Corruption trap: The need for proper vigilance

By Sankar Sen

NEW DELHI: The World Bank has defined corruption as the use of "public office for private profit". Corrupt acts include bribery, extortion, embezzlement, use of speed money etc. Generally, in our country the focus remains on the demand side of corruption and not so much on the supply side. We talk of corruption by the public servants and political leaders, forgetting the role of corrupt businessmen.

The corruption level in India has increased substantially. The Berlin-based non-government organization Transparency International (TI) has come up with the corruption perception index. It ranks countries according to the level of corruption as assessed by those who do business with the country.

Last year out of 85 countries listed by TI, India's rank was 66. This year TI has ranked 99 countries and our rank is 73. Thus, 19 countries were perceived to be more corrupt than India in the last year and this year, 27 countries are considered to be more corrupt.

However, this marginal improvement in the position should provide no satisfaction. TI has also listed countries in terms of Bribe-payers Perception Index (BPI). The BPI undertaken by Gallup International for Transparency International in 14 leading market economies shows that companies from many leading exporting countries regularly resort to bribes for expansion of their business.

The BPI reveals that in a scale 0-10 where 10 reads as corruption-free exporting country, the best score among exporting countries was 8.3 while the worst was 3.1. China was seen as having the greatest willingness to pay bribes abroad followed by South Korea, Taiwan, Italy and Malaysia. Sweden, Australia, Canada achieved the most favorable results.

For a developing country like India, corruption is a scourge. It is anti-national. It seriously retards a country's economic development. The UNDP report on Human Development in South Asia 1999, The Crisis of Governance, says that if corruption levels in India were reduced to those of the Scandinavian countries, investments in the country could increase annually by 10 percent and gross domestic product growth by almost 1.5 percent each year.

One recent study shows that investing in a relatively corrupt country compared to a relatively honest one is equivalent to additional 15 percent profit tax on investment.

In India, according to the current corruption levels, the implicit corruption tax on investment is almost 20 percent. Corruption thus diminishes the country's capacity for investment by reducing the resources of the government. The high potential for capital flight of illegal earnings makes corruption associated with a very negative impact on the balance of payments.

In India as well as many South Asian countries, corruption can be divided into petty corruption, middling corruption, and grand corruption. There is a growing perception that corruption has moved upwards from petty corruption in the 1950s to grand larceny at the highest levels of the state in the 1980s and 1990s.

In India and its neighbors in South Asia, corruption has certain characteristic features that make it far more sinister and damaging than corruption in other parts of the world.

These features have been highlighted in the UNDP report. First, corruption in India occurs upstream and not downstream. Corruption at the top distorts fundamental decisions about policies, projects and development.

In industrialized countries of the West, core decisions are taken through transparent competition and on merit even though petty corruption may occur downstream.

Second, corruption in India has wings and not wheels. Most of the corrupt gains made in the region are immediately smuggled out to safe havens abroad and not ploughed back to domestic production and investments.

Third, corruption in India and other Asian countries often leads to promotion and not prison.

The big fish are rarely caught. In advanced industrialized countries there is a process of accountability. Even top leaders are not spared. The frustrating aspect of the situation in India is that corrupt persons are too powerful and beyond accountability.

Fourth, corruption in countries like India, where the majority of the people live in abject poverty, can have a very unsettling impact. Combating corruption is thus not punishing some dishonest politicians but also saving human lives.

Fifth, corruption increases injustice. Basic human rights and freedom are threatened when criminal justice administration is perverted because of misuse of money power.

In Bangladesh in a survey by Transparency International, 90 percent of the respondents pointed out that the police and judiciary were the most two corrupt institutions.

With entrenched corruption the basic trust between citizens and the state disappears. According to a 1998 survey, 63 percent of the respondents reported that they had to pay bribe to the court officials in order to get a verdict in their favor.

Again, there are laws and rules in existence, which perpetuate corruption and give opportunities for corrupt practices among government officials. For instance, it requires 47 different approvals to construct a building in Mumbai and a small-scale entrepreneur has to handle 32 different inspectors and 46 different documents.

Malpractices remain unchecked because most of the government departments lack effective in-house vigilance machinery. Many of the government agencies have also developed institutional mechanisms that perpetuate rather than eliminate corruption. Upright officers who refuse to be corrupted are frequently transferred to unimportant jobs so that the corruption chain is not disrupted.

The Santanam Committee on Prevention of Corruption recommended to the government that since corruption was closely related to administrative procedures and abuse of discretion, the Central Vigilance Commission should deal not merely with cases of corruption but also hear complaints against wrong, dilatory or unfair administrative exercises and procedures.

However, the government was not in favor of empowering the CVC with the job of looking into the grievances of the citizens against unfair administrative practices and procedures.

So it ordained that the CVC should only look into the matters relating to corruption. It promised that the department of administrative reforms would work out the details of such a machinery. This promise remained unfulfilled.

Thus, the CVC could not play the role of the Ombudsman, an institution that exists in the UK and other Western countries.

The writer is a former Director, National Police Academy.

-- The Statesman/Asia News Network