is here) just finished speaking on "Digital Social Responsibility: Searching for Ethics on the Internet" this afternoon at the Japan Society in New York City. Dan Rosenblum and his team at the Japan Society put together this event as part of their corporate program's Tech Epoch series. New York Times correspondent Brad Stone was moderating. Policy Innovations got to listen to Newmark's insightful comments.

Newmark's main theme was that his business has worked on the basis of shared values, specifically trust, in the U.S. society. The biggest problem at craigslist? "Misinformation gangs" spreading lies about political candidates. The reason this problem is more serious than spamming, housing scams, etc. is because billions of dollars are at stake.

I paraphrase some more of Newmark's highlights here:

• Craigslist works based on trust and universal values in the U.S.--these are based on Judaism, Christianity, and Islam (Abrahamic religions). It works on the premise that most people treat people the way they would like to be treated. There are few bad guys but they are noisier than their numbers would suggest.
• The company's moral imperative is to work with the victims of scams and the police to catch the bad guys. But you have to balance this effort with the privacy rights of bad guys. Sometimes we have to operate on an internal moral compass or what "feels right."
• Jon Stewart and Stephen Colbert are pioneers in speaking truth to power, helping the health of our democracy. Another pioneer is blogger and writer Dan Gillmore. While craigslist is for the now, wikipedia is for the ages--it allows history to be written by all people, not just the victors of history.
• The Internet started with Johannes Gutenberg and the "blogger" Martin Luther came up with the first killer app. known as the Reformation.
• While Tim O'Reilly advocates an ethical code of conduct for bloggers, Craig agrees that bloggers should at least disclose their affiliations. (Devin says: I agree with the code that anonymous postings should be avoided. As O'Reilly puts it, "When people are anonymous, they will often let themselves say or do things that they would never do when they are identified.")
• The Web can help remind us where society is supposed to be going and it can help to expose crimes like corruption. (The Internet can help create a more ethical society.)
• Not sure what web 3.0 means but it has something to do with collaborative filtering and trustworthiness metrics. Finally, he joked despite its emergence, Craig is disappointed we still don't fly around with jet packs.

CSR on the (Elite) Mind in East Asia

I am in the Singapore airport bound for Shanghai, reflecting on my visits to Manila, Jakarta, and Singapore. Three policemen armed with automatic weapons just walked by the free Internet stall to take the escalator downstairs.

I don't want to get carried away, but I am happy to say that issues such as the environment, human rights, and good governance are not confined to conversations in California, Washington DC, New York, Europe, and Japan. Every day, the local newspapers ran at least one article about the environment, climate change, and their popularization in ASEAN.

I read about an eco beauty pageant in Manila and about how Bangkok shut off its lights a couple of days ago to promote eco awareness. On the TV, I saw an ad in Manila (sponsored by the UNDP) against corruption and a music video in Jakarta promoting energy efficient light bulbs. In the cab ride the the airport this morning, the driver spoke about the environmental problems in Southeast Asia broadly, and said that he has never seen such bizarre weather in Singapore. Every businessman, scholar, and government official we interviewed acknowledged the importance of eco and human rights leadership in the world economy.

Now, I don't want to overstate the case. Clearly, the biggest problems facing many countries in ASEAN are poverty and political stability. I understand that I was reading newspapers in English, the TV was in English, our interviewees were elite, and the taxi driver was in fact from a highly educated family. But we should not forget how human rights abuses and environmental degradation can conflate with terrorism, corruption, and instability. The perfect storm could go something like this:

Imagine an area saturated with corruption (which is seen by investors as the number one problem in the Philippines). Officials take bribes from criminals, and gangs are allowed to arm undisturbed by law enforcement. They are able to prosper by engaging in illegal activities such as piracy or smuggling. Lack of equity creates resentment toward more successful groups in the society. An environmental disaster, such as a flood, destroys homes and makes people more receptive or vulnerable to a strongman. Gangs seize the opportunity to overthrow the local government. Martial law is declared, rights are curtailed, foreign direct investment flees, and a downward spiral of poverty and violence ensues.

It isn't that far fetched. All these issues are related.