Can India Ever be Free of Corruption?

Posted by: on Dec 23, 2011 | 22 Comments

‘Trial Opens in Indian Telecoms Case’

‘Graft Scandal Hits Indian Opposition’

Are these the newspaper headlines we have gotten so accustomed to reading? Whenever I come across such news, I wonder whether India will ever be free of corruption. Is corruption so deep-seated that it cannot be erased? Is corruption built into the basic functioning of the government? Has corruption become a part of our psyche?

Don’t get me wrong. India is moving towards better governance and will seek direction from more promising leaders. Numerous initiatives have been taken to free the country from the chains of corruption. The ‘India Against Corruption’ movement is a sign of this. But are social activists like Anna Hazare really working in the interest of the people? Is it really a movement to free India or a technique to gain power? I ponder on these thoughts and hardly ever find a satisfactory answer.

However, whether or not the folks who are currently in power are willing to fight corruption, one thing is clear- The youth today is no longer willing to sit back and take it. If you’d been to Jantar Mantar or India Gate during the ‘India Against Corruption’ movement, you’d know what I mean. People want their grievances heard and social media is playing a huge role in this.

However, one Jan Lokpal Bill will not change things. All it needs is one corrupt politician to find millions of loopholes in the bill. To deal with corruption, India needs to:

• Go down to the grass-root level.
• Limit the role of the government.

This first, is important because the lack of education and vocational training gives rise to the lack of awareness and dissatisfaction. But what is most critical is to limit the role of the government. Regulating industry and enterprise is not governance. Ensuring law and order is. If government approval is required for the private sector handles, it will give rise to positions of power, which forms the basis of corruption. Power corrupts and absolute power does corrupt absolutely.

If government can withhold or licence, tax you extortionately, refuse you permission to expand, then rest assured corruption will result. Leave alone a businessman, an ordinary person too will pay a bribe if that is the only way to get the government official to stop obstructing him.

Get government out of people’s hair and you will reduce corruption drastically, that would be the first step. After we have got corruption down to manageable levels, we can discuss eliminating it.

Zero Tolerance for Corruption

Posted by: on Dec 16, 2011 | 4 Comments

The number 1 topic of discussion these days is corruption. Will putting people in jail solve the problem? Is it even the right thing to do? NO.

There is no person in India who has been untouched by corruption be it either paying a bribe or receiving a bribe. So, the result is that we can apply the law only selectively- If you are unlucky, you get caught, most do not.

If the law was to catch everyone then all of us would be in jail. Is this fair then that an unlucky few be in jail while the rest of us face no penalty? Did not Christ say that the first person to hit a sinner with a stone be the one who has not sinned- No one did.

Let us not look at developing countries like ours; Nepal, Bangladesh, Sri Lanka, Bhutan or African or Latin American countries- No one has found an answer as to ending corruption.

Let us instead go to a developed nation which has been consistently rated- The topmost corruption free place in the world. How did it achieve this status?

Firstly, it gave its people economic freedom- by this it is meant that it made it easy to do business. There were no unnecessary regulations, no restrictions on trade, no licensing requirements and no taxes on imports and exports. Foreign investments are welcomed and government puts no hindrances if you want to bring in money or take out money.

If you do this then you reduce the interaction between businessmen and government and chances of corruption are accordingly reduced.

This country then took another step. Government may not interfere with business people but still same interaction is inevitable.

Government still has to provide law and order, issue passports, take care of roads and issue some limited approvals.

Here the government decided that it will shed its hypocrisy and pay its ministers, bureaucrats and others a salary which is commensurate with the private sector. Its PM is the highest paid government employee in the world making over a million dollars per annum- higher than the U.S. President or any European PM.

After doing this, this country followed a policy of zero tolerance for corruption and has achieved it.

The country I talk of is Singapore. Could our country and our neighbours- Nepal, Sri Lanka, Bhutan and Bangladesh do the same and make this a corruption free region?

The Commonwealth Games

Posted by: on Oct 18, 2010 | No Comments

It must have struck some of you; the way the media, in the middle of the commonwealth games, seemed to change its very acrimonious stance towards the government. The games went very quickly from being shame of the nation to being a cause for patriotic pride.

And yet for the average citizen in Delhi they were a symbol of nothing less than throttling control by the state. With the lack of infrastructure to actually accommodate the games, citizens of the city were pushed around to make that space. And in an unhealthy way, policemen and NSG guards became a common and in some case a harassing reminder of the presence of the games.

And of course now there is talk of a bid for the Olympics. One can only imagine the torture the citizen will have to endure in that case. And with respect to this one has to wonder, if games are to be directly equated with patriotism, and then one must ask, patriotism for whom? The young lady who is harassed by excessive policing, the non-government worker who travels in a stifling metro train every day? Whose patriotism is this?

