Universality of political corruption: The root cause of underdevelopment

On the occasion of the International Anti-Corruption Day, Dr. NVR Jyoti Kumar, Professor of Commerce, Mizoram Central University, writes about different forms of corruption and how addressing all such types of corruption is critical in achieving progress and sustainable change.

Hyderabad: International Anti-Corruption Day is being observed on December 9 every year to emphasise the need to tackle corruption which is in a variety of forms across the globe and has its far-reaching consequences.

The United Nations Convention against Corruption (UNCAS) was adopted by the UN General Assembly in 2003 and since then, adherence to the world’s first legally-binding, anti-corruption instrument has become near-universal, with 190 countries became parties to the Convention. Later on, the World Bank Group also considered a major challenge to its twin goals of ending extreme poverty by 2030 and boosting shared prosperity for the poorest 40% of people in developing countries. Hence, this day seeks to mobilise individuals, governments, and organisations to take a stand against corruption.

• Disproportionate Impact on the Poor

Corruption undermines trust in institutions, hampers economic development, and erodes social justice. Corruption has a disproportionate impact on the poor and most vulnerable, increasing costs and reducing access to services, including health, education, employment, and justice. For example, corruption in the procurement of medicines and medical equipment for public hospitals not only drives up costs, but also will lead to the supply of sub-standard products causing life-long adverse impacts on health of people. Empirical studies have revealed that the poor pay the highest percentage of their income in bribes. Some studies have shown that the poor may even be intimidated since they are seen as powerless to complain. Every stolen or misdirected dollar, euro or rupee robs the poor of an equal opportunity in life and prevents governments from investing in their human capital. In a post-COVID-19 pandemic world, it is even more important to understand why countries should invest in human capital and protect hard-won gains from being eroded.

Corruption impedes investment, with consequent effects on economic growth and jobs. Countries capable of confronting corruption utilise their human and financial resources more efficiently, attract more investment, and grew more rapidly. Corruption might deceitfully determine the winners of government contracts, with awards favouring friends, relatives, or business associates of political leaders and government officials, often known as crony capitalism. Perhaps the costliest and the worst form of corruption is in the form of capturing political power through manipulating or distorting the institutions and officers who control them. Addressing all such types of corruption is critical in achieving progress and sustainable change.

• Four Provisions of Tackling Transnational Corruption

In 2023, as UNCAC reaches its twentieth year of existence, this is time to reflect on what the Convention has meant for global efforts to tackle corruption and, crucially, what remains to be done to fully implement this important tool. Such a global efforts may be considered four provisions or mainstays of the Convention: Prevention of corruption, Criminalisation, international cooperation, and asset recovery.

Prevention: An entire chapter of the Convention is dedicated to prevention, with measures directed at both the public and private sectors. These include model preventive policies, such as the establishment of anti-corruption bodies and enhanced transparency in the financing of election campaigns and political parties. Once recruited based on merit, public servants should be subject to professional and ethical codes of conduct, requirements for financial and other disclosures, and appropriate disciplinary measures. Transparency and accountability in matters of public finance must also be promoted, especially in critical areas such as public procurement and the judiciary. Citizens must expect a high standard of conduct from their public servants. Prevention of corruption also requires an effort from all members of society at large. The involvement of non-governmental and community-based organisations, as well as other elements of civil society need to be strengthened to establish and promote effective practices aimed at the prevention of corruption.

Criminalisation: The Convention requires countries to establish criminal and other offences to cover a wide range of acts of corruption, if these are not already crimes under domestic law. Offences committed such as trading in influence, the concealment and laundering of the proceeds of corruption, and obstructing justice are also dealt with.

International Cooperation: Countries agreed to cooperate with one another in every aspect of the fight against corruption, including prevention, investigation, and the prosecution of offenders. They are also required to undertake measures which will support the tracing, freezing, seizure and confiscation of the proceeds of corruption.

Asset Recovery: Countries agreed on asset-recovery, which is stated explicitly as a fundamental principle of the Convention. This is a breakthrough especially for many developing countries where high-level corruption has plundered the national wealth, and where resources are badly needed for reconstruction and rehabilitation of societies under new governments. Several provisions specify how cooperation and assistance will be rendered. Effective asset-recovery provisions will support the efforts of countries to redress the worst effects of corruption while sending at the same time, a message to corrupt officials that there will be no place to hide their illicit assets.

