Corruption: Socio-Economic Perspective (Daily Times) May 14-15, 2012

By Babar Ayaz

Many years back I saw a movie in which the lead role was played by Peter Sellers, I don’t remember its name but it was not one of the Pink Panther series. The movie was about how the hospitals and doctors fleece the patient in America. It had a unique indemnifying statement instead of saying that all characters are fictitious, it said all characters are real if anybody has any resemblance please stand up.

 There was a time not many years ago when Pakistan used to compete with Nigeria for the most corrupt country of the world. At that point we were at the bottom of the Transparency International pit. Now the 2010 report places Pakistan at the134th rung out of 182 countries. Should we rejoice that from being the most corrupt country we are today 48th from the bottom? Are we any better than what we were a few years back or 42 countries have slipped down to being worse than us? Perhaps the latter is true.

 Just for information sake let me first list the10 least corrupt countries in order of their ranking: New Zealand, Denmark, Finland, Sweden, Singapore, Norway, Netherlands, Australia, Switzerland and Canada.

And the 10 most corrupt countries from the bottom were: Somalia, North Korea, Myanmar, Afghanistan, Uzbekistan, Turkmenistan, Sudan, Iraq, Haiti and Venezuela.

 Now according to The Economist there is an interesting correlation between the levels of corruption with the status of Human Development Index. The least corrupt have the best HDI and the most corrupt the worst. Even a cursory look at the least and most corrupt countries shows that there is also a co-relation between corruption and the level of poverty, absence of democracy and internal instability.

 In democratic dispensation there are better checks and balances in the form of free media and independent courts. In our case we find these institutions are playing their watch-dog role but at times they are rather over-zealous and are presenting it as the one and only important challenge to the Pakistani society. That’s where the balance is lost but as this is the popular theme, everybody wants to ride it in the race of breaking news and headlines, judiciary included.

 We have seen that in times of military dictatorship, curbs on media and compliant judiciary does not play up corruption cases, as they do when there is democracy in the country. No doubt media has to continue exposing corruption, but without perspective and responsibility disproportionate coverage creates the perception that democracy breeds corruption and the elected representatives are the most corrupt people in comparison to those who ruled us under military dictators. It also gives an impression as if corruption is something new and unique in Pakistani society.

 Here I am reminded of a short impressionistic piece from my late father Shahzada Ayaz’s book ‘Chota mun bari baat’ published in 1952. After lamenting on how corruption was rampant, he concluded “Mujeh dar hey khahin merey qaum ka kirdar looteroun ka na bun jayae.”

 Now let’s see why corruption is part of our society. The dominant culture and value system of Pakistan when it was established was feudal and tribal. The basis of economy was agrarian. And don’t forget that the Mughal and British Raj allotted land and power on the basis of loyalty and not in accordance to any transparent PPRA rules.

 What is called corruption in the modern middle class and capitalist society was not perceived from the same angle in the rural areas and that is the reason same corrupt people are elected again and again. As long as they can get their work done at the grass root level by buying off the services the level of resentment against corruption is not as high as it is in urban areas, particularly in the middle classes.

 At the same time there was a big influx of refugees in the country who were either economic migrants or were pushed out because of the communal riots. Now without any offence to the refugees, we have to understand that globally such large migration of uprooted people has the tendency to grab the economic opportunities as quickly as possible. This tendency was also seen in the filing of highly inflated claims by the refugees. In lighter-vein it can be said that if all the claims are added, the total area could be more than that of the subcontinent. This scramble for land also infused corruption in our society in which the state had the power to bestow agriculture lands and urban properties.

 It would be interesting to narrate here how the Pakistani business classes, who crib about corruption in their posh offices, grew after partition. According to Mr. S. M. Jamil, the first General Secretary of the Muslim Chamber of Commerce in India, a few months before partition Mr. Jinnah had asked him to convene a meeting quickly to appeal to the Muslim businessmen to invest in Pakistan. The meeting was held in Bombay and most of the businessmen expressed their readiness but had only one concern ‘will the source of investment be asked by the authorities and taxed?’ When Mr. Jinnah was informed about their concern, he instructed Jamil to discuss this with Ghulam Mohammed, who assured that no questions would be asked. Interestingly, this issue comes up cyclically in Pakistan. Even now amnesty for black money is being considered in the coming budget while the moralists are opposing it.

 Pakistani business class in the 50s was mainly that of traders which accumulated capital by all fair and foul means with the patronage of the government officials who ruled through the ‘License Raj.’ Thus its growth was dependent on getting favours from the civil bureaucracy which issued licenses in an over-regulated economy. Even for an expansion of the factory, the Investment Promotion Bureau and Ministry of Industries had to be bribed.

 With the liberalization there are many businesses which don’t seek favour from the government and manage to avoid corrupt practices as much as they can. This economic culture should be kept in perspective while analysing corruption today. Any society’s moral and cultural values are related to the level of its economic development. Global experience shows that developing countries had and still have a higher level of corruption as compared to manageable developed economies. The 10 least corrupt countries have also another commonality – they are welfare states.

 First let’s briefly define ‘Corruption’ as it is perceived today by the economists and political analysts. According to the Oxford Dictionary of Politics: “Corruption obtains when an official transfers a benefit to an individual who may or may not be entitled to the benefit, in exchange for an illegal payment (the bribe). By taking the bribe, the official breaks a legal binding he gave to his ‘principal’. It further says “a positive relation appears to exist between the extent of bribery and the ‘level of red tape….”

 Two social scientists Donatella Della Porta and Yves Meny in their excellent book ‘Democracy and Corruption in Europe’ have said: “Corruption can be initially defined as the clandestine exchange between two markets; the political and/or administrative market and the economic and social market.”