Government: Less is More

Posted by: on Sep 7, 2006 | No Comments

Why do governments fail? Why are governments everywhere the butt of jokes? In the US, comedians regularly make fun of the president and the gargantuan federal government he heads.

Is it because the politicians and bureaucrats are inept? Would we all be better off if we just threw the rascals out? Would the new persons put in their place do the job any better?

No. The politicians and bureaucrats come from the same genetic stock as you and I. Merely changing the people would hardly have any effect.

Politicians, after all, have superior communication skills which enable them to be elected and become our leaders. Similarly many of the bureaucrats are experts in their fields and worthy of our respect.

Then, are all of them corrupt? Many of them are, but again many businessmen are more devious than politicians and government employees. If these people, presently in business, were given government jobs they would be no less corrupt.

The fault lies not with the people in government, it is the system and the magnitude of the tasks which it takes upon itself that makes the government corrupt, inefficient and unmanageable.

Worldwide, companies which face competition are realising that you can be world-beaters only if you specialise and stick to your core competence. You cannot diversify helter-skelter into every conceivable business and do a good job.

That is why we see Nokia specialising in cellphones, Toyota in making cars, Hyatt in running hotels and Boeing in making planes. What about the governments? They take on too many tasks and hence it becomes impossible to do any of them well.

If the government is going to run telephones, hotels, mines, banks, buses, airlines, duty free shops, universities, research institutions, TV and radio, newspapers, textiles, airports, sugar factories and so on, in addition to performing its function of protecting the lives and properties of its citizens, what are we to expect? No better performance then what we are seeing now.

No man or superman on this planet can do all these tasks well. It does not matter who becomes our prime minister, it does not matter whom he appoints as his ministers, it does not matter who our bureaucrats are.

The gigantic size spawns such complexity that it makes the government beyond our understanding let alone be manageable. MP’s first elected, whether it be in India, Nepal, or the UK are overawed by the House and its byzantine systems. It takes years for them to comprehend government; forget monitoring or controlling it.

Governments have grown too huge to be manageable. Even the smallest government is too big to be run efficiently. The communist regime of tiny Cuba manages in a manner where its people prefer braving death in home-made boats to cross the straits of Florida to get to the US. Can we expect any better from control-oriented governments of other countries?

Any government which spreads itself too thin by trying to do everything, can neither be competent, nor be strong. A powerful government is the one which delivers, which is capable and efficient, and this can only happen if it sticks to a few basic tasks and performs them exceedingly well.

The government of Hongkong came closest to this ideal of being small, and restricting its role in the economy. Hence, its spectacular performance came as no surprise.

What are the few tasks which are required of the government? Its job is to provide us with security, law and order, a method of resolving disputes by being an impartial arbitrator, and to legislate basic rules and facilitating regulations for business.

These functions require that the government protects us from criminals by having a police force, protects us from domestic terrorism and foreign invasions by having an army and establishes law courts to settle disputes swiftly. There is not much else the government is required to do or should take upon itself. Let the government first do these tasks to the satisfaction of the people of this country before it tries to do anything else. Let the government just do this and the people of this great country will do the rest.

The Boss

Freedom and Peace

Posted by: on Jan 16, 2005 | No Comments

Nepal needs peace. Its people are demanding it. They are demanding it because they know intuitively that the peace dividend can be huge. They know – no economist needs to tell them – that the resources which are being diverted by the government and the Maoists to fighting each other could go towards enriching them, should peace prevail.

I am not an expert on conflict resolution; I do not know what demands of Maoists can be met and what can’t be. However, I do know that to end the recruitment of the young people of this nation by Maoists, alternate employment opportunities are required.

Lack of opportunity is the reason that enabled Maoists to cheaply recruit the unemployed youth. If the young boys and girls had economic opportunity, if they could obtain jobs, or had the chance to start their own businesses, it would have been impossible for them to be hired by any terrorist organization.

People who are making money cannot easily be led to their deaths. The young in Singapore, Hong Kong, Dubai, South Korea, and Australia do not offer their lives for revolutionary causes. They have too much to lose.

In Nepal, the girls and boys joining the Maoist had little to lose. It was easy, therefore, for the leaders of this ‘red revolution’ to capture the imagination of the young. They offered the young a life with a purpose. Yes, you could die, but, is life without a job and without hope of one any better? And, what if you won? You would then have the opportunity not only to chart your own destiny but that of your motherland as well. Many considered the rewards well worth the risk of catching a police or army bullet.

For peace to come, negotiations must go on, and one hopes that they succeed. However, the government must, irrespective of how the negotiations proceed, also take measures to end the conditions which led to so many of Nepal’s able-bodied men and women becoming terrorists.

It is not a pre-condition for Nepal’s economic progress that peace prevails. It would indeed be nice if it happens. If however the country and its citizens have access to economic opportunity and wealth, peace is that much more probable.

