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Corruption – an analysis in the global context
Mushtaq Ahmad Mahindro
Corruption is generally defined as dishonest or fraudulent conduct by those in power,
typically involving bribery. It is the abuse of entrusted power for private gains.
Transparency International explains it as, “acts committed at a high level of government that
distort policies or the central functioning of the state, enabling leaders to benefit at the expense
of the public good. Petty corruption refers to everyday abuse of entrusted power by low- and
mid-level public officials in their interactions with ordinary citizens, who often are trying to
access basic goods or services in places like hospitals, schools, police departments, and other
agencies. Political corruption is a manipulation of policies, institutions, and rules of procedure in
the allocation of resources and financing by political decision-makers, who abuse their position
to sustain their power, status and wealth”.
A couple of decades ago corruption was seen so deeply ingrained (as a matter of it is at
present as well at most of the places) that it was considered a necessary price for doing any
business and fighting against it was regarded as futile and even harmful. But the creation of civil
societies, efforts made by Institutions like Transparency International, and the emergence of
media exposing the corruption scandals inspiring widespread public condemnation have been
very much instrumental in taking many of the world leaders to the task. As a result of this many
governments and international bodies had to introduce anti-corruption reforms including
devising mechanisms to recover losses. Despite all this, the world has a long way to go to learn
from the ongoing scandals and fight corruption effectively.
The extent in Pakistan as compared to the world:
According to Transparency International Pakistan (TIP), Pakistan is at 124th position out of
180 countries with a score of 31/100 in the 2020 corruption perceptions Index, a little better than
2015 with a score of 30. It is in a better position than Iran and Bangladesh with a score of 25/100
and 26/100, and position 149, 146 respectively. However, India has been shown at 86th position
with a score of 40/100.
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The top 10 cleanest countries are, New Zealand, Denmark, Finland, Singapore, Sweden,
Switzerland, Norway, Netherlands, Germany, and Luxemburg (with a score of 88 to 80/100) –
the more the score the more the country is cleaner.
The topmost corrupt countries are Somalia, Syria, Yemen, South Sudan, Venezuela, Sudan,
Equatorial Guinea, Libya, North Korea, and the Democratic Republic of Congo with a score
ranging from 12 to 18/100 (12 for Somalia and 18 for DRC).
For instance, as reported by BBC on 29th September 2019 that Teodoro ruled Equatorial
Guinea for 40 years. His son Obang vice president of the country as well had a collection of
supercars like Bentley, Rolls Royce, Lamborghinis, and Ferraris worth more than $5o million
confiscated by the Swiss and auctioned after the prosecution and investigating against Obang for
money laundering and misuse of public funds. Under the deal, $23 million were to go to social
projects in Equatorial Guinea, a former Spanish colony where poverty is rife. This is common in
all third-world countries including Pakistan.
However, maximum corruption has been observed in those countries which are war-torn, and
civil wars are going on. In other words where the government has extremely loose control over
the masses. On the other hand, clean countries are those where good governance prevails, there
are high literacy and institution of public accountability performing at its best.
Even though conditions have improved a bit due to a peaceful transfer of power, the
maturity of political parties, and an independent and powerful judiciary, corruption is still
prevalent with full force. TIP has stated in its report, “Corruption within the public sector
remains one of the biggest challenges, faced not only by Pakistan but the world as a whole,
particularly in areas such as political parties, police justice system, privatization, etc
The main source of political corruption is the development budget where funds are allocated
to elected members of national and provincial assemblies who prefer to recover millions of
rupees they spend on their election campaign.
Similarly, allotment of land (agricultural, industrial, commercial and residential) to officers
and bureaucrats is also a source of corruption.
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Causes of corruption:
1. The greed of money, desires.
2. Loose anti-corruption, administrative and judicial control
3. Weak democratic institutions, weak civil participation, and low political
transparency.
4. Inefficient administrative structures.
5. Low print and electronic media freedom.
6. Norm of in-group favoritism
7. Political instability
8. Low levels of education and weak or non-existence of ‘Institution of public
accountability
9. Poverty
Impacts on the economy:
In Pakistan, corruption has caused an unbearable loss to the economy in recent decades. A
newspaper has reported that the estimated loss corruption caused was more than Rs12 billion per
day including Rs7 billion of tax evasion. The tax-to-GDP ratio remains low at 8% mainly due to
corruption.
The energy crisis, which kept the economy crippled is also being considered as an outcome
of corruption. According to a rough estimate, corruption in the energy sector- including theft and
line losses- has cost the economy approximately Rs100 billion in the past five years. These
pilferages have resulted in a massive circular debt, which leads the country to face acute energy
shortages.
