Friday, 8 May 2009

A Panorama of Corruption in Developing Countries

Corruption is a worldwide phenomenon. Developed countries do have lesser corruption within, than developing countries, but they do indulge in corrupt practices while marketing their defence equipment or other mega deals with developing countries. In developing countries, people face corrupt practices at every step: adulterated milk, adulterated vegetables and oils; bribe to get water or electric connection, bribe or underhand donation for admission in schools, and colleges; brokers to get driving licence, registration of vehicles; corruption in police cadres who check: goods transport vehicles service industry, and security and safety of women. The corruption industry is rampant,when ever one needs an approval or licence to set up any services or industry. But now there is awareness among people in developing countries against corruption. What are the specific corrupt practices in developing countries?

Donate in temples to launder the bad money

1. In India, a devotee can donate any amount in a temple without disclosing his name. Donations to temples have no limits. The rich temples do get 100 million US dollars every year, in offerings. It is devotion to God.

* But, isn't this an impropriety towards God, if the big money donated is black money. Unfortunately, the devotees, who are reluctant to pay social taxes, they donate happily towards religious activity. When illegal money is donated for temple construction, or missionary purposes, it is laundered money. Do we honour God, by offering black money?

Creativity in dishonest dealing

2. To do honest dealings is no big deal. There is no creativity. To tell truth needs no creativity. To lie convincingly is an art. An evil art! To do corruption is an art. A corrupt person convinces the victim of his best intentions to help. But in the long chain of officials in the department, he is a small fry and unable to change the existing practices. The victim gratefully gives the money and his job is done.

3. A historical corruption story. 500 years ago, there was a notorious corrupt official in India, working for King Akbar. The King posted him in a town, near the sea. He was given a job, where he was unlikely to make extra money, by corrupt practices. His job was to count number of waves hitting the shore everyday and keep a record. The king was happy that he has out-smarted the corrupt official. But he was wrong.

* The official was corrupt and creative. He found out a way to make money. During the day, when he was counting the number of waves, he would not allow fishing boats to ply in the area, on the pretext that boats could affect the number of waves. People offered him money - for they had to catch fish for living - which he accepted. He continued enjoying his corrupt money.

Corruption techniques

3. A creative corrupt person has many tricks up his sleeves. Any financial transaction involves two parameters: number of purchased quantity or sold, and price, which depends upon quality. He can manipulate the deal: variation in quantity and quality of ordered and received stores. There are endless avenues for corruption, in every transaction, service, or activity.

(a) Underpricing exports. An exporter would under-price, his products in the invoice and ask his clients abroad, to deposit the balance in his account in a foreign country. Switzerland was the favourite heaven, in this regard as it ensured secrecy. This option is under strict analysis by many governments. US and India have pressurised Switzerland to inform them, the names of secret bank-account holders - to check money laundering.

(b) Manipulating the quality of product supplied. In 1971, an Indian official had to procure 10000 sarees for Bangladesh refugee-ladies living in a camp in India. Price of a white saree was Rs 10, and a color saree was Rs 12. He bought 5000 white sarees and 5000 color sarees as per invoice, but asked for delivery of all white sarees. The deal saved Rs 10000 for the businessman, who happily shared 50% with the official, who had suggested the idea. The business man later deposited Rs 1000 in the temple for God. He justified his unlawful deal by thinking: 'If I had not accepted his proposal, somebody else would have obliged, and I would have lost my client for ever'.

(c) Tampered weights, and magnets. A fruit/vegetable seller in a small city or rural area in Oriental countries, uses: either a magnet underneath one of the pans of traditional balances - obsolete in Western countries; or he uses tampered weights to cheat the customers. Electronic weighing machines have curbed this evil, to some extent, where ever these are used, but soon the corrupt, creative minds will find a way out.

(d) Endless trips to an office for want of proper information. People go to an office to get identification papers, driving licence, and property mutation documents etc. They are not sure of the procedure. When a person buys s property, it may take years to get the property transferred in his name. There are agents, who in collaboration with the officials exploit the situation. They are all deeply religious persons, but they happily accept a facilitating monetary tip.

(e) Maintenance corruption. It is the easiest and safest way to make a quick buck. The corrupt officials and contractors in connivance with each other, receive a payment for a maintenance job, which was never done - repair of roads, street lights maintenance, regular cleaning of roads and public utility buildings..

(f) Transportation corruption. The drivers of goods-trucks overload the commercial vehicles, pick up people en route illegally, and may take unauthorised goods, for some extra money. The traffic police is on the look out and demand their pound of flesh. In 1980, at each major road-crossing, the driver was expected to give Rs 10, 20 or 30 - depending upon the rank of checking police official. The present rates would be much higher.

4. Things are changing

* The RTAs - Regional Transport Authority - are responsible for registration of vehicles and issuing driving licence. In the past agents had a major share in all the transactions.They pocketed hefty commissions for services rendered and gave a share to RTA staff, as well. Now the RTA offices display list of documents required for different jobs and the job is easily done. As a result, the flourishing business of agents has gone down.

* There is awareness in developing countries regarding ill effects of corruption. They know that Scandinavian countries, are free from corruption. People are aware that for a country to develop, it has to be corruption free.

5. How to confirm if dealings are honest?

There is a method. Whatever you do, imagine it is reported in a newspaper, if it causes you embarrassment, it is not an honest deal.

* There is a classic example of a British officer, who was posted to India prior to independence. He had 2 sets of candles at home: first set for doing office work at home, purchased with official funds and second set for doing personal work at home, which was purchased with personal money. We need more such people these days.

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