What is it that is essential for progress and prosperity? Economic freedom. Let the government institute as many market friendly policies granting people freedom to trade, manufacture, and deal with foreigners, and the chances of ending terrorism increase manifold. People, if they are busy doing business deals will not join the Maoists. Those who are already with the Maoist will find reasons to leave if jobs and opportunity are on offer.

The single most important measure which the government can take is to end all controls and taxes on foreign trade. As soon as this happens, people will become busy with imports and exports. They will become busy selling cheap goods to the Indians and Chinese. They will be busy manning the shops, and running shopping arcades for tourists. They will be busy handling the avalanche of shoppers which will descend on them from the neighbouring countries.

Imagine a duty free Nepal. Keep in mind that labour rates are the cheapest in the world and real estate costs are low. All this results in an explosive combination except that this will be an explosion which doesn’t cause death and destruction, but results in wealth and jobs. Shoppers will forget Hongkong, Singapore, and Dubai for Nepal.

Free foreign investment from bureaucratic oversight and regulation. Open every sector of the economy to investment. Reduce taxes and end the red tape which feeds corruption. Guarantee property rights and apply the law equally to all.

Do this and unemployment will end in no time. It will then be an uphill task for the Maoists to retain their comrades let alone obtain fresh recruits. The opportunity to pursue prosperity is hard to compete against, and the Maoist will soon find that out. Revolutionary slogans sell only if the audience have nothing to lose.

I don’t know when or even whether this country’s rulers will take it on this path to prosperity and peace. I do know that should a leader with vision and guts choose to make the people economically free, peace will follow as surely as the day follows the night.

The Himalyan Times

India Shining

Posted by: on Jan 10, 2005 | No Comments

The evidence is staring us in our face. Government is inefficient. Get it out of our lives. Restrict it. Let it perform only its core functions. We will benefit greatly.

Consider the opening of the skies between New Delhi and Kathmandu to private airlines. The exclusive privileges of RNAC, IA and Druk, have been revoked – hopefully for ever. We now have Jet, Sahara, and Cosmic offering us flights as well.

As would be expected, fares have crashed, service has improved, and travelers have a much wider choice as to the time they leave or arrive in Kathmandu. The benefits are going to the travelers, travel agents, hotels, casinos, and others associated with the tourism industry of Nepal.

Economy airfare to Delhi used to be Rs.13,000. Not any longer. All sorts of offers are available. It is easy to travel for Rs.9,600 if you are alone, and if you are in a group, you may pay just Rs.8,000.

If on average 500 travelers use these flights daily, and they now have to spend Rs.1,600 less on their tickets, that means Rs.800,000 a day is being put back into the pockets of the traveling public. On a yearly basis commuters will save Rs.300 million on their travel to Delhi alone. One can now have some idea of how much government monopolies, restrictions, and licensing requirements are costing the people of this country.

The savings have seemingly come out of thin air. Everyone is smiling. Consumers are paying less despite increase in the general price level. Private airlines are happy otherwise they would not have so eagerly commenced operations. Everyone related to the travel trade is ecstatic hoping that additional travelers will mean more money in their pocket.

The only loss has been that of ‘inefficiency’. Bloated government bureaucracies manning RNAC and IA now have to compete and this competition is making them improve too. Those in the travel trade tell us of how the arrogance exhibited by the staff of these airlines has been replaced by a new found humility.

The only question is, why did it take so long? These steps could and should have been taken much earlier. We had enough examples of the success of ‘open sky policies’ in the world.

Let us take the US. Almost 13 years ago, on December 10, 1991, this is what was published in the International Herald Tribune under the heading “Deregulation is working”.

“… deregulation has mostly done just what it was supposed to do, giving most air travelers more flights, more convenient schedules and substantially lower fares.

… For every Midway or Pan American that has departed, a USAir or Delta has taken its place.

…the number of airlines competing on typical routes has risen by one-third under deregulation. That is why fares are now 20 per cent below what the government would have set under its old formula.

… In a new study, Robert Gordon of Northwestern University shows that hub-and-spoke schedules have added more nonstop flights than they have eliminated. And there are more convenient options for nearly every traveller.

…the Brookings scholars conclude that travelers are better off, to the tune of tens of billions a year in lower fares and added convenience.”

It is apparent that no business should ever be granted monopoly or semi-monopoly privileges. Competition benefits us and it is only a matter of time before the benefits spread to all the people of a country.

The road ahead is clear. There should be no further hesitancy or partial steps. Open the skies completely. Allow any airline from any part of the world to come to Nepal. We need more flights and more competition on every route. Let any airline which is willing to fly from Kathmandu to any place on earth do so.

Further privatize all airports and allow them to cater to not only domestic airlines but to international ones as well. Allow international airlines to fly on domestic sectors too and open the domestic airline business to foreign investment.

The benefits to the people of Nepal would not be in millions of rupees but be in billions.

The Himalyan Times