The widespread corruption over the years has had a significant and damaging impact on
foreign direct investment (FDI). The World Bank highlighted this in a report on Pakistan’s
investment climate. According to the bank, corruption, a serious and growing obstacle to the
investment climate of the country. It is a common norm for firms to pay informal payments in
the form of kickbacks and commissions to government officials and all those involved even in
the political circles to get things done.
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The tax havens abroad in the form of offshore companies and foreign commercial banks
have also encouraged worldwide high-level corruption as they encourage the corrupt elite of the
developing world to park their illegally earned money with them. And they provide all kinds of
assistance and protection to this money. It is also very difficult to retrieve such illegal money
from these institutions. Thus they have become the main source of laundering illegal money. The
corrupt elite also transfers money abroad and purchase highly expensive buildings in all the
important capitals and resorts of the world. The rich countries encourage this practice as this
helps their economies. Much Pakistani political elite has also been reported to have deposited
their illegally earned money in such safe-havens.
How to end corruption?
Ending corruption or arresting the ongoing trend depends on the formulation
of a well-structured strategy which of course starts with the head of the state
commensurating with his/her level of willingness or the determination/commitment
level. There is no silver bullet that exists to fight corruption. However, many countries
have made significant progress in curbing corruption, the examples of which have
been made part of this write-up. Here are some ways to tackle this issue.
1. Effective law enforcement:
The corrupt must be punished and taken to task as breaking the cycle of impunity is the most
important prerequisite. Foolproof execution of the enacted laws upheld by an independent and
effective judicial system.
2. Reforming the financial management and auditing system:
By reforming the financial management system and strengthening the auditing system has
happened to be very instrumental in many countries in curbing corruption. Proper auditing
played an important role in preventing the misappropriation of resources.
3. Public’s access to information:
The public’s access to information has been very much effective in curbing corruption. For
the reason that access to information increases the responsiveness of the government,
simultaneously increasing levels of public participation in the country. Empowering citizens and
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holding the government accountable is a sustainable approach that helps to build mutual trust
between citizens and government. Community monitoring initiatives in some cases have
contributed to the detection of corruption, and reduced leakages of funds.
4. The solution in the world perspective:
Park Chung-hee took over the government in South Korea in 1961 and embarked upon a
comprehensive plan to promote economic growth in the country by establishing a blend of state
capitalism with free enterprise, i.e., private-public conglomerate. The strategy revolved around
export-oriented labor-intensive industries to give employment to the young working force
available. There were reports about corruption in the country but that happened to be a temporary
phenomenon. However, the factors which served as effective checks and balances against
corruption were a strong and independent judiciary and an active parliament.
According to Dr. Mahathir Mohamad, it was the system of cooperation between the public
and private sectors that led to Malaysia’s success. The private sector has to be encouraged as the
main source of tax earning, and if we help them to make profits, they will pay more taxes. Hence
bureaucratic procedures were reduced to the minimum to encourage private investment. Delays
were removed. And the bureaucrats were told, that their pay is being paid by these people.
5. The role of media in exposing corruption cases in Pakistan:
Positive role In Pakistan before 2002, the electronic media was entirely dominated by state-
owned institutions like Pakistan Television Corporation and Pakistan Broadcasting Corporation.
However, this monopoly was thwarted, when the Musharraf regime allowed private television
channels to be operated. This liberalization of the electronic media proved to be a major force in
exposing corruption-related cases and scams. These include; Rental Power Projects (RPP) scam
2006, involving several instances of bribery in the Rental Power Projects (RPP) where top-level
ministers were involved.
PIA was reported to have been mismanaged by the executive authorities giving rise to a
corrupt culture of bribery. Corruption in PIA led to losses of around US$ 500 million. Similarly,
massive financial losses were reported for Pakistan Railways caused by embezzlement. The
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media reported a scandal involving federal ministers extorting illegal payouts from travel agents
involved in fleecing Hajj pilgrims to Saudi Arabia.
Media also reported on 40 NATO containers that went missing on their way to the
International Security Assistance Force (ISAF) in Afghanistan. It was later identified that the
missing containers carried cargo that was considered contraband in Pakistan, including liquor to
be sold in Pakistan.
The media reported a major scam in the Pakistan Steel Mills involving Rs.26.5 billion.
Ephedrine quota case was also brought to the notice of the public. Political leadership was found
involved in allocating a quota (worth Rs.70 billion) of controlled chemical ephedrine to two
different Multan-based pharmaceutical companies.
Social media also served as an effective tool to hold the nation's to-be-leaders "accountable"
for various issues like corruption. Citizen journalism is emerging as a growing phenomenon and
an important tool that can be used to curb rampant corruption and thus strengthen democracy.
Various efforts over the past few years have been made to develop institutional mechanisms
to tackle the problem. For instance, the establishment of the National Accountability Bureau with
comprehensive powers to investigate and prosecute cases. But this setup could not result in any
significant achievement in the past.
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