Corruption – A Curse

At length corruptio11, like a ge11eral flood (So long by watchful ministers withstood), Shall deluge all; and avarice, creeping on, Spread like a /ow-born mist, and blot the sun. “–Alexander Pope

“It is said that power corrupts. But actually, power attracts the corruptible. The same are usually attracted by other things than power. ” -David Brin

Corruption in Pakistan is declining, as Transparency International Berlin released its annual global report in 2015, showing Pakistan further improving its ranking from the 50th most corrupt country in 2014 to 53rd in 2015. The political will of the government to fight corruption is lacking, which has resulted in the Supreme Court of Pakistan taking suo moto action against mega corruption in NICL, Pakistan Steel, and Rental Power Plants. The CPI 2010 reveals that corruption in Pakistan is increasing, while in Bangladesh, it is decreasing. Bangladesh was perceived to be the most corrupt country in 2001, 2002, and 2003, and its ranking in 2010 is the 39th most corrupt country. Reduced corruption has paid dividends to Bangladesh, whose annual GDP growth last year was over 5%, while Pakistan’s GDP growth was nearly 2.4 %. A delay in the formation of an Independent Accountability Commission by the parliament may further aggravate the situation.

The word “Corruption” has its origin in the Latin verb “corruptus,” meaning “to break”.  It means “a broken object.” In simple words, corruption means “the misuse of entrusted power for private benefit.” Conceptually, corruption is a form of behavior that departs from ethics, morality, tradition, law, and civic virtue. The term corruption has various definitions. The United Nations Manual on Anti-Corruption, Transparency International, and multilateral financial institutions like the World Bank and Asian Development Bank defines corruption as “abuse of public office for private gains.” The National Anti-Corruption Strategy (NACS) has defined corruption as “a behavior on the part of office holders in the public or private sector whereby they improperly and unlawfully enrich themselves and those close to them, or induce others to do so, by misusing the position in which they are placed.”

Section 9 of the National Accountability Ordinance 1999 has comprehensively defined corruption and corrupt practices. It has enlisted about twelve different shades of corruption. Legal gratifications, bribery, extortion, abuse of office, fraud, cheating, and criminal breach of trust are some of the corrupt practices mentioned in the NAO 1999 (Annex A). Starting with the Prevention of Corruption Act 1947, about sixty pieces of enactments and rules deal with corruption offenses and corrupt practices in Pakistan (Annex B). The most comprehensive definition of “corruption” can be found at the website of the Global Infrastructure Anti-Corruption Center (GIACC) http://www.giaccentre.org. It says, “In its wider sense, corruption includes one or more of

bribery, extortion, fraud, deception, collusion, cartels, abuse of power, embezzlement, trading in influence, and money laundering.”

The primary responsibility of ensuring the culture of sound management, or what we generally call good governance, lies directly on the shoulders of the civil administration. In a democratic dispensation, accountability starts at the first stage of the “conversion process” – the elections, which is the connecting link between the rulers and the ruled. At this stage, the foundation of sound and transparent political culture could be laid. The electorate ought to carefully demonstrate their first choice (right to vote) of the process and to exercise their right only under the dictates of their conscience. In return, the rulers who are the custodians of the political environs ought to honor the trust reposed in them and to judiciously exercise the powers they derive from that trust.

To ensure consistency and sustainability of an accountable, transparent, and open political process, it is imperative to keep the connecting link intact.

Corruption is more prevalent because of a lack of accountability and regulation. Suppose the money that the government receives is going into their pockets rather than being spent on the people who need it, on their education, health, and so on. In that case, the consequences are obvious that many people do not pay taxes because they do not trust the government to spend it on the people, they think they are corrupt, and the money would disappear. And so this creates a vicious circle. People do not see the government doing anything to help them, so they think it’s a waste of time to pay taxes. The government doesn’t get any money from taxes, so it can’t do anything to help people.

Across the board, the application of the rule of law, merit-based appointments, and easy access to justice is the only solution to save Pakistan from corruption, which is responsible for poverty, inflation, terrorism, illiteracy, lack of electricity, and hoarding essential food commodities.

The major reasons for fast-creeping corruption are political instability, poverty, unequal structure of society, unemployment, lack of accountability, weak political institutions, and absence of the rule of law. As a result, they affect political stability, equal distribution of resources and power, and confidence of local and foreign investors and political institutions.

