Asit K. Biswas, Cecilia Tortajada and Bimal Pratap Shah
THE CONVERSATION | September 7, 2018
Corruption has existed since the Egyptian dynasty and still persists in almost every country around the globe.
After huge corruption scandals in Malaysia and Brazil, Indonesia has just witnessed one of its regions losing more than 90% of its councillors as they are implicated in graft cases.
Looking through history, corruption seems inevitable.
OLD MYTHS ON CORRUPTION
The Oxford Dictionary defines corruption as “dishonest or fraudulent conduct by those in power, typically involving bribery”.
Corruption originates from a Latin word: corruptus. The word is the past participle of corrumpere, meaning “mar, bribe, destroy”.
Corruption is as old as human history. The First Dynasty (3100–2700 BC) of ancient Egypt noted corruption in its judiciary.
The practice also existed in ancient China. In Chinese mythology, every household has a Kitchen God who watches the behavior of its members. A week before Chinese New Year, the Kitchen God ascends to heaven to present his annual report to the Ruler of Heaven, the Jade Emperor.
The fate of the household, whether this be reward or punishment, depends on this report. In an attempt to ensure a good report, many households smear a cake of sugar and honey onto the picture of the Kitchen God they keep in their homes before burning the image, which in Chinese mythology is how the Kitchen God can ascend to heaven to meet the Jade Emperor.
In a similar vein, Greek historian Herodotus notes the Alcmaeonid family bribed the Oracle of Delphi priestesses, one of the most powerful mystical forces of ancient Greek. Dating back to 1400 BC, people all over Greece and beyond came to have their questions answered by the Pythia, high priestess of Apollo. The wealthy Alcmaeonid family offered to lavishly rebuild the Temple of Apollo with “Parian marble” after it had been destroyed by an earthquake. In return, Pythia convinced the nation-state Sparta to help the family to conquer and rule Athens. Since it worked, Aristotle noted even gods can be bribed!
CORRUPTIONS AROUND THE GLOBE
As the global economy expanded significantly during the 20th century, levels of corruption increased as well. It is difficult to estimate the global magnitude and extent of corruption since these activities are carried out in secret.
The World Bank estimates international bribery exceeds US$1.5 trillion annually, or 2% of global GDP and ten times more than total global aid funds. Other estimates are higher at 2-5% of global GDP.
Corruption permeates all levels of society from low-level public servants accepting petty bribes to national leaders stealing millions of dollars.
Transparency International estimates Indonesia’s former president Suharto siphoned off anywhere from $15 billion to $35 billion. The Philippines’ Ferdinand Marcos, Mobutu Sese Seko of Zaire and Sani Abacha of Nigeria may have embezzled $5 billion each.
Brazil’s greatest corruption scandal, codenamed Lava Jato (carwash), unearthed a vast and extraordinarily complex web of corruption. Directors of Petrobras, Brazil’s national oil company, used a slush fund to pay politicians who had appointed them to support the election campaigns of the governing coalition.
Lava Jato ensnared politicians and business leaders from 11 countries, ranging from Brazil to Peru. It sidelined Brazil’s most popular resident, Luiz Inácio Lula da Silva, now serving a 12-year prison sentence. The case forced the Peruvian president, Pedro Pablo Kuczynski, to resign when confronted with an impeachment vote.
Another major recent corruption case is in Malaysia. Former prime minister Najib Razak is being investigated for misappropriation from the Malaysian strategic company, 1Malaysia Development Berhad (1MDB), which he chaired. The US Department of Justice has alleged $4.5 billion was misappropriated from 1MDB. The lawsuit has referred to Najib as “Malaysian Official 1”, who is alleged to have received more than $1 billion in 1MDB funds. Najib, who was accused of using some of the money to buy jewellery for his wife, has denied any wrongdoing.
Corruption cases involving national leaders are not unique. In 2015, President Otto Pérez Molina of Guatemala was forced to resign after Congress stripped him of immunity because of his alleged role in a huge corruption scheme involving its national customs service.
In South Africa, the ruling African National Congress this year sacked President Jacob Zuma, who has been charged with corruption.
In 2017, South Korea impeached its president, Park Geun-hye, for bribery and other charges. In 2018, she was convicted of abuse of power, coercion and bribery and jailed for 24 years.
