A Little Corruption

Megasthenes Explains Why Sleaze Never Pays

The story was told to me by a friend of many years. He was a diplomat of a developing country. In the 1990's, while posted in the capital of an important development partner, he had gone for a debriefing session with S, a senior executive of a conglomerate, who had just returned from an extended tour of his country. The purpose of the tour had been to appraise the feasibility of foreign investments there. S had liked much of what he saw. The basic infrastructure was in place, the laws were investment friendly, and the work-force more than adequate. There was a problem though, corruption. Corruption, S hastened to explain, could be found in some form or other in most countries. In absolute terms, corruption in his own country far exceeded, even dwarfed, what S had seen, sensed and heard during his visit. In his country, to be elected to parliament, a candidate would spend upward of $2 million. The money had to come from somewhere. S knew of hotels where briefcases with huge sums of money changed hands. Corruption, in his country, whatever its exact form, was, however, largely confined to segments in the upper echelons of the bureaucracy, some political elements, and certain big corporations and business concerns. It did not in any manner affect the lives of ordinary citizens. What he had gathered during his visit was something different. Even for the very basic services and facilities, such as a passport, gas or phone connection, or a permit or clearance, one had to contend with corruption. It intruded upon the daily life of the ordinary citizen. Such corruption tended to be a disincentive or deterrent to investment. S was not worried about the ethical aspects of corruption. His only concern was that corruption should not adversely affect business--a somewhat amoral, if also functional approach to corruption.

In the mid 1980's, the then Indian Finance Minister VP Singh unleashed what came to be known as the “raid raj”. The move targeted suspected tax evaders, and some very big business establishments, were raided. It generated panic, resentment and fear within the business community. The late LK Jha was then a member of the Rajya Sabha. Jha's had been an illustrious career in the Indian Civil Service. He had excelled as an administrator, as a diplomat, and, in a personal capacity, had served on the Brandt Commission. At Cambridge he had been a student of John Maynard Keynes. At the height of the raid raj, Jha reportedly addressed a letter to Prime Minister Rajiv Gandhi. The purport of his message was simple; the enterprise and dynamism of a thriving private sector constituted a vital engine of growth for a country, and the confidence of the business community in the government, thus, may not be put at risk. In other words, less obtrusive means, perhaps, could be applied to address the problema pragmatic, "big picture", and clinical perspective of the issue. VP Singh eventually moved to the Ministry of Defence, from where he would part company with Rajiv Gandhi and the Congress.

Years back, a bureaucrat reputed for honesty, was appointed to a pivotal position in an agency dealing with corruption-related matters. During his tenure, an IMF delegation visited Bangladesh for bilateral consultations. A visiting delegate, a civil servant from an Asian country, was an old friend whom he had not seen for sometime. Naturally enough the two met quietly over lunch. It was a private meeting of friends, in no way related to the delegation's visit, with which in any case the bureaucrat was not involved. As they reminisced and talked casually about each other's work and responsibilities, the delegate made a startling observation. It was his experience that a "little corruption" often facilitated growth in a developing economy, in the manner of a catalyst. Corruption, within certain limits, thus, served a constructive purpose. Logically it would follow that corruption is something to be combated not wholeheartedly but flexibly. Not everyone, to be sure, would subscribe to such a philosophy of governance.

The late Altaf Gauhar recounts in a book, that in May 1950 he had led a delegation of young civil servants for a meeting with the then Secretary General to the Government of Pakistan, Chaudhuri Muhammad Ali. The purpose was to seek Ali's support for an upward revision of pay scales. The young officers would soon be occupying positions of responsibility and authority on a monthly salary of Rs. 350. They represented to the Secretary General that exercise of power without adequate recompense was an invitation to corruption. Ali was not impressed. Money, he assured the delegation, had nothing to do with honesty; most poor people were God-fearing and honest, and many wealthy persons thoroughly dishonest.

In 1946, Chaudhuri Muhammad Ali had been recommended by the Viceroy's Private Secretary, George Abellwho incidentally played first class cricket for Oxford and the county of Worcestershire for appointment to the Viceroy's Executive Council. Ali had declined the coveted appointment. Acceptance would have meant forgoing his lien on government service. He was several years from superannuation, and, in what was clearly the last phase of the Raj, was not prepared to risk a secure career. He would go on to hold high political office in Pakistan. Ali was right in his response to the delegation; corruption owes more to greed than to need. This would explain the likes of John Stonehouse, Robert Maxwell and Bernard Madoff.

There was a recent news story that Pakistan has suffered a considerable financial loss due to corruption. The National Reconciliation Ordinance of 2007, by which immunity was granted to politicians, bureaucrats and military personnel charged with corruption, was said to have cost the country an estimated Rs.100 billion. And secondly, the National Accountability Bureau, which was investigating cases of "mega corruption" against "the high and the mighty," had been rendered ineffectual, almost dormant, for the last two years. Cases and complaints were no longer being effectively pursued, resulting in the loss of an estimated Rs.50 billion to the exchequer, making for a grand total of Rs.150 billion or $1.8 billion. The Bureau was expected to be replaced by another agency with diminished powers and authority. In the matter of policy decisions, political expediency invariably carries more weight than purely moral considerations.

James Lauritz

For historian Gibbon, corruption was the most infallible symptom of constitutional liberty. It is also a commonplace of the human condition; a phenomenon not without its complexities and nuances. It is no more likely to be completely eliminated than the other felonies and crimes to be found in the penal code of a country. There is a fine line though that separates corruption from other felonies and crimes; public perception tends, by and large, to associate corruption with the machinery of government.

In a speech at Bloomington, Illinois in 1948, Adlai Stevenson very aptly outlined the role and place of government in the life of a people. Government, Stevenson asserted, "is more than the sum of all interests; it is the paramount interest, the public interest. It must be the efficient, effective agent of a responsible citizenry, not the shelter of the incompetent and the corrupt". Corruption, of course, can never be the only focus of government. Pervasive corruption, however, will surely find place in any government agenda, as an issue of high concern.

Megasthenes is a columnist for The Daily Star.