The basic reason for corruption is low salaries as everyone is finding a way to better their living standard as much as they can; it’s also human nature that he has everything more and more. So, corruption is mostly seen in people with lower salaries who use corrupt ways to achieve their goals. Indeed, they are the only way to fulfill their wants.

An incompetent judiciary in terms of not bringing the culprits into the gallows of law and the absence of bringing corrupt politicians and policymakers to the books is another decisive factor in today’s sorry state of affairs. In the same manner, the unnecessary delay in deciding the cases of corruption clearly explains the adage: the justice delayed is justice denied.

On independence, Pakistan inherited weak political institutions. The performance of these institutions in the country over the years further damaged the culture of transparency and accountability. Admittedly, efforts at establishing a strong political dispensation have faced frustrations head-on, but these institutions still need to capitalize upon the available opportunities. Their internal democratic traditions are still weak and non-transparent. Due to a lack of respect for participative values, a single person generally dominates the mainstream political parties.

The menace of corruption has links to a multitude of vices. Its roots are linked to injustice,

mistrust, suspicion, extremism, and terrorist activities. It creates a sense of insecurity, exacerbates

poverty, and adds to the misfortune of the vulnerable segments of society. It also instills a sense of hopelessness and despair and threatens the strength of good values established over centuries of civilized struggle. The corporate sector is also littered with failures due to corrupt practices. Scandals in the

corporate sector are subjects of headlines in the media. Wrong practices seem too common, and

unacceptable behavior has become a normal practice. Corporate governance has been practiced only in form rather than substance. Chairmen, chief executive officers, and directors are appointed based on political and personal clout. Merit is a less visible commodity. Thus, politicization and inefficiency at the top management levels have resulted in a steep decline in output quality. Illegal convergence of interest has encouraged insider trading, which causes frustration and setbacks for genuine investors. Real demand and supply factors have a negligible role in shaping market behavior, which the middleman predominantly controls. Unscrupulous profiteers determine prices through the middleman mafia. Counterfeit products have flooded the markets. Consumers are left with no option but to live with inferior quality stuff. There needs to be an effective consumer rights protection regime. The monopoly control mechanism has been the least effective. The Monopoly Control Authority has to be improved to curb the menace that has infected the corporate sector effectively.

Need and greed are cited as the reasons for corruption and corrupt practices. Need as a reason is applied to low-paid employees, especially those entrusted with service delivery powers and public contact. Corruption occurs out of compulsion, as those indulging in corruption need basic necessities and lack access to social entitlement. However, need easily merges with greed once need is justified by those indulging in corruption and corrupt practices. Because of this, corruption is linked to poverty, which is treated as a corruption of need. The absence of an ethical base in societal attitudes is also cited as one of the root causes of corruption.

Corruption and corrupt practices are indicative of breaches in the governance edifice. They threaten the sanctity of ethical and democratic values and weaken administrative, political, and social institutions. The issues of corruption, poverty, and governance are cross-cutting. These issues are assembled and form an integral part of the development literature. Recently, the terms governance and good governance have been profusely used in such literature. Good governance remains at the forefront of every aspect of our life, whether political, social, or economic. Governance has to be good in its manifestation; if it is not, there is certainly no governance. The term ‘good’ suffix or prefix does not serve the purpose.

The essential components of good governance are the rule of law, accountability, transparency, and predictability. The rule of law means the equal application of the law, equal protection by law, and equality before the law. Without the rule of law, institutions get weak and become incubators for corrupt practices. The realization of the goals of good governance and prosperity becomes a myth.

