Some years back we discussed the subject of corruption with Mr Madhu, a retired headmaster of a prominent residential school. We discussed the concept of 'sadaqa', the giving of alms to the poor and needy. In Islamic societies, giving alms is encouraged, the hand that gives is better than the hand that receives. As such, we Malaysians would not think twice about giving alms to the poor, and to whoever asks for our help. But often, the fine line between sadaqa and corruption is difficult to distinguish.

Typically when we check in to a hotel, the porter would carry our luggage. When we arrive at our room, mindful that the porter is on a low wage and has done a good job for us, we would give him tips as sadaqa. Never mind that it was his job to carry our luggage to our room. We would feel sorry for the policeman who stands at intersection directing traffic in the heat of the day, never mind the exhaust fumes. If that same policeman issue you with a warning on your traffic infringement then said that he is hungry and has no money to feed his family, would you reach for your pocket?

Two years ago, while I was on my way to Kuala Lumpur in a Kancil, I was stopped by a policeman somewhere between Kuala Selangor and Batang Berjuntai. He asked me for my driver's licence, so I pulled out my New Zealand driver's licence and said that I don't have a Malaysian driver's licence, which he said that I should have.

Then he asked me for my IC, and when I pulled out my old IC, he pointed out that I should get my IC changed. I got the feeling that he wanted me to bribe him to let me on my way, but wouldn't dare to ask me directly. He enquired about average wages in NZ and complained that his policeman wages were low that he could hardly live.

Are policemen wages so low that they have to ask motorists for donations? I shudder to think what that policeman would have done if the motorist concerned was a villager without proper licence and road tax. He would probably ask outright for a bribe. That would have been highway robbery.

Years ago, when I was working at a supermarket, I used to make orders for stock to sell. Every year during Ramadan, my suppliers would send me hampers and envelope stuffed with money. I didn't ask for it. Does this constitute corruption? Of course, I would view those suppliers more favourably because they sent me goodies, even better if they bought me lunch at an expensive restaurant from time to time. In the beginning, I used to turn down those lunch invitations explaining that I would feel guilty later.

Then they explained to me that it's part of their entertainment account. Businesses give entertainment allowances to their salesmen and managers. Money for client lunches, dinners and karaoke sessions come from these accounts. These are for small accounts, 'peanuts' I was told.

For bigger accounts, those that involve millions of ringgit, businesses would try very hard to win their clients, sometimes arranging kickbacks to the purchasing manager in the client's company.

Part of the problem is when people can't differentiate between gifts (sadaqa) and kickbacks or bribes. Just ask yourself, 'Would you feel guilty?' I have no doubt some people would not feel guilty even if they commit murder.

Corruption becomes rampant in a country if the government's business dealings are not transparent, and if the difference between the rich and the poor is great. An example is when government purchases are put out to tender only to a select group like bumiputera contractors only. Some governments set up trade barriers and impose high taxes on imports to shelter local industries, but this only encourages corruption.

If the economy is government-led, (ie, government uses mainly fiscal policies to drive the economy) where large government projects are doled out, then corruption also becomes a problem.

What is the development budget for the 9MP? What do we get in return for printing that much money? What is the percentage that has been wasted on kickbacks and corrupt practices? We would never know, because we could never prove them. But we all would shoulder the burden, because these unproductive monies (bribe and kickbacks are not earned) would come back to circulate in the economy resulting in higher inflation.

My suggestion is to improve transparency (open up the government tendering system) and remove trade barriers. I would think that after eight plans of expansionary fiscal policies, we would have realised that the country has become more dependent of the government than ever, and we would have to change methods in using good macroeconomics management and monetary policies to achieve targets in income, employment and inflation.

The government should stick to its main job that is guarding the nation's natural resources, defence needs, ensuring fair play and providing the best in education. You be the judge if our current and past governments have done their job well.

These are only my opinions. The jury is still out whether fiscal policies, a combination of fiscal/monetary policies or monetary policies alone are the best way to achieve higher income and employment.