Public-private partnerships can breed "rottenness and corruption" due to vested interests, warned vetaran social activist Anwar Fazal.

Speaking at a forum in Penang today, Anwar said corruption took root in governments which practiced a strong "gift culture", citing Japan and South Korea in the 1980s as examples.

Anwar then related a story of a civil servant in a ministry in Kuala Lumpur who was left with a bag containing money at his office by a group of South Koreans who were involved in the construction of the Penang bridge.

The civil servant told Anwar that he had returned the bag and the money.

"He thought the bag was a gift but inside was RM40,000. In the 1980s, that amount of money could buy you a bungalow in Jesselton.

"When there is a gift culture, a private arrangement marries and goes into bed with governments, we have new problems." he said.