The Global And Local In Corruption Business

Marcos opened a window, showed a huge bridge and said: See that? It was built with World Bank money. Ten per cent was enough to build this palace. Sometime later Marcos visited Kinshasa and was even more impressed to see Mobutus grand palace. Where did you get the money for this? Marcos asked his proud host. Mobutu opened a window, pointed out and said: See that bridge? It was the same World Bank money. A puzzled Marcos rubbed his eyes and said: I dont see any bridge?

Exactly replied Mobutu, We had a cost over-run on this palace. I had to take 100 per cent.

 

The less cynical will, undoubtedly, draw a more hopeful conclusion from that story. The East Asian strategy for corruption is more productive than the African one! Politicians everywhere take their cuts, some get the work done, others dont bother. In a democracy like Indias they can at worst get stuck in long drawn court cases. It takes years of misrule to meet the fate of a Marcos and a Mobutu.

Regrettably, though, there is a creeping complacency about corruption in high places, and this is again exemplified by the nonchalance with which shocking revelations about Mobutus corruption by the Financial Times (London) has been received. FTs investigation revealed that Mobutu had siphoned off as many as $4 billion from aid funds received by Zaire from multilateral and bilateral donors to build a global empire of real estate and retainers.

The FT reported that in spite of clear evidence from early in his regime that Mobutu misappropriated and wasted funds made available for development by multilateral financial institutions, the World Bank and the IMF, and bilateral donors, Mobutus benefactors in the United States and western Europe, primarily France, ensured that the funds kept flowing. The FT investigation also showed that Mobutu regularly received direct cash payment from the US Central Intelligence Agency, running into millions of dollars.

What was Mobutus contribution to Zaire, now renamed the Democratic Republic of Congo? The countrys per capita GDP in 1995 was down to $117, 65 per cent below the 1958 estimate. Zaire/Congo has experienced a developmental meltdown despite being enormously rich in natural resources.

It doesnt require more elaboration to conclude from the experience of countries like the Philippines, another economy that is today worse off than barely two decades ago, and Zaire/Congo that the mix of corruption and authoritarianism is sure to subvert development and bound to put societies on a downward spiral. Honest and open governments have a better track record of delivering on development.

Thanks to leaders like Marcos and Mobutu, and to their more democratic counterparts nearer home, aid agencies and donors are increasingly focussing on corruption and governance in the developing world. In 1996, the Economic and Social Council of the United Nations even adopted a Declaration against corruption and bribery in international commercial transactions. Unfortunately, the focus is mostly on the bribe-taker and little is done to damn those who bribe and those who tolerate or encourage corruption in the name of superior goals.

To guide this process, a Berlin-based non-governmental organisation called Transparency International has created what it calls a corruption perception index. The index is based on a survey of international businessmans perception of corruption in the countries in which they operate. Transparency Internationals 1996 report (Sharpening the Response against Global Corruption: Transparency International Global Report, 1996, Berlin) places Nigeria, a non-democratic country under military rule, at the top of the pile, followed by Pakistan, Kenya, Bangladesh and China.

Mercifully, India is not in the top league but is not very far behind China. That, however, is no consolation. Talk to anyone doing business in Asia and they say corruption works in China but is very inefficient in India!

If India scores over Pakistan and China it is also because an active judiciary and a critical and open media give the impression of going after the corrupt. While some appreciate this difference, the die-hards wonder how clean the judiciary is and how tenacious and clean the media are.

The problem is not new and more than three decades ago the Swedish economist, Gunnar Myrdal, devoted an entire chapter to it in his famous tome, The Asian Drama. At the time Indira Gandhi dismissed the concern with her famous statement that corruption is a global phenomenon. The Indira Congresss own contribution to corruption at home was in fact to globalise it. Rather than depend on swadeshi business for election funding, the Indira Congress reportedly began sourcing funds in foreign deals. The Bofors affair was the logical nemesis.

Ordinary citizens dont really worry about corruption in high places since it does not touch them. They are distressed more by the demands of the local political parasite and democracy has bred many species of them across the country. However, visible corruption at the top breeds pervasive corruption below. What can help retrieve the situation is exemplary action against what a fellow journalist recently dub-bed the bent and the beautiful.