The Scourge of Corruption

By Anil Gujadhur

It is generally observed that more public noise is heard against corruption when economic conditions are depressed than during an upturn. Seen from this angle, corruption can be considered a countercyclical phenomenon. In reality, corruption may be taking place with more ferocity when the economic cycle is up rather than when it is down. Consider all the bad loans that global financial institutions were handing out left and right before the financial crash of 2007 simply to make as much money as they could.

Actually, this misperception about the timing of corruption could be due to the fact that acts of corruption are not as keenly observed when the going is good as it is when circumstances are tougher for ordinary men and women.

Broadly, corruption refers to breach of trust when one or more persons in a position of authority use that power for private gain. It involves fraudulent and dishonest conduct associated with bribery or an unfair exchange between the concerned parties to the detriment of the public. It is immaterial whether the damage done is not so substantial. Once the principle of good conduct is breached, by legalistic contrivances or by plain gross misbehaviour, you cannot but pour all of it into the same chapter of corruption, whether in small matters or big.

It is surprising that many who condemn corrupt practices make it appear as if it is altogether new. This is surely not the case. It is perhaps as old a practice as when social constructs started to emerge. It has manifested itself in one form or other, some more odious than others. But the fact is that corruption has always existed in some form or other, at a low or high scale, depending on circumstances. Read the scriptures if you want to convince yourself about this. In fact, in more modern times, certain governments have used corrupt practices from time to time to topple entire governments and undo countries which they do not favour. This type of abuse goes in the more sacrosanct name of restoring ‘balance of power’ or serving ‘superior interests’ among nations but it is nothing less to corruption.

Incremental growth

Using the latest scandal that might have surfaced up, clever manipulators make it appear as if that scandal was a monumental fraud or act of dishonesty committed by specific persons. Or that some nations or persons would be more prone to engaging in corruption than others. By all means, one should not condone corruption. However, it must be recognized that corruption grows incrementally; it builds up on the past and is not the limited prerogative solely of nations that have made lesser economic progress., The list of the corrupt also includes those who claim to be ‘holier than thou’. It grows by slow degrees. If someone else has transgressed the bounds in the past, well, it is assumed that one more thing in that line would not be as if you are discovering America!

How can one accept that the various uprisings we’ve been seeing against the holders of power in the Middle East rest on something intolerable that happened only yesterday? Not at all. Several of those dictators have been nestling it over decades for their private benefit and that of their cronies who helped keep them securely in power. The phenomena of revolt we saw and have been seeing to date are grounded in years of serious exploitation of the masses, recuperated unfortunately today by extremist elements. At the bottom of it all are the deep wounds rulers and their inner circles have been inflicting upon the populations for several decades continuously. They’ve been skimming off all the cream to themselves by virtue of their stranglehold on power, sometimes not even leaving the crumbs for the masses. Not less guilty of crime are the powers which, for their sectional interests, have removed secular states in those places only to install dictatorships as it suited their purpose.

It is easy to realize how pervasive the practice of corruption is when you look at the bigger picture, as above. Being more subtle in nature, white-collar crimes prevailing in the richer countries come to the surface mostly when deep damage has already been wrought. The latest financial crisis and the LIBOR-rigging scandal undertaken by the greatest banking names of the planet are the latest cases in point. One should not therefore rush to put a special stigma of blame on corrupt individuals in less well-off nations who indulge a bit more grossly in those acts of corruption than in the more sophisticated places. Perpetrators of corruption reach the same goal of perverting the system, whether in rich or poorer countries. One must realize nevertheless that there are successful countries in the world such as Sweden, Norway and Singapore that make it to the top of all nations without delving into gross acts of corruption that we see in what are called “third world countries” and not less so in those so-called “First World” countries which try to put themselves on a pedestal as if they were above reproach.

One might ask oneself the question as to how it is that Gabon, Angola and Nigeria who, on the African continent, have developed substantial oil exporting sectors in their economies, but the growth is really actually taking place in the countries of the West that consume their oil export. Surely, something is wrong why the source countries are not doing just as well? A richly endowed country with all sorts of mineral wealth like the Democratic Republic of Congo, second largest in Africa and eleventh in the world, gives just a sample of how Africa as a whole is responding poorly by allowing other nations to lay their hands on domestic resources without being able to make the continent take its destiny in its own hands on the global stage despite its vast mineral wealth.