According to the findings of the National Anti-Corruption Strategy and the National Corruption Perception Survey 2006 carried out by Transparency International, the major causes of corruption in Pakistan are as follows:

• Lack of effective Internal accountability mechanism
• Discretionary powers and their flagrant abuse by public officeholders
• Absence of and weakness of the watch-dog agencies
• Elected government’s perpetual failure to develop proper ethical and business standards for the public and private sector
• Political leaders’ incompetence and betrayal of public trust with a penchant for self-enrichment
• Lack of transparency in the government’s decision-making process
• Lengthy and cumbersome procedures in the executive system
• Weaknesses in the judicial system
• The illiterate, apathetic, or ignorant populace with inadequate discernment of political choices
• Power of influential people
• Inadequate wage envelope

Many people in Pakistan believe that much of the development and a significant portion of the operations allocations are lost due to bribery and other illegal and unethical activities. The extreme poverty and lack of infrastructure and basic services in the rural areas of Sindh and Balochistan is in part fueled by bribery, influence peddling, extortion, and abuse of power. The people of Pakistan and the international donors must rise to the occasion and start pressuring the Pakistan government to curtail corruption and improve governance. Failure to do so promptly will continue to frustrate poor people, make them weary of the current democratic system, and drive them to extremism.

There are many examples of corruption. A government official or government minister or their business partner receives money in exchange for awarding a contract, job, promotion, or approval of invoices for payment (an example that involves Bribery and Abuse of Power and may involve Collusion). A policeman receiving money to drop charges against someone or receiving a bribe from someone to arrest another person is an example of bribery and misuse of power.

A contractor who uses sub-standard material in constructing a large public project such as a university building, a road by-pass, or a village road. An inspecting engineer who receives a bribe to ignore the use of defective material and artistry and approves the project for payment. A senior manager in a public or private organization giving a job to a friend or relative bypassing a proper selection process is an example that involves Abuse of Power and trading in influence.

A teacher who rarely goes to school to teach but collects their salary regularly. A bad village leader (waders)illegally occupies a school and uses it as a guest house is an example that involves Bribery, Abuse of Power, Fraud, Deception, and Collusion.

General perceptions and actual public surveys about corruption show that the Police, Power Sector, Judiciary, various Taxation departments (Customs duties, Income Tax), and irrigation departments are considered the most corruption-prone departments in Pakistan.

According to a report, appointments in the police force are often based on political considerations. There are numerous instances where conflicts of interest due to personal loyalties and family connections exist. Many complain that local landlords or urban groups with police support exploit poor people through extortion (bogus fines, etc.).

Some important areas affected by it are discussed as follows:

1. The World Economic Forum’s Global Competitiveness Report (2007-08) identifies corruption as the 3rd greatest problem for companies doing business in Pakistan after government bureaucracy and poor infrastructure (Sala-i-Martin and Porter, 2008). It is, therefore, a direct impediment to the way of direct foreign investment (OF!), which is so badly needed to generate economic activity, create employment, and support the dwindling foreign exchange reserves.
2. With an effective check on corruption, the national exchequer can easily gain nearly double the annual allocations earmarked under the Kerry Lugar Bill, carrying strikingly harsh conditions for national sovereignty and autonomy.
3. The cycle is really vicious: rampant corruption in tax and customs and excise collection, WAPDA dues, costly public sector purchases, and inefficient major public sector entities like PIA, Railway, Steel Mill, etc. cause a major deficit for the government every year term of resource generation and expenditure that makes the government borrow from IMF and other foreign and domestic resources which through increased debt repayments broadens the gap and compels the government to increase the price of the utilities like electricity, gas, CNG and petroleum. That takes a heavy toll on the people of Pakistan. Result, corruption, which is done far away and in much higher places from the common citizens, has a direct and deep impact on their lives. Thus, acts of corruption, whether direct or indirect, close or remote, are not innocuous to the commoner.
4. The country has lost many years of development effort because of the excessive use of development funds on a very large scale and because of overcharging for almost every item of work.
5. Other than the government offices and the public sector, corruption has thoroughly permeated the political arenas. Party tickets are openly bought and sold, and so does the transaction flourish for hunting or hounding the voters. This has resulted in the dominance of the political scene by the drug barons, black marketers, hoarders, and speculators who not only have, in many cases, snatched away the true representative character from the democratic process in the country but who make good their investment in the election process through massive corruption while in power and add to the miseries and the cost of living of the commoner.
6. Still worse is its impact on religious circles, selling fake degrees to needy politicians with impunity, showing fake entries of students to get more Zakat money, and selling religious edicts on a need basis. At times, the whole structure has been soiled and has replaced scholarship, as it is becoming increasingly difficult to find a genuine religious scholar from any quarter.
7. Rampant trends of corruption have also badly affected the business ethics in the country, which is devoid of any egalitarianism. Hoodwinking the regulators, stockpiling, hoarding, and black marketing are the Orders of the day, and individual business people, business firms, business groups, and sometimes a whole industry are found pegged in these malpractices.
8. And when corruption affects the institution of the last resort, that is, the judiciary, the country loses its track and direction. The absence of a fair judicial system does not affect the individual litigant alone. It affects the whole economy, where domestic and foreign investments shy away for fear of usurpation and misappropriation.
9. The worst of all is a breakdown of law and Order because of pervasive corruption in the police and lower judiciary. The influential, the wealthy, and the mighty have a fair chance of getting away with whatever they do if they pay the right price at the right stage. This has led to an increased incidence of crimes of all nature and at all levels.
10. In short, unbridled corruption has negatively impacted all spheres of activity in the country, and the whole society has suffered serious blows to its social fabric and working environment.

