Corruption
When democracy and market economy systems function side by side, it becomes almost impossible to control corruption.
The writer is Executive Editor of The Express Tribune
Both democracy and market economy are claimed by their respective champions as being relatively less imperfect systems than all other tried and tested systems of governance and economic management. But the most worrying aspect of these two almost perfect systems is that when they function side by side, it becomes almost impossible to control corruption.
Developed societies, which revere the two systems almost as if they were religious norms, have largely succeeded in keeping the unwanted side effect in the form of corruption under some control by giving full rein to a truly independent judiciary, a fearlessly free media and a genuinely powerful parliament.
These social controls make the governments accountable and thus keep corruption from becoming rampant. But even these controls have so far failed to completely eliminate corruption. That is perhaps, why in the US, the lobby system, which is clearly a corrupt practice, has been institutionalised and given the required legal cover. This is called legalised corruption.
The UK, which has signed the European convention on bribery, used what seemed to be legal means to stop an ongoing investigation into charges of bribery in a multibillion dollar aircraft deal with an oil-rich kingdom. This act of official abetment in such a high profile corruption case became the talk of the town in the UK during most of the 2007-2010 period. The British government did not seem to mind the scandal.
Some European countries are known to have sold deadly weapon systems to poor countries, which had no need for such weapons but agreed to buy them on being offered huge kickbacks to persons involved in approving the orders.
Donor countries are known to have approved ‘generous’ assistance to developing countries for projects, which the recipient countries did not need but approved in return for hefty kickbacks to the approving authorities. Most of these projects were thrust upon the recipients only to promote the donors’ domestic industries, shipping companies and consultancies, which together were meant to ensure the return of more than 99 per cent of the dollar aid back to the donor country in the form of inflated import bills.
Ironically, governments in developing countries which try to resist these shenanigans of the developed countries are, more often than not, dubbed corrupt, and using the so-called credibility and reliability of ‘foreign media’ are hounded out of power and are replaced with more pliable governments.
At some point in recent history, developed societies seemed to have sold their souls completely to the market and as a result, most political parties in these societies turned into handmaidens of big business. By 2008, it all came unstuck. And the respective governments in these developed societies were forced to use the taxpayers’ money to keep afloat many financial institutions, banks and large automobile companies, which had almost keeled over, thanks largely to market forces.
Governments in developed societies, trapped perhaps in a state of denial, continue to pump good public money into bad private sector entities just to prove that capitalism is not dead. All attempts on the part of these governments to regulate the economy, especially the financial sector, have been spurned dismissively by their banks and financial institutions.
Rich countries still have enormous assets to fall back on and their massive lead in technological developments, especially in information, telecom and nano technologies plus their control over the world’s energy reserves, are likely to help keep their economies from collapsing in the near or even perhaps, distant future, even if it is presumed that both the market and its mother, capitalism, are dead.
But developing countries like Pakistan, which practise democracy and market economy but do not possess strong enough social accountability controls, like an independent judiciary, a free press and a powerful parliament, are likely to face a more formidable challenge from the spectre of corruption.
That is perhaps, why when the banks’ spread went up to seven per cent during the Musharraf era and the service industry began enlarging its contribution to GDP, with the real economy (agriculture and manufacturing) stagnating, no one bothered to detect the financial bubble that was ballooning, as prices of real estate started galloping on the heels of files and share prices started jumping as everyone and his aunt started investing in stocks money borrowed from banks and losing.
Published in The Express Tribune, January 29th, 2014.
Developed societies, which revere the two systems almost as if they were religious norms, have largely succeeded in keeping the unwanted side effect in the form of corruption under some control by giving full rein to a truly independent judiciary, a fearlessly free media and a genuinely powerful parliament.
These social controls make the governments accountable and thus keep corruption from becoming rampant. But even these controls have so far failed to completely eliminate corruption. That is perhaps, why in the US, the lobby system, which is clearly a corrupt practice, has been institutionalised and given the required legal cover. This is called legalised corruption.
The UK, which has signed the European convention on bribery, used what seemed to be legal means to stop an ongoing investigation into charges of bribery in a multibillion dollar aircraft deal with an oil-rich kingdom. This act of official abetment in such a high profile corruption case became the talk of the town in the UK during most of the 2007-2010 period. The British government did not seem to mind the scandal.
Some European countries are known to have sold deadly weapon systems to poor countries, which had no need for such weapons but agreed to buy them on being offered huge kickbacks to persons involved in approving the orders.
Donor countries are known to have approved ‘generous’ assistance to developing countries for projects, which the recipient countries did not need but approved in return for hefty kickbacks to the approving authorities. Most of these projects were thrust upon the recipients only to promote the donors’ domestic industries, shipping companies and consultancies, which together were meant to ensure the return of more than 99 per cent of the dollar aid back to the donor country in the form of inflated import bills.
Ironically, governments in developing countries which try to resist these shenanigans of the developed countries are, more often than not, dubbed corrupt, and using the so-called credibility and reliability of ‘foreign media’ are hounded out of power and are replaced with more pliable governments.
At some point in recent history, developed societies seemed to have sold their souls completely to the market and as a result, most political parties in these societies turned into handmaidens of big business. By 2008, it all came unstuck. And the respective governments in these developed societies were forced to use the taxpayers’ money to keep afloat many financial institutions, banks and large automobile companies, which had almost keeled over, thanks largely to market forces.
Governments in developed societies, trapped perhaps in a state of denial, continue to pump good public money into bad private sector entities just to prove that capitalism is not dead. All attempts on the part of these governments to regulate the economy, especially the financial sector, have been spurned dismissively by their banks and financial institutions.
Rich countries still have enormous assets to fall back on and their massive lead in technological developments, especially in information, telecom and nano technologies plus their control over the world’s energy reserves, are likely to help keep their economies from collapsing in the near or even perhaps, distant future, even if it is presumed that both the market and its mother, capitalism, are dead.
But developing countries like Pakistan, which practise democracy and market economy but do not possess strong enough social accountability controls, like an independent judiciary, a free press and a powerful parliament, are likely to face a more formidable challenge from the spectre of corruption.
That is perhaps, why when the banks’ spread went up to seven per cent during the Musharraf era and the service industry began enlarging its contribution to GDP, with the real economy (agriculture and manufacturing) stagnating, no one bothered to detect the financial bubble that was ballooning, as prices of real estate started galloping on the heels of files and share prices started jumping as everyone and his aunt started investing in stocks money borrowed from banks and losing.
Published in The Express Tribune, January 29th, 2014.