Basic misgovernance

Most of the African countries have been independent from the 1950s; so, it would be inept to claim that they are being debilitated by colonisation. It is the weak internal factor which explains this want of achievement. And this is grounded in basic misgovernance that has plagued several of the African countries. At the root of this massive failure lies corruption in various shapes. Like the Middle East, many African countries have tended to throw up lifelong presidents/dictators who would not relinquish power in a democratic playout of popular choices. To remain in that position, those presidents for life and their cronies have had endless recourse to corruption. In public, they display by their lavish lifestyles, a level of wealth and luxury that their populations can only witness as spectators, while remaining in utter poverty, poverty that gets flouted constantly by those indecent displays of power by their “leaders”. The new president of ill-fated Malawi has just given up the private jet and the large fleet of German luxury cars of her predecessor as a sign of reneging on that past of excesses. One would hope this attitude generalised across the continent.

The problem with corruption is that it tends to perpetuate a lot of power in few hands, even where the hands keep changing in the course of electoral cycles. To elect and/or to keep themselves in power, politicians have had a price to pay to those secret wielders of power operating behind thick screens, whether by party financing or by canvassing sectional supports to parties. This is applicable to several political regimes which have been in place in past years: there are those who find themselves enriched beyond measure from one day to the next, not necessarily by engaging in the drugs trade. So-called political “supporters” want for themselves nothing less than what the previous holders of political power gave to their own cronies.

Back home, we are told that a national cadastre is only now seeing the light of the day. That work apparently emerged when it was increasingly being challenged that the National Residential Property Tax of 2006 was fundamentally unfair. But surely, we needed such a cadastre to be in place for other reasons as well, such as to do a good strategic land reform for a sustainable future, keeping land price from soaring into becoming a highly speculative element jeopardizing the ability of the upcoming generation to even afford residential property. That would also have served to ward off allegations that state lands would have been landing into the wrong hands for lack of clarity as to where they were. Had this information been publicly put in place, it would have allowed a closer control against squatters on state and private lands. Wherever loose ends are to be found, whether deliberately or not, they inevitably become breeding grounds for corruption.

The courts can only deal with cases that are brought before them on a one-to-one basis and other institutions don’t appear to go far enough to get to grasp the bigger picture of the damage wrought by carrying forward corrupt malpractices. So, who is in charge to arrest the scourge and prevent it from being considered as if it were an all-embracing widespread dimension, which surely it is not? There must be a number of honest citizens mindful of their integrity and shunning ill-gotten gains, isn’t it?

Negative perception

The deeper problem is that corruption impacts badly on the working of the macroeconomy. There are chain effects. First, it undermines national credibility. Several African countries are victim of that kind of perception. Second, arbitrariness of decision-making in the context of corruption causes investors to lose faith in the governance structure of a country as a whole. Third, the few investors who are inclined to invest nevertheless make their investment a function of the good disposition of the rulers-that-be towards them. This means that places like these are shunned by those investors who would have simply relied on their objective business flair to undertake investment at their own risk. Fifth, this kind of negative perception thwarts growth and activity levels, in the economy by keeping potential investment down. Perception is a critical element in serious and productive – not speculative — investment decisions.

This perception is normally put in its right perspective by communicating efficiently whenever a country appears challenged in its integrity. Unless you put a stop to unjustified allegations all at once, those allegations gain ground as if they were reality. One of the weaknesses of the immediate post-independence government of Mauritius was this gap of efficient communication. They failed to respond energetically when a mud-slinging campaign of denigration was launched against their supposed bribe-taking in all and everything they undertook. That will not be the only occasion so-called independent papers have combined their forces to make a mountain out of a molehill solely to denigrate their political adversaries. When the communication gap is allowed to yawn, it tends to consolidate the view – and this is what India is currently facing up to – that the powers that be have something hideous or really uncomfortable to conceal. It demotivates economic actors currently in operation and makes intending investors shy away. In the process, it is the country that becomes the loser.

It must be said that despite all, we have over the years constructed a solid base for investment to take place in Mauritius. It needs sustaining by continuing reforms and growing the objective base of decision-making of the country. We have harvested certain comparative advantages compared with others in our category. The only way forward is by upkeeping a pool of local high skills that can combine favourably with international production, onshore and offshore. This kind of environment is created by being result-oriented, clear and decisive, rule-based across the board and indiscriminately pushing up anyone who will extend our production frontier. Sometimes, details like corruption, if overlooked for too long, can undermine even whatever good work has been done. We must tread it cautiously, more than ever before.

* Published in print edition on 12 October 2012