The thing about corruption — Syed Bakhtiyar Kazmi

How difficult would it be to carry out a detailed comparative analysis of mega

procurement by Pakistan and broadcast it independently and transparently? 

The thing about corruption is that it ain’t going away! Mull over the following
assertion, if ‘they’, the powers that be, ever wanted to end corruption, could it
have persisted, in fact contrarily blossomed, through ancient history all the way
down to modern times? The authenticity of Themistocles claiming, “It has no value
to be a leader if you cannot enrich your friends” might be debatable, but the
veracity of the statement itself is not. History, ancient as well as modern, is
replete with instances of leaders enriching friends, a phenomenon that transcends
geographical boundaries and governance systems. Corruption is equally rampant in developed as well
as in developing countries, in democracies as well as in kingdoms. Those who believe that the genesis
of the recent global financial crisis lay in anything other than corruption can only be categorised as
naïve.

Even in ancient Rome, the rich and well-connected paid proportionally less taxes than the poor and
middle class. The fact that the rich still do not pay taxes should therefore not come as a surprise. It
would be reasonable to imagine that given the hype about democracy being the ultimate form of
governance, those blessed with the right to vote would quickly achieve the much coveted policy
objective of progressive taxation. Au contraire, even the oldest democracies, struggling with
mountains of debt, have failed to tax the rich. Austerity drives continue to be directed towards the
general populace and regressive taxation, even if not on the rise, which is highly debatable, is
definitely still the primary source of government revenue the world over. Is that in itself not a corrupt
practice?

But hang on, in normal parlance, corruption is only associated with public office in developing nations,
which in essence lacks verisimilitude. As the famous saying goes, two hands are necessary for
clapping. Ratiocination unveils why religion summarily assigns the corruptor as well as the corrupted
both to hell. Globally, only the rich have the wherewithal to corrupt and only the poor get penalised
for corruption, so how will corruption ever end?

John Perkins in his famous account of working as an economic hitman confesses his role in saddling
developing countries with foreign debt, thereby subjugating their governments to the will of the United
States. As they say the taste of the pudding is in the eating. Perhaps Mr Perkins’ confessions are
delusional and may even be conspiratorial. However, most of the developing world today is saddled
with foreign debt and none publicly oppose the actions or adventures of the benefactor. While news of
corrupt rulers together with instances of mega corruption in international tenders financed through
foreign debt are fairly commonplace in the developing world, in which universe have international
creditors or foreign suppliers been classified as culprits? Why is all the noise about transparency
limited to only one end of the spectrum?

Can it be that governments of the developed nations are not aware that their corporations are
resorting to bribery when competing for international mining concessions, construction contracts and
contracts for goods and services? Is it possible that regulators in oil-rich countries are unaware that
the reason behind their state-owned enterprises’ negotiating better prices is kickbacks, whether paid
directly or indirectly? Are multilateral creditors so naïve that while financing mega projects, the
difference in contract price between different countries, for the very same equipment, and easily
discernible, is attributed to transportation and other overheads? Seriously, the Swiss government,
irrespective of its banking laws, is not aware that the money lying in its bank vaults is looted from the
poor of this world?

Take the case of the mega telecom corruption scandal from across the border, which according to
some estimates cost its exchequer $ 40 billion, their telecom minister got jailed and the Supreme
Court cancelled 122 licences. Apart from the fact that the exposé was satisfying and amusing for most
in Pakistan, can anyone recall who paid the bribes? Worst, does anyone believe that the very same
licences will now be auctioned and issued in a transparent manner and without any graft?

The dilemma is that in the information age, identifying and quantifying macro corruption is a ‘walk in
the park’ search on the internet, in spite of which it still persists. For instance, how difficult it is to
compare prices of plant and machinery sold by multinational corporations around the world, and
question why the same equipment cost more in developing nations? Why do construction projects’
costs vary significantly between the rich and poor countries?

Definitely, the initial response will appear quite logical, if such a query is ever raised, albeit a bit of
introspection will reveal everything. Ever wonder whether or not all developing nations are sold oil at
the same price. Is that price comparable with that offered to developed nations, and how difficult
would it be to confirm all that? Such an analysis is equally relevant for exports.

The general explanation for the price variances that would be starkly evident, if anyone ever made an
effort, in the above and similar transactions are simply explained by economic pundits as risk: country
risk, credit risk, business risk and the risk of risk! And let us not forget capitalism’s most favourite and
rather brilliant alibi — which over time has been elevated to revered status — supply and demand, the
free markets.

The level of aggressive support within the elite for free markets is supremely fascinating, especially
considering that most are entirely clueless about how the economy works. Frankly, if free markets are
the elixir for developing nations, the period of treatment for the cure appears infinite. Take Pakistan;
even after decades of practising whatever the creditors suggested can it be claimed we are better off?

Irrespective, the reflection seems to have gotten off track, the point is that ‘they’, for their own
rapacious objectives, do not want to eliminate corruption, and they are mighty and therefore right!

Ponder why an independent, activist media is silent on macro corruption. How difficult would it be to
carry out a detailed comparative analysis of mega procurement by Pakistan and broadcast it
independently and transparently? So why does the media only harp about micro corruption? Seriously
the question is not only how many billions of dollars are held outside Pakistan, the question is who
paid that and why.

And, for the record, under the current scheme of things, corruption will persist at the micro level as
well, because, briefly put, the same principles apply. Seriously, articulating an idea within the
available space is really a pain!

Can corruption be curtailed? Sure if they wanted to! As far as the how is concerned, read all of the
above again, the solution is in there!

And the thing about golf, it ain’t going away!

Cheers!

The writer is a chartered accountant based in Islamabad. He can be reached at

syed.bakhtiyarkazmi@gmail.com and on twitter @leaccountant