Hide the real donor and beneficiary in as many layers as possible.
Keep each layer segregated so that each acts independently without any knowledge to or from other layers.
Destroy the evidence from each layer.
It might sound harsh but it is true that poverty and bureaucracy encourages corruption and corruption damages not only the image of a nation but also their effort to fight poverty with the result globalization suffers a setback. Whenever there is no transparency in government or business decision making, corruption is bound to come uninvited.
It is an indicator of costs for getting things done. The virus of corruption is universal, the difference being of magnitude and sophistication. It is a slow poison and a crime against the integrity of the nation. The giver and receiver both are committing the same crime.
In business nothing is given or taken as free, whatever looks free has its costing hidden in the price structure? A nation with high level of corruption loses appreciable revenue through high costs and lost opportunities.
Besides damaging the international image of the nation itself, corruption also discourages the potential investors. In nutshell it is like a toxic pollutant and a parasite, it has to be weeded out from the system. We can fight against corruption only if we know it fully well.
Whenever we discuss about corruption we generally point our finger towards “people” and not the institutions because an institution or a state or even a country cannot be corrupt, what is corrupt is the wide gap between respective policies and practices that forces the people who staff the institutions to go or adopt corrupt practices to satisfy their needs that are unjustified.
The most fertile grounds where corruption nourishes are the “business” and “the bureaucratic power” because one holds the money power and the other the power of governance by virtue of numerous policies rules and regulations. In between them the “need” factor tries the balancing act brings out the “other means” to satisfy the need factor.
The annual World Development Report (2004), which surveyed more than 30,000 companies in 53 developing countries, says “a vibrant private sector creates jobs, improves living standards and provides the taxes necessary for investment in public services but too often governments stunt the size stunt the size of those contributions by creating unjustified risks, costs and barriers to competition.
More than 90 percent firms reported gaps between policy and practice, with the informal economy accounting for more than half of the output in many developing countries. There is need to close these gaps and confront deeper sources of policy failure that can undermine the investment climate.” Corruption thus appeared to be a “power tool” with high manipulative power in the hands that intend to use it.
The word corruption originated from the varying need factors of the givers and receivers.
The precise definition to this power tool is yet to be formed but at the 9th UN Congress held in Cairo in 1995, corruption was defined as “bribery or any other act relating to persons vested with responsibility, aimed at influencing the performance of their official duties and at obtaining any improper advantage for themselves or for others.” Another general definition is “To loose integrity by receiving something”.
The list of definitions will ever grow but it is a fact of public life and most of the countries have respective explanations on this topic, some of the most important explanations were given at following conferences:
1. United Nation’s manual on Anti-Corruption (2002);
2. OECD convention on combating corruption. (1996);
3. European Unions Convention on fight against corruption (1997); and
4. Inter-American convention against corruption (1996).
There is no perfect definition of this activity even though it is wide spread and most discussed activity. In 2002 UN convention against corruption there was one consensus that the convention will not try to define corruption but will list specific types or actions that can be termed as acts of corruption.
However World Bank did cover it at length in their Nations Manual on Anti-corruption Policy Part II. Most of the definitions of corruption perceive corrupt behavior as dishonest acts committed by any person appointed or authorized to discharge any duty relating to the assigned office.
This perception of corruption implies that corruption concerns not only public officials but all those who exert public influence because of their economic or political status or who administer public funds or assets. Corruption has become a critical issue in the economic and democratic development of nations.
What are those actions or types that are classified as corruption or corrupt practices? “Bribery” stands out as the most frequented version of corruption and corrupt practices. The other forms of corrupt practices include Embezzlement Theft and Fraud.
Types of Corruption
Bribery:
The World Bank manual defines bribery as “Bestowing of a benefit in order to unduly influence an action or decision”. This action can be done at both the sides, the one who wants it or the one gives it. The receiver and the giver both are guilty of the same crime. We can go a step ahead and say those who hide such acts are also equally guilty under the broader term of corruption.
This is the most common act of corruption and is prevalent in business and politics. All the nations have laws against it but it is still uncontrollable and more powerful an act than the threat against it.
This word bribery is commonly associated with “benefits”. The receiver expects some benefits and the giver has a list of benefits that he can offer, the extent of these benefits would depend upon the extent of favours expected in return. What are these benefits?
Hard cash; Gifts; Sexual or other related favours; Entertainment; Influencing; Acts relating to tax and criminal liabilities; Promise of incentives/promotion/transfers; Selected inside information that is otherwise not available and has direct or indirect impact on business, technology, movement and locations, personal etc.; To avoid or to kill competition.
