The Telegraph
Since 1st March, 1999
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- Market philosophy does not condemn graft so much as getting caught

Few in the ruling circles here will throw a fit on reading the Berlin-based Transparency International’s survey ranking India among the most corrupt countries in the world. Some of them are more likely to dismiss this with a snigger. Isn’t it a bore repeating the same story over and over again for forty years' Who does not know that corruption here is no longer a problem but a way of life which has turned politics into big business, made economic policy a drag on fast growth and created a bureaucratic jungle where the unwary citizen has to pay ransom money to some babu, big or small, to find his way out.

In any case, how does one find out whether a particular society is up to its knees, waist or neck in sleaze' Every transaction in slush funds takes place in utter secrecy. Where millions of such shady deals take place every year, any sleuth from a non-government agency trying to get at the truth will have to go largely by bazaar gossip or his own hunches.

The market philosophy, which is all the rage today, in fact does not frown on corruption as such. The corporation which bags a fat contract in a tough competition, and rewards its executives for scoring over its rivals, often wins by giving a large pay-off. All this is part of the game. The crime lies not in promoting a culture of graft but in leaving traces behind and being caught. How can the corrupt, who must keep the dubious part of their business under wraps, afford to be transparent'

If the Transparency International wants to get a good idea of how much money third world leaders loot from their people, and how much cash tax evaders from everywhere stash away, it should send some of its investigators to the many places in the cleaner parts of the world where impeccably dressed bankers receive billions of dollars of black money in deposits for safe-keeping. Ironically, they will find that it is those among the more upright in people’s eyes who have attained a degree of sophistication in this business which the corrupt can never hope to match. Those who keep their deposits in numbered accounts in Swiss banks can be sure that the suave executives to whom they entrust their ill-gotten wealth will make sure that no prying eyes will fall on what is hidden in their vaults.

It is indeed the facilities provided by such banks and the immense difficulties created by the legal systems of their countries in unravelling the truth which gives the Mobutus and the Marcoses of the world a feeling of absolute security. According to some media reports, the Congolese general alone had around five billion dollars deposited in Swiss banks, enough to pay back the entire foreign debt of his country. Surprisingly enough, countries which take the lead in campaigning for human rights seldom worry about how quite a few respected members of the rich men’s club have no qualms in profiting from money stolen from poor countries. They provide tax havens and safe places for hiding illicit gains even for dope smugglers and mafia dons.

All this is not to absolve third world leaders of corrupting the political, economic, social and cultural life of their societies or even driving them into a state of anarchy and widespread destitution. It is merely to point to the cynicism of those who pride themselves on the integrity of their public life while patronizing all kinds of shady characters with a surfeit of cash and speaking to the rest of the world from a high moral ground.

It is pertinent to remind them that there are two sides to every corrupt deal which benefits those who dish out millions to clinch a big contract or agreement on a project as well as receivers of kickbacks, and that the one is as culpable as the other for the spread of the culture of graft in high places. The enormous increase in the number of contact men, lobbyists, power brokers and thinkers who equate knowledge with power or deride the very idea of truth as illusory, speaks more of a world of hard-sell and a life corroded by cynicism than of integrity of public life or thought. It is no accident that money and success are the presiding deities of the emerging global order.

A perception of venality limited to pay-offs and kickbacks at the higher levels of the power structure and “chai-pani” money and “hafta” at the lower levels of babudom and law enforcement agencies obscures the larger problem of the moral rot that a hi-tech civilization is spreading. Based on creating new needs, fostering greed, widening inequalities between the rich and the poor parts of the world and spreading hedonism as well as nihilism, it has indeed become the main corrupting force in the contemporary world.

A recent spate of applications for bankruptcy by giant multinational corporations in the United States of America, the only superpower now in the world, does not show up its corporate culture in a flattering light. Surely, they cannot be the only ones among their peers to fudge their accounts' It is the sheer recklessness of Enron and Worldcom in concealing their colossal losses and inflating the value of their shares when these had in fact been reduced to junk that got them into trouble. How can executives in affluent societies, so indifferent to the interests of those who entrusted their savings to them, be concerned about the woes of the poorer parts of world'

Global capitalism, however, has its own ethics in which there is no place for compassion or equity and where concern for human rights does not debar rich democracy buffs from having cosy relations with a variety of despots so long as this serves their ends. It has no scruple in rigging the terms of trade in favour of the rich and imposing sanctions against those who have antagonized rich nations though this hurts millions of poor families. The Bush administration’s current obsession with punishing Iraq when in fact Pakistan has become the main centre for the spread of terrorism is indictment enough of its priorities.

That corruption began in India with the launching of the permit-licence raj back in the mid-Fifties and acquired a new momentum by a competition in populism between the major parties by the mid-Seventies are no secrets. The formation of new regional and caste parties raised the demand for slush funds to new levels. More recently, though the permit-licence raj has been largely dismantled the economic liberalization process has opened up new spaces for speculators gambling on the stock exchange with bank funds, mafia dons operating in big cities, often with the connivance of political bosses, and racketeers, who specialize in extorting money through blackmail, flourishing as never before.

Third world societies can blame the new global order for many of their troubles. International lending agencies often impose tough conditions for giving desperately needed loans that are often politically unpopular. The terms of trade dictated by the advanced industrial nations often impede economic development. While generous in spending on hi-tech arms, even after the end of the Cold War, the affluent are invariably stingy when it comes to aiding the poor who are extremely short of investment capital.

But even when due allowance has been made for the inequitable world order, the corrupting influence of multinational organizations and the spread of consumerist values among the elite groups in all poor societies, it is the local leaders themselves who are largely responsible for the misery of their people because of their profligacy and misgovernance.

In India those in charge, both at the Centre and in the states, have brought the country to the verge of despair through gross fiscal mismanagement. Some states have indeed already become bankrupt, unable to pay some of their staff their salaries for months on end. At the Centre the financial sector has never been in such straits and bailouts at the cost of the taxpayer are the order of the day. A host of scandals about partisan allocations of petrol stations, gas agencies and land have shaken the government even before it has been able to live down the shame of the Gujarat riots. Corruption does not mean only a culture of graft and black money. It also covers political actions designed to increase internal strife and cynical use of the polarization of society into two hostile camps for transient electoral gains, which, in the end, are self-defeating.

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