Most experts think that corruption is one of the most difficult problems in Pakistan’s society. Its impact on the country’s towns and villages is extremely profound and poses lo~ a long-term threat to its culture, economics, and general well-being of provinces such as Sindh. The following are some of the steps and methods at grassroots and government levels that have helped to curb corruption in some countries, particularly in South East Asia, where once corruption was as rampant as it is now in Pakistan:

Increase salaries of government officials and workers in line with the remuneration prevalent in the private sector of Pakistan.

Persons who can clearly see the damage that is being caused by corruption in Pakistan must speak up. They should discuss, debate, and voice their concerns openly with friends and family. They should help create a culture where corruption is looked down upon. The virtue of being honest and simple living should be lauded, and only the persons who possess such qualities should be accepted as role models.

The media should take the lead in launching anti-corruption campaigns. They should conduct investigations and report cases of corruption supported by facts, report on estimated damage done, and identify people who are involved in such cases.

Authorities that provide funding for projects should encourage whistle-blowing and provide monetary and other awards to those whose reports on corruption have proven to be correct.

Authorities should maintain blocklists of those officials and agencies that are known to engage in corrupt practices and should keep them away from assignments that involve public projects and services.

Authorities should not shy away from prosecuting senior civilian and military officials and political leaders who engage in corruption to set examples.

The political parties of Pakistan should have policies that shun any leaders and workers who engage in corrupt practices.

• All institutions, including political parties, should have policies that force those officials to

temporarily resign when credible allegations of corruption surface until those allegations are proven to be false in a court of law.

At the heart of Pakistan’s recent anti-corruption drive are the country’s National Anti-Corruption Strategy (NACS) launched in 2002, the National Accountability Ordinance of 1999 (amended 2002), and the National Accountability Bureau – the agency charged with the implementation and overall coordination of the NACS and the Ordinance. A general discussion on these is out of the scope of this U4 answer (a bulk of information on these general reform efforts is widely available, and some good resources are listed in Part III of this answer).

In this section, reform initiatives in some of the specific sectors perceived to be most affected by corruption) are listed. Namely, efforts in areas of police and law enforcement, judiciary and legal profession, and public procurement are discussed. The second section of Part II lists some reform initiatives in other areas.

The reorganization outlined by the new Police Order of 2002 and the Police Complaints Department will improve the functions of the police and provide relief to the citizens. Reportedly, one of the first steps taken in the reorganization was the separation of the police force into various branches, divisions, bureaus, and sections. It is intended to help improve efficiency but, in fact, may lead to more corruption and less efficiency due to non-cooperation or lack of coordination. The Police Order of 2002 has also outlined a form for setting up district Public Safety Commissions (PSC). The functions of such commissions will inter alia include investigations of complaints on excesses and neglect against police officers and encourage greater police-public participation. The PSCs are to be set up within the Federal and Provincial Governments and the District and Town Local Governments. There shall also be a National Public Safety Commission. Further, the Order makes provisions for setting up federal and provincial police complaints authorities to inquire about serious complaints against members of federal law enforcement agencies. Other measures provided for by the Order include the establishment of the Criminal Justice Coordination Committee to work on the improvement of the system as a whole and promote good practices and of the National Police Management Board to work on overall technical and human resource capacity building within the Police.

