It’s Quite Possible to Contain Corruption | M Ziauddin

Market economy in its crassest form and democracy in its formative stages is a deadly combination. Among other side-effects, this combination begets massive corruption. In fact corruption takes over the system of governance itself and perpetuates it. And countries like Pakistan entrapped in such callously corrupt conditions find it almost impossible to control the menace using the normal instruments of governance.

In developed democracies until about the turn of the century corruption used to be kept from getting out of control by a combination of social controls like a genuinely independent judiciary, a media functioning under ‘no fear or favour mode’ and a parliament strong enough to ward off interference from any non-civilian force.

However, by the middle of the first decade of the new millennium an unfettered market seemed to have taken over the developed democracies as well. In fact big business had started making decisions for the political parties in these societies. And as Thomas Picketty had concluded in his magnum opus Capital in the 21st Century the single minded pursuit of growth over centuries had made rich richer and the poor poorer.

In fact the collapse of the world economy by 2007 had affected the poor very seriously while those who created money out of nothing (a highly corrupt practice), the banks and investment funds were rehabilitated with taxpayers’ money to continue their loot.

Meanwhile, paradoxically enough some middle income countries had gotten out of their poverty trap by giving free rein to corruption. According to a World Bank report, the following countries ranked at the top on corruption index but at the same time displayed a remarkable capacity to bring their poor out of the cold:

India India’s corruption ranking appears to be largely insensitive to political shifts. The Indian National Congress was hit by a slew of major corruption scandals involving the coal sector, telecom, railways, aerospace and defense, and construction. India’s Control of Corruption rating declined steadily during that time. When it was in the opposition, the Bharatiya Janata Party used these scandals to smear the Congress party, but now the Bharatiya Janata Party is caught up in “Lalitgate” – a scandal involving India’s professional cricket association – and the Vyapam scandal, which exposed payoffs to place students in the best schools and government jobs. The fledgling anti-corruption Aam Aadmi Party, which unseated the Bharatiya Janata Party in state elections in Delhi, is already faltering in popularity. Perhaps India’s politics are too deeply mired in corruption to build a credible anti-corruption platform at this stage of development.

Brazil In boom times, when credit is abundant and foreign direct investment is shooting up in developing countries, corruption on the grandest scale becomes possible. After all, when a government is the chief party awarding major infrastructure projects with multimillion- and sometimes multibillion-dollar price tags attached, there is ample opportunity to pad the budget with political favours. Each step – from the environmental and technical feasibility studies to ongoing maintenance – is an opportunity for government bureaucrats and businessmen to cut ribbons in public and make furtive financial deals in private to move the process along.

Mexico When economic times are good and there is more money to go around, there is little variance in the Control of Corruption variable. However, when global economic conditions began stagnating following the 2008-2009 financial crisis and growth flattened out in 2011-2012, Mexico showed a noticeable decline in Control of Corruption as major scandals were exposed and the perception of high-level corruption rose. Under more stressful economic conditions, political competition will naturally escalate, and civil society will be hyperaware of abuses of political power.

Turkey When Erdogan came to power in 2003, many Turks – both secular and conservative – saw him as the fresh face that would clean up Turkey, root out the Mafioso networks and make the economy work again. For a while, that perception held, and Turkey’s corruption ranking steadily rose. Meanwhile, Erdogan used Turkey’s growth spurt to rapidly build out his patronage network and hand out contracts to political loyalists while sidelining his political adversaries. Once news started trickling out on the scale of corruption that had emerged during his tenure, Erdogan did not bother trying to redeem himself with a fresh anti-corruption drive. Instead, he dug his heels in further, promising more privileges to those who remained loyal to him.

Indonesia The Suharto New Order dictatorship came to an end in 1998, and new efforts were made to undo his tightly knit and centralized patronage network extending from the armed forces to a sizable class of capitalist cronies. Indonesia has hit several major bumps along the way as successive governments have attempted to adopt anti-corruption platforms, only to see more entrenched interest groups derail these efforts from within. In fact, as post-Suharto Indonesia has become more politically decentralized, corruption has simply taken on a new form as additional layers of regulation at the local level create more space for bribery.

China China’s current leaders seemed aware early on that the country’s rapid growth could endanger the Party’s credibility and viability should corruption go unchecked. Xi is well aware of his country’s long history of dynastic cycles, beginning with centralized power and consolidation, the erosion of the imperial court by bureaucratic corruption, the gradual empowerment of local landlords at the expense of the centre, a call too late to reform and inevitable dynastic decline. The spike in China’s Control of Corruption ranking seems to correspond closely with the launch of Xi’s anti-corruption drive. Xi’s anti-corruption drive is earnest.

In view of the above, Pakistan needs to take a new look at the way we are managing our economy and practicing democracy. In fact, continued faith in unregulated market economy, is more likely to throw up more corruption threatening the very foundations of the state. An alternate model called the Economy of Tomorrow (EoT) is being discussed at various forums worldwide. The new model is being promoted as a gateway to what is called the Good Society. Dynamic growth in the EoT model is driven by inclusiveness. All citizens must have access to education, health care and credit and must be able to start an enterprise.


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