Costs of corruption (Part-I)

Author: Syed Shahabuddin

Corruption is prevalent in developing and developed countries. The evil robs people of their wealth, dignity, and life. Unfortunately, corruption is happening openly in many countries, including the United States of America. Regardless of religion, region, and economic status, human greed is the cause of corruption. Some countries have laws that are strongly enforced against corruption. Those countries have limited corruption, but it still exists. Many developing have corruption laws that are rarely enforced, if at all. Therefore, corruption takes place openly and without punishment. The questions one should ask are, “What is corruption?” and “How much does it cost society?”

Corruption has many definitions, such as the one at cleangovbiz.org: “Corruption is the abuse of public or private office for personal gain. It includes acts of bribery, embezzlement, nepotism, or state capture. It is often associated with and reinforced by other illegal practices, such as bid rigging, fraud, or money laundering.” Regardless of whose definition one uses, the implication is clear: taking the money or resources of one’s stakeholders for one’s personal benefit. A corrupt person is a thief, a crook, and a robber. Like thieves, they should be in jail. Obviously, a corrupt person might say, “I do not use a gun to take the money. People give it to me willingly.” However, they use the worst methods of intimidation to extract money. They refuse to do their job of helping citizens, for which they are hired and paid a decent salary, instead extorting citizens for bribes before performing their regular job. They are worse than thieves, robbers, and crooks.

A 2017 survey from Transparency International, which included responses from 162,136 adults, showed that 25 percent of people worldwide said they had to pay a bribe to access public services in the past 12 months. Perhaps unsurprisingly, 57 percent of people said their government was doing “badly” at fighting corruption. The survey also found that people believe that police (36 percent), elected officials (36 percent), and government officials (36 percent) were ranked as the most corrupt groups.

The failure of people not to pay their fair share of taxes is a tremendous loss to the entire society. Transparency International estimates that Palestine loses $800 million due to tax evasion

Cleangovbiz.org states, “Corruption is one of the main obstacles to sustainable economic, political and social development, for developing, emerging and developed economies alike. Overall, corruption reduces efficiency and increases inequality. Estimates show that the cost of corruption equals more than 5% of global GDP (US$ 2.6 trillion, World Economic Forum) with over US$ 1 trillion paid in bribes each year (World Bank).” However, the annual costs of international corruption amount to a staggering $3.6 trillion in the form of bribes and stolen money, United Nations Secretary-General AntónioGuterres said on International Anti-Corruption Day, December 9, 2018, “It is not only a question of ethics; we cannot afford such waste.” This means that countries with open corruption could be losing 3 to 5 percent of GDP per year, causing poverty, deficit, and debt. Only corrupt people benefit at the cost of society.

Cleangovbiz.org lists the variety of corruption costs to society: it increases the cost of doing business; leads to waste and inefficient use of resources; excludes poor people from public services; perpetuates poverty; corrodes public trust; undermines the rule of law; delegitimizes the state; and sets bad examples for children of dishonesty, laziness, and immorality. The U.N. website states, “[Corruption] contributes to instability, poverty and is a dominant factor driving fragile countries towards state failure.” In addition, in many corrupt countries, taxpayers do not pay their share of income tax because most feel that if they are caught, they can pay a bribe to either not pays any taxes or to pay the minimum amount. The failure of people not to pay their fair share of taxes is a tremendous loss to the entire society. Transparency International estimates that Palestine loses $800 million due to tax evasion.

In 2017, Transparency International ranked Pakistan 117th out of 180 countries. Pakistan has had a problem with corruption since 1947 when it came into being. The change in regimes between military and civilian institutions have also weakened the anti-corruption institutions. Regardless of these changes in government, no significant improvement in corruption has occurred. Many corrupt officials have been caught, but their cases are still pending for over 20 years due to a corrupt judiciary.

The website ganintegrity.com states, “Corruption is a significant obstacle to business in Pakistan, and companies should expect to encounter bribery or other corrupt practices regularly. Corruption is rampant in all sectors and institutions. The Pakistani Penal Code applies to individuals and makes it illegal to offer, pay, or accept a bribe. Companies can be held civilly liable under the Prevention of Corruption Act and the National Accountability Ordinance. Facilitation payments and gifts are prohibited but are common practice … Pakistan is unable to guarantee integrity in state bodies and is unable to prevent corruption despite a sound legal framework. The government didn’t implement anti-corruption laws effectively, and officials engaged in corruption with impunity.”

Judiciary is accused of making favorable decisions for receiving bribes. According to a survey, 40 percent of Pakistanis consider the judiciary corrupt. Sixty-six percent of Pakistanis report paying bribes in dealing with courts. The judiciary is considered corrupt, ineffective, and inefficient. The lower level of the judiciary suffers from nepotism and is subject to influence and corruption. The retired Chief Justice Iftikhar overreached and made the judiciary inefficient and ineffective; it is considered a failed institution bent on destroying Pakistan.

Pakistan’s police are considered very corrupt. Most often, they do not protect businesses from crime and violence. Seventy-five percent of Pakistanis believe most or all of the police are corrupt, and the same number of Pakistanis who have encountered the police in the past year reports paying a bribe. Failure to punish abuses has contributed to widespread impunity. Police and prison officials frequently extort money from prisoners and their families. This problem is the result of untrained, unqualified, culturally dishonest, and incompetent leadership.

The writer is PhD (USA), Professor Emeritus (USA)

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