CORRUPTION AS A WAY OF LIFE
Corruption has become a way of life in numerous countries. In 2011, Transparency International (TI) reported that two-thirds of Bangladeshis and well over half of Indians had paid a bribe during the preceding 12 months.
In 2017, it further reported that globally one in four people had paid bribes in the previous 12 months to access a public service. Nearly 57% of people around the world felt their governments were doing badly to fight corruption. Only 30% thought their governments were doing well.
Another TI study in 2017 showed globally around one-third of people consider their presidents, prime ministers, national and local government officials, business executives, elected representatives and police officers corrupt.
Police officers are seen to be most corrupt in Sub-Saharan Africa (47%) and Asia Pacific (39%). This is a damaging indictment of the extent and magnitude of global corruption perceptions in this age of Homo corruptus (very spoiled and marred persons).
Corruption severely constrains poverty alleviation and economic development. In 2017, nearly 10% of Asians, around 400 million, lived in extreme poverty. Corruption siphons off funds intended for poverty alleviation.
Countries like Bangladesh, China, India, Indonesia, Malaysia, Nepal, Thailand and the Philippines all face pervasive corruption problems.
If developing countries can control corruption and enforce the rule of law, the World Bank estimates per capita income could increase fourfold over the long term. On average, the business sector could grow 3% faster. Corruption is also a de facto tax on foreign direct investments, amounting to around 20%.
Controlling corruption can improve many socio-economic indicators, including reducing infant mortality rate by 75%.
WHAT WE CAN DO?
International financial systems have made it possible for public officials to hide their ill-gotten wealth in tax havens. In 2014, the Panama Papers leaked 11.5 million files. These showed that two national leaders among 143 politicians, their families and close associates from all over the world were using offshore tax havens to hide their wealth.
Similarly, the Paradise Papers leaked 13.4 million files from two different offshore service providers and 19 tax haven company registries. It revealed offshore activities of more than 120 politicians and world leaders as well as financial engineering of more than 100 multinational corporations.
Controlling corruption requires strengthening institutions and promptly upholding the rules of law as some countries like Singapore have shown.
Singapore’s late prime minister, Lee Kuan Yew, recounted that corruption was commonplace in the civil service during colonial times. When his party came to power, its leaders enshrined anti-corruption as a development priority since it was considered a prerequisite for good governance. Even then, Keppel Offshore and Marine, a unit of conglomerate Keppel Corporation of Singapore, paid a staggering fine of $422 million to US, Brazilian and Singaporean authorities for paying bribes of $55 million to Petrobras and Sete Brasil. The bribes were paid between 2001 and 2014 to win 13 contracts.
President Xi Jinping of China has declared a war on corruption, which has targeted both “tigers and flies”, a reference to senior and low-ranking officials. Many powerful Chinese politicians and bureaucrats, who were previously considered untouchable, are now in jail because of corruption.
In India, virtually no major political leader has been jailed for serious corruption. This has given many powerful politicians and senior bureaucrats a licence to steal. A 2017 TI report noted nearly 70% of Indians who accessed a public service had to pay a bribe.
A silver lining is that over half of Indians now are positive about the government’s efforts to combat bribery. However, more than 40% felt corruption had increased over the preceding 12 months.
Developed countries are not immune to corruption either. The latest high-profile example is US President Trump’s campaign manager, Paul Manafort. He has been indicted on eight tax and bank fraud charges, with more charges yet to be judged. Trump’s personal lawyer, Michael Cohen, has pleaded guilty to eight violations of banking, tax and campaign finance laws. These may prove to be the tip of the iceberg.
Gandhi said: “The world has enough for everyone’s need, but not enough for everyone’s greed.”
As the world’s economy expands, the potential for corruption increases as well.
Corruption can never be eliminated. Whether we like it or not, it has always been a part of human nature and will continue to infect society. As the age of Homo corruptus continues, the best any country can do is to keep it to a minimum.
Asit K. Biswas, Distinguished Visiting Professor, Lee Kuan Yew School of Public Policy, National University of Singapore. Cecilia Tortajada, Senior Research Fellow, Lee Kuan Yew School of Public Policy, National University of Singapore. Bimal Pratap Shah, an independent consultant from Kathmandu, Nepal, contributed to this article.
This article was first published by THE CONVERSATION, September 7, 2018.