The payment or the promise of money or other illicit lucrative consideration, as mentioned above, to induce another in a position of decision making authority, or otherwise, for gaining favours which otherwise cannot be attained by the briber are the acts of corrupt practices. The above benefits need not be given directly to the seeker but may be by way of indirect routing to persons selected by the receiver.
The law administrators and the bureaucrats are bound, as servants of the society, to administer justice without fear or favor, and they are legally and morally forbidden to take bribes in the course of their duties.
But the question is, are they free from corruption or corrupt practices? The public at large knows the answer and it is corruption and more corruption. Those who hold public offices to which patronage or power of any sort is attached are specially bound to use their power for the common good.
They accepted office under the express or tacit condition that they would use their influence for the public benefit, not merely for their private emolument. If they sell the posts, offices or favors of any kind, in their gift, for money or any lucrative consideration, they violate the express or tacit pledge that they gave on their assumption of office.
Recently World bank started a discussion forum on corruption under the title of “The cost of corruption” (world bank.com). This forum officially closed in Jun-04 but can be accessed for detailed study.
The various contributors argued the reasons of corruption and ways and means to curb it. The World Bank itself suffered from accusations that its funded projects and operations within the bank itself are subjected to high degree of corruption. Some of the estimates suggested that corruption has crossed 1 trillion US dollars. This is more than the GDP of many nations.
Embezzlement:
This is another form of corruption. It involves hard cash or assets in the form of property shares bonds etc. It is done by those who are actually not entitled to it but by virtue of their position and/or knowledge have direct access and/or means to lay hands on to the related legal information.
Generally it involves large cash and/or assets of appreciable market value. It is not necessary that it is done on direct basis but it can be done indirectly by passing related information to others who actually do the act of embezzlement. The person who passes the information or means does it for certain returns.
Theft:
It means taking of assets (tangible and intangible) by someone who has no legal rights to it or theft is the secret taking of another’s assets against the reasonable will of the rightful owner without the use of violence or violent acts.
The word secret is not used to exclude the idea of the owner’s presence and advertence whilst the theft is being committed. It is used merely to signify that the crime has been perpetrated without violence towards him. Not only the taking, but the keeping or the use unjustly of what belongs to another against his will, is to be considered theft.
This would happen, for instance, where one unwarrantably refused to restore what had been entrusted to him as a pledge or loan or only for safe-keeping. Likewise where one would manage to ride on the railway without paying any fair. Theft violates the great virtues of justice and charity.
Fraud:
It involves the acts of misrepresentation aimed at gaining undue advantage in material values for personal benefits. A person seeking bank loan may present false documents of his property which never existed, a relief worker claiming relief for ghost number of sufferers, a state minister claiming disaster relief by inflating extent of damages suffered by his constituency, under invoicing, wrong weight & measures, etc. are some of the cases of fraud.
Extortion:
Embezzlement, theft and frauds are nonviolent means of corruption but extortion is by the use of force and or violent means to extract benefits, extortion uses the acts of coercion directly and or indirectly.
The biggest question is “can we fight corruption” The answer is yes we can if we know it fully well—
Though it is very difficult to define and describe the types of corruption and the damage it causes, but following brief outline will be enough to familiarize you with it:
Types of Corruption:
1. Corporate level (major heads):
Corruption through services:
Free and expensive dinners. Free car with driver and petrol, Free stay in hotels & resorts, Free and expensive gifts, Employment, promotion and, transfer favours.
Corruption through cash payments:
Direct and/or indirect payment, By cash transfer into bank account, By under invoicing expensive gift, By under invoicing export/import bills and crediting balance in numbered overseas bank account.
2. Situations promoting corruption:
Undue favours (business/administrative), Short cut for procedural time, Misrepresentation, Delays and expiry, Lack of knowledge.
3. Breeding grounds for corruption:
Governmental departments (purchase, licensing, certifications, etc.), Exit and entry points of international trade, Financial institutions, Confidential information sources, Advance information on policy matters.
4. Fight against corruption:
Simplification of rules and regulations, Transparency of procedures and processing, Accountability of actions, Audit of time and travel, Audit of expenditure, Audit of profit and loss, Reporting system
Verification system, Redressal system, Public awareness programmes.
5. Anti-corruption Programmes (Public Interest Laws):
Corruption is one of the major factor for the poor state of the poor in the developing and least developed countries. Firstly they do not get what they deserve from the various beneficial programmes directed towards their welfare, and secondly whatever they get is not in time and not in sufficient strength.
Globalization in true sense will be achieved only if the large populations of the developing and least developed nations benefit from it directly or indirectly. This brings us to the most important question what can be done to change the state of affairs of the poor.