In 2002, the National Accountability Bureau, as a part of its study in preparing the NACS, organized an international workshop, resulting in the stakeholders adopting a resolution related to ensuring transparency in Public Procurement in Pakistan. This resolution was incorporated in the NACS report and was approved by the Ministerial Cabinet and the President of Pakistan in October 2002. Amongst others, the recommendations provide that:

The Standard Procedures for Procurement of Works, Goods, and Consultants should be revised by the Public Procurement Regulatory Authority. Either the World Bank or PEC by-laws should be uniformly implemented in all government and semi-government departments till such time the PPRA prepares its own Guidelines;

To ensure transparency and public participation, the Transparency International-Pakistan tool ‘Integrity Pact” should be made an integral part of all tenders;

For every new project, public hearings should be made mandatory for scrutiny of the necessity of the project and for the environmental assessment prior to concept clearance approval;

Evaluation Committees for Pre-qualification and Award of Contracts must include at least two departmental members and a minimum of three independent experts (One each from the Pakistan Engineering Council, Institute of Chartered Accountants, and FPCCI), and others.

An important part of the recommendations of the NACS is the incorporation of the TI Integrity Pacts in all contracts for goods and services where the estimated cost of the project is over Rupees 5 million for consultancy and over Rupees 50 million for Construction Contracts. This has been a major breakthrough in the efforts of Tl-Pakistan, whereby all major contracts will not only provide for the “Integrity Pact” but also include all other recommendations, which have been included in the NACS Document (outlined above). An example of the Integrity Pact in use is to be found in the Greater Karachi Water Supply Scheme (KIII Project) project. An integrity pact, with a formal no-bribery commitment, was signed by KWSB, consultant bidders, and TI Pakistan. It resulted in a successful bid of Rs 62 million ($ 1.04111) against the reserved fees of Rs 249m ($4.2m). The project adopted the least costly selection method. The bidding process was monitored by Transparency International- Pakistan to ensure it was clean and transparent. In the event of a breach of the Integrity Pact, sanctions come into force against the bidders and officials, including liability for damages and blocklisting from future tenders. The procurement process is to be followed by civil society monitoring the contract, specifically TI Pakistan. The Karachi government had expressed plans to apply the same transparent process to other projects.

Some of the weaknesses may be addressed by the government’s Project to Improve Financial Reporting and Auditing (PIFRA). The World Bank carried out a country Financial Accountability Assessment in December 2003. Further, the ADB has approved a US$ 204

million loans (part of a wider sequence) to support the Government of Punjab. Among other objectives, the program aims to improve the effectiveness and accountability of financial management by bringing in transparent and user-friendly budgets and accounts and financial and procurement systems.

The Supreme Audit Institution of the country (the Auditor General’s office) is trying to reform itself by following international best practices, such as those of the International Organization of Supreme Audit Institutions (INTOSAI), as part of its reform agenda. There seems to be some progress in reorganizing the department with a view to adopting modern techniques of audit and reporting formats. It has initiated a capacity-building program under the project to improve Financial Reporting and Auditing (PIFRA). Some of the other reform efforts include the design of diagnostic tools, such as a “Financial Government Rating Index (FGRI)” and an “Internal Quality Roting (!QR) for il5 departments, etc.

The Government of Pakistan has undertaken a number of steps to strengthen the AntiCorruption Agencies and has especially concentrated on the National Accountability Bureau for its reforms. The reforms include the creation of NAB as the sole Anti Corruption Agency at the Federal level; adding the functions of prevention through research and monitoring and public awareness and coalition building with civil society to NAB’s mandate; provisions on appointments of ACAs (from the elected opposition members) and security of tenure of key office bearers of the ACA and others. Further reforms and restructuring are in the process.

The future of Pakistan and the alleviation of poverty in rural areas of Pakistan is highly dependent on the successful completion of all development projects. This success is threatened by the evil of corruption that must be stopped on urgently before it is too late. The religious extremism, deteriorating economic conditions, and worsening living conditions are unnerving the people of rural Sindh and Balochistan, who until now have refused to fall into the trap of extremism. It is imperative that all stakeholders, including political parties, government officials, civil society organizations, private companies, donor agencies, and common people, recognize the carnage that current levels of corruption can do to the heartlands of Pakistan. They must form a grand coalition to stop the menace before it is too late.