 Corruption perhaps has been the oldest evil that has existed in the human society. In most religions offerings and charity are given to get some return from the gods one worships. However, the issue has come under the spotlight particularly after the end of the cold war. Before that the capitalist democracies were only critical of corruption in the socialist countries and they would cover up their own follies. But once the fear that people might get attracted to an alternate socialist politico-economic system fell with the Berlin war, the western democracies became introspective about the ills within.

 Corruption in developing and developed countries is not only an exclusive domain of the politicians and the government officials, as it appears from the present uproar in the media in Pakistan, but. Multi-billion corruption scandals in the West have brought down famous banks and companies and the worst recessions. In Pakistan the media industry is also well aware of the corrupt practices of their owners, advertising agencies and even multinational brand managers. The irony is that the same people sermon ad-nauseam about politicians’ and government officials’ corruption — forgetting that only the pious who have not sinned can cast the first stone.

 Public interest about corruption in the developing countries like Pakistan has surged as the democratic institutions started functioning and the economic structure is being deregulated giving more space to the private sector. This transition has led to the collision between the market players and a new social class of politicians who are seen by the people acquiring wealth rapidly.

 The arrogance of this new class of politicians is irritating to the middle class of the country. When the government officials and corrupt politicians react to the voices raised against corruption they miss the point. They fail to recognise that with the democratic evolution ‘new social forces’ have also “risen which previously lacked social muscle to stand up.” These emerging social forces are led by the middle class journalists and backed by the rejuvenated judiciary. What is happening in Pakistan on this issue is not peculiar. The media and judiciary of the developed countries like Italy, Spain, UK and France in the late eighties were equally vociferous. And this struggle continues even today.

 We should analyse who are the major actors in this ‘corruption drama’ at the national level and what gives them a chance to gather this rent from the society. What is the level of the financial loss to the country because of corruption is difficult to say. The figures floating in the media at present are not backed by any in-depth economic study. I think a bigger loss to the economy is committed by the delayed decisions on important development and commercial issues. Present electricity is a glaring example of shilly-shallying decisions.

 Leaving aside the corruption at the lower level for the time being let’s discuss where each deal runs into million and billions. The major actors in Pakistan are the same culprits who scream from the pulpit that corruption is rampant – politicians, civil & military bureaucracy and the business tycoons. The latter is the biggest beneficiary of this system. As one businessman confessed the other day after giving me a lecture on rising corruption that if a business house pays Rs10 million in bribes, the gain acquired is at least ten times of this amount.

 Much of the corruption that irritates the common man is when they have to pay bribe to get the legal work done at the lower level. This American functionalists say is for ‘lubricating the machinery that was jammed’ in the developing countries. They also appropriately named it as ‘wheels’ as opposed to ‘bribe’ because the person who lubricates these ‘wheels’ is just getting the file moved, cutting the bureaucratic red tape.

 In Pakistan at present however the corruption of the politicians is in focus much more than the lower level corruption which is irritating the common man. A seasoned professional manager had told me once that “when we vote for one candidate who has spent Rs20 million or more on his election campaign, we also stamp approval that he can recover his investment with interest.” Those of us who have the opportunity as journalists to visit the elected representatives’ home or offices in the morning have seen a number of people sitting in the waiting room with applications. And almost 80% ask for illegal favours. These people do not suffer from middle class morality issues that corruption and nepotism are immoral.

 The fact that majority of the 37 million votes cast went to these two parties shows that voters did not care for all the corruption allegations which were drummed up during the eight-year Musharraf rule. The people’s court gave its verdict in the elections. May be they chose the lesser evil, the one which is approachable.  

 But most of the people who complain about corruption in their drawing rooms or on TV have either not paid their taxes honestly or have bribed the people to get extra favours. It is a part of all capitalist economies; the difference is that of degrees. In all civilized countries the cases are registered against the politicians under normal law. This is not the first time when the government has taken back the cases against holders of the public office. Ayub Khan disqualified politicians, who were later rehabilitated. Ghulam Ishaq Khan declared Asif Zardari as the most corrupt man in his speech announcing sacking of the PPP government and a few months later he was seen swearing in Zardari as a minister. Nawaz Sharif was ousted with charges of loan defaults and tax cases, he returned to power and all cases against him were thrown in the dustbin.

 Though PML (N) opposed NRO, it signed the Charter of Democracy which talks against political victimization. So implicitly there was an NRO hidden in the CoD. The fact that PPP and PML (N) accepted each other shows that they were not serious about corruption cases filed by them during their tenure. It was accepted by both parties that in future they would refrain from political victimization of each other. Interestingly no political party challenged for disqualification of Zardari when he was contesting the presidential elections, although we know his past record.

 A point to be remembered is that no government has been thrown out in Pakistan just because they were corrupt; they are shunted out because they tried to claim their rightful place in the political structure of Pakistan. Because they have different national security prescriptions than the one followed by the establishment.  

  In all quasi-feudal and nascent capitalist societies the majority of politicians (to borrow Meny’s term) ‘live by politics’ looking for advantages; very few ‘live for politics’ that ‘is intrinsic or ideological satisfaction.” The system would take time to evolve we have to be patient and keep playing the role of a watchdog. But not that of the wolf that devours the democratic system. As Churchill said it is “the worst of political system, except for all other.” Or as philosopher Noberto Bobbio once said it is “a better system than those that have preceded and succeeded.” Let’s be careful that once again we do not beat the corruption drum so loud that the sound of marching long-boots is missed by the nation. Remember the damage long-boots do is much larger.

 At the same time struggle against corruption should continue as we know, less corruption leads to better HDIs and isn’t that’s our ultimate goal as progressive citizens.

 

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