Where does India Stand?

The 2022 Corruption Perceptions Index (CPI) shows that most countries are failing to stop corruption. The CPI ranks 180 countries around the world, scoring on a scale of 0 (highly corrupt) and 100 (very clean). The global average remains unchanged for over a decade at just 43 out of 100. More than two-thirds of countries score below 50. India ranks 85 among 180 countries. "The case of India is particularly worrying. While the country's score (of 40) has remained stagnant over the past decade, some of the mechanisms that could help reign in corruption are weakening. There are concerns over the country's democratic status, as fundamental freedoms and institutional checks and balances decay," the report revealed. The Narendra Modi government’s much-trumpeted crackdown on black money took a big hit when its demonetisation move in 2016 did not achieve the main goal of unearthing black money.

Furthermore, funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, soared to a 14-year-high of 3.83 billion Swiss francs (over Rs.30,500 crore) in 2021. These are only official figures reported by banks to the Swiss National Bank and do not indicate the quantum of the much-debated alleged black money held by Indians in Switzerland.

The fugitive economic offender Vijay Mallya was ordered to be extradited by the British judiciary in the year 2019; however, he is yet to be sent to India. Likewise, diamond merchant Nirav Modi has been held in custody at south London’s Wandsworth prison since he was arrested in 2019. In 2020, the Indian government informed the Lok Sabha that a total of 72 Indians charged with financial frauds are currently abroad and efforts are being made to bring them back to the country. Only two of the fugitives have been brought back to India so far.

Central Agencies Weaponised for Political Motives

A multi-party petition on the role of central agencies like the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) filed in the Supreme Court of India (SC) in March 2023 had noted openly that "political figures who have crossed over to the government side have mysteriously been given 'clean chits' or have seen investigative agencies go slow in proceedings against them… investigation/arrest or threat thereof by agencies of the Central Government has been weaponised as a tool to coerce a change in the political landscape of the country in favour of the ruling dispensation."

The anti-defection law in India has been severely criticised as the loopholes in this law are used to puncture the democratic fabric of duly elected governments. The controversial Electoral Bonds Scheme introduced by the Union government in 2018 was opposed by the Election Commission and the Reserve Bank of India. The law has been challenged in the SC on the ground that a quid pro quo is possible between the ruling party and the anonymous donor for favours bestowed. In effect, it can be a bribe in white.

Why Trial is Delayed Inordinately in Cases against Jagan?

The Supreme Court very recently issued notices to the CBI, Chief Minister YS Jagan Mohan Reddy, MP Vijay Sai Reddy and others who were named as accused in the cases registered by the CBI and ED over the allegations of amassing wealth through criminal conspiracy, quid pro quo transactions and money laundering. The trial of the cases has not begun even after ten years of filing the chargesheet. Jagan Mohan Reddy, the richest Chief Minister in India, has been on bail for over ten years. The SC directed the CBI to explain why it is taking so long to begin trial in cases registered against Jagan Mohan Reddy. This raises a larger and tougher question: Is it not a classic example of deliberate attempt of preventing the institutions from performing their essential functions leading to a mockery of democracy?

Breaking the Cycle of Failure

Broadly, the researchers (e.g. Jon S.T. Quah) identified the 'Five Mistakes' made by the political class at the helm responsible in combating corruption. These mistakes constitute the cycle of failure which must be broken to succeed in fighting corruption. The Five Mistakes are: 1.When countries rely on corrupt political leaders to minimise corruption; 2. Relying on corrupt police or investigative agencies to enquire into corruption cases of political leaders; 3. Relying on multiple anti-corruption agencies leading to lack of coordination and diffusion of anti-corruption efforts; 4. Using the investigative agency as an attack dog against political opponents; and 5. Creation of the investigative agency as a paper tiger, without the required powers and resources, to ensure its failure. The task of breaking this cycle of failure is extremely challenging and requires not only a strong measure of political will and capacity to minimise corruption, which is currently lacking in many countries, but also tremendous public support for a policy of zero tolerance for corruption to succeed.