Daily Times

Corruption is not an issue of the poor. Corruption is also present in developed countries so it could mean that it does not hinder development. Corruption has nothing to do with the social development indicators. These are some of the arguments given by the intelligentsia as proofs that a pudding does not necessarily become bad because it has some rotten ingredients. Analysts of this school of thought go into painstaking details blaming people who talk about corruption for not talking about the real issues of the poor: lack of water, electricity, inflation etc. They also claim that having a debate on corruption in parliament and media is a terrible disservice to the common man who has sent these representatives to solve their day-to-day problems. This argument itself is intellectual corruption. It is an argument that tries to exploit ignorant minds with superficial claims.

This perhaps tells the story of why the developed countries knowing that corruption is the most dangerous cancer curtail it and counter it aggressively, and why underdeveloped countries treat it as just one more issue that is important but not urgent. The developed countries have an educated population that understands the direct link of corruption on every aspect of a citizen’s life, while in the underdeveloped countries by corrupting public policy and ensuring illiteracy this danger is never really tackled with the emergency it needs to be dealt with. The more underdeveloped the mind of the citizens, the more underdeveloped the country. Corruption ensures the spread of this cancerous cell that destroys education, health, industry, jobs and service delivery in such a manner that by the time its linkage is determined it is too late. Pakistan and many other developing countries face this grave situation where corruption becomes a norm that is accepted and not tackled. However, nearly every research shows that corruption is the foundation of poverty and injustice.

The World Competitiveness Report for 2016 published by the World Bank has shown Pakistan slip down the ranking to 126th position amongst 140 economies. Corruption has been cited as the number one reason for becoming uncompetitive. Dr Shahid Hassan Siddiqui, a prominent economist and analyst, has said that due to corruption, bad governance, nepotism, violation of rules and royal expenses of rulers, Pakistan is suffering a loss of 3,000 billion rupees every year and due to low capacity recovery of taxes the country sustains loss of another 5,000 billion rupees a year. Hence, Pakistan suffers a loss of 8,000 billion rupees every year, which means corruption of 22 billion rupees a day.

The poverty figures released by the government show 39 percent people in Pakistan live below the poverty line, which is a huge jump from 29 percent quoted in the previous years. Corruption and poverty, unfortunately, go hand-in-hand, threatening lives of too many people. In underdeveloped countries the poor have to pay bribes to get essential services like health and water, and the toll of that can be horrifying. Eight times more women die having children in places where more than 60 percent of people report paying bribes compared to countries where bribery rates are less than 30 percent. In a city like Karachi that is supposed to be a commercial hub, water-tanker mafias have turned it into hell for the poor. The socioeconomic effects of corruption are catastrophic. Corruption leaves children without mothers, families without healthcare, people without water and food, the elderly without security, and businesses without capital.

Corruption impedes economic growth. As cost of business increases due to the bribery practice to get even legitimate transactions through, foreign and domestic investment is severely affected. For three years running the foreign investment has failed to achieve the target and so has exports. Energy costs have crippled industrial development. Energy costs are high despite the lowest price of oil in the world. The major reason again is corruption. According to a rough estimate, corruption in the energy sector — including theft and line losses — has cost the economy approximately 100 billion rupees in the past five years. These acts of pilferage have turned into a massive circular debt, leading to acute energy shortages and high tariffs. Circular debt of 480 billion rupees was settled by the government without a pre-audit, and the auditor general’s report has alleged grave violation of rules, embezzlement and fraud. As this scam was never pursued it has led to a record increase of 600 billion rupees as circular debt, which in turn will make the government impose even more taxes making exports and production unviable. This will lead to factories being closed and to unemployment, which in turn causes more and more marginalised households.

Corruption causes inequality. Corruption acts as a regressive tax where the rich with their money and connections create a monopoly of resources and comforts. They use their influence and deep pockets to infiltrate tax structures, gaining tax exemptions and thus creating revenue shortfalls for the government. To make up for these shortfalls the government then imposes all kinds of indirect taxes on the poor who have no choice but to pay. Pakistan’s tax to GDP ratio is barely 10 percent, and thus to improve it the government instead of broadening the tax net keeps on punishing the masses with taxes that are inescapable. That is why there is huge resentment against paying taxes, and despite many tax amnesty schemes tax evasion keeps on increasing.

The financial and socioeconomic loss of corruption is devastating, but the biggest loss is when corruption fails to register as the king of crimes and the root cause of what ails a society or the common man. This is where those who are corrupt have made the most gains in a society. They have clearly banked this strategy on two pillars. One is that if we are corrupt prove it, and secondly if we are corrupt so is everybody else. The first part of proving corruption is very difficult because of organisations like NAB, which itself is led by people who have corruption cases against them. And secondly, since most alternatives to the current rulers have also been involved in corruption it creates this cycle of hopelessness in the public where they feel all are corrupt so a known evil is better than an unknown evil.

The Panama Leaks scandal is a great example of how most analysts have already written it off as a futile exercise. The greatest challenge thus is to fight this thought process that has been carefully established to make people doubt their own capacity to fight years of entrenched corruption. For that to happen an unrelenting debate and focus is required to make the masses understand that if one ordinary person’s life has to change each ordinary person has to make an extraordinary effort to fight this evil, and fight it with more passion than many other evils. As Karl Kraus says “Corruption is worse than prostitution. The latter may endanger the morals of an individual, the former invariably endangers the morals of the entire country”.

The writer is a columnist and analyst and can be reached at andleeb.abbas1@gmail.com