Case: Anti-corruption Programmes in Ukraine:
Ukraine has suffered from corruption menace for a long time. A local private body collaborated with USAID to fight against corruption and set up “Citizens Advocacy Office—CAO”. The purpose of the programme is to pick up cases where individuals had suffered due to unwarranted acts of government officials. The programme was started in July 1999 with 24 hours helpline.
So far five cases have come to this organization:
(i) A police official caught a group of criminals, but high Ukraine Government official turned the table against the police officer and he was arrested.
He approached CAO who investigated the case and found the very Government official being involved with the criminal group. CAO appealed to the Ukraine President and finally the case against the police officer was dropped. What happened to the corrupt Government official is not known.
(ii) A captain of a cargo ship reported wrong doings of certain fleet administration officials who were siphoning out funds in third country in their account. However the captain was entrapped by the officials and sentenced to 5 years imprisonment. He contacted CAO who took up his case in July 1999. CAO not only managed to absolve of the captain of any wrongdoing but also initiated cases against the corrupt officials.
(iii) A case is under process where the defendant has accused the Ukraine Government officials of corruption and favouritism in the name of privatization.
In USA there are very strict laws against corruption in business dealings especially for the international business. The American business community is constantly watched and advised against using corrupt practices to get business contracts.
Even the World Bank, WTO and ICC have special departments to fight against bribing and corruption. The most problem areas are located in the developing and least developed countries. The situation in India is no better. These two factors hamper the spread of globalization universally; they have to be uprooted out of the system.
Water:
It might sound strange to include water in matters on globalization but there is enough reasons to include it. Firstly because it is going to be the main reason for all future wars and social upheavals in say another 50 or so years, and secondly because it has been taken for granted by the people as a free gift of motherland.
It might have been so centuries ago but not so in the current century. Many civilizations flourished because of it and many vanished because of it. The people who advocate globalization of trade and commerce must include globalization of water resources management for the survival of the humans and the living beings.
The problem area is not any water but the potable segment of the water, it is this segment which is diminishing not year after year but month after month. “Water Management” has to be a part of any governmental agenda for progress.
For trade and commerce WTO can formulate any number of laws to unify the world into one system, but unification on waterfront is next to impossible since it is linked with “Right to live”. What happened in Bolivia during March-April 2000 is a lesson to learn who think globalization in water can work on the same line as international trade and commerce.
Bolivian case:
The water riots in Bolivia in March-April 2000 left two dead and 175 injured including two children who went blind due to teargas charge by police. Reason? Water!! Bolivia was facing water crises so World Bank initiated a conditional loan to the Bolivian Government that if they privatize water production and distribution the funds can be used.
The funds were used, water supply was privatized. The contract went to Bechtel US and United Utilities, UK with 16% guaranteed returns. So far so good. The problem in this venture was that this strategic alliance between the US and the UK firms were the monopoly suppliers of water.
They were (are) responsible to their investors and wanted to recover the capital investment as soon as possible, so they raised the price of water by 35% Bolivia is not a rich country, the poor people had to spend half of their wages to buy water, and if they do not pay the water is disconnected. The situation erupted in the form of street demonstrations and led to riots.
At the time of writing this section, it is not known whether the price hike has been withdrawn or the water license cancelled. Bolivia is not the only country where water privatization has taken place, Philippines and Argentina are other two cases worth study.
The reason to include this brief section on water is especially in context to India where potable water is gradually becoming scarce to find and numerous mineral water companies have come up selling off surface water as mineral water.
There is also a growing voice of concern for privatization of water supply system in the metro cities. It would be in favour of the Indian Government and the Indians in general to study the implications and results of privatization in other countries before trying out in this country.
Water is fundamental to life and to live is basic right of every living being. Air, soil and water are the gifts of nature to mankind to live and propagate life. Any privatization of these three basic elements will create riots especially in the developing and least developed countries where more than half of the population lives below poverty line.
For them access to these three is their right for living. However in order to make these three available to everybody, proper management of the available resources have to be done at national levels, especially for water the approach could be like;
Water Management at governmental and NGO level, covering creation, conservation and consumption.
General awareness programmes to educate population on the values of these resources and their proper utilization and conservation.
Both in the developing and the developed countries the general tendency is towards bottled water. This form of water can be open to privatization, but the water supply in the traditional ways of the Municipal water supply lines to continue at rates fixed on social factors of the societies (poor getting community-tap water free) and not so poor and others above poverty line through metered supply.
Globalization that neglects the Needs & Rights for Living of more than half of the world population is bound to fail due to the sheer weight of that portion of population.