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    South Asia
     Aug 19, 2006
The wages of corruption
By Chan Akya

"In India, corruption is under the table. In China, it is over the table, while in Indonesia corruption includes the table," it has been said. People might quibble about the relative placement of Asia's three largest countries. Depending on direct evidence of paying off government officials, and the nationalities of those making the payments, the temptation to reclassify stands quite broad.

Whichever way you wish to read the quote, what remains undeniable is that corruption is more firmly rooted in Asian culture than is commonly acknowledged. Western views of Asia are misshapen by their experiences in places like Singapore and Hong Kong, and all too often ignore the realities of doing business


elsewhere. I will look here at the three countries mentioned in the above quote, in the order they are mentioned.

In India corruption is almost entirely a post-'70s phenomenon, with the country's politicians at the epicenter. While bureaucrats are also corrupt, they have derived strength from their political masters - indeed those working for relatively honest politicians are demonstrably less corrupt than the average, as well as being unhappy, presumably.

History is not kind to either the Congress party or its nemesis, the Bharatiya Janata Party (BJP). The Congress that exists today is the creation of the late prime minister Indira Gandhi in the 1960s. Even as Indira Gandhi herself may not have taken bribes (opinion in Delhi is mixed on the subject), she was megalomaniacal enough to have interfered in the bureaucratic machinery all too often, a process that peaked with her declaration of a state of emergency in the mid-'70s.

In turn, the centralization of power created an army of sycophants who promised access to Gandhi, usually for a monetary consideration, but also sometimes through the creation of jobs in favored electoral constituencies. The sycophants were tolerated by Gandhi as they served her political purpose of splitting the opposition parties, the success of which can be measured by the short-tenured government that defeated her by a landslide in 1977. In the '80s, the process intensified within the Congress, with the Bofors scandal causing the government of Rajiv Gandhi to collapse at the hustings in 1989.

Meanwhile, the opposition fared little better. The BJP, espousing Hindu nationalism, had always been funded by small businesses, which hoped to derive some sops in the form of tax collection gigs. The rest of the political spectrum is quite diverse, and I believe that its very plurality is a cause for corruption increasing. Anti-incumbent voting is rampant in both federal and state elections, causing many political parties to accelerate their collection of bribes rather than take a longer-term view.

Second, the composition of political parties is ever-changing. For example, the success of caste-based political parties in the north has resulted in a substantial increase in corruption, presumably to pay for mounting election expenses. Corruption is presented by such parties as a redistribution of income from upper castes to elected members of the lower castes, although I very much doubt that much munificence to caste-mates results from such bribes.

As with Indian reforms, the outlook for legislative tightening in this area appears quite limited. For one thing, no political party in power now is clean, which means that any effort to rein in corruption would face internal opposition. As a wag once observed, no one in the Congress would propose the death penalty for corruption, as that would mean hanging their members of parliament.

Indians do not have a choice when it comes to corruption as most of their political parties (with the notable exception of the communists) offer simply varying levels of corruption. The choice is therefore to vote for the communists and risk economic stagnation like Bengal, or vote for another party and hope that the benefits of growth exceed the cost of corruption.

Return of the eunuchs
If India's plural democracy has pushed corruption ahead, China's one-party state has not done much better. Ever since Deng Xiaoping issued his "to get rich is glorious" edict, the party has seized on many opportunities to make money. Whether it is the People's Liberation Army (PLA), whose suite of businesses rivaled any Western conglomerate (until president Jiang Zemin cracked down late in the '90s) or local party officials whose fingers appear in every urban development, taxpayers' money has been illegally channeled into the hands of politically connected individuals.

Additionally, the secondary costs of corruption such as bad loans, cannot be calculated at the present juncture. This is best illustrated by looking at the history of some of the country's high-flying bankers and businessmen, many of whom have come to grief as reports of their wealth spread. The golden rule in China is to avoid being named, which would usually cause the party to investigate and quickly judge the official. One thing I have noticed though is that higher-ranking officials usually demand more long-term benefits such as joint venture projects and education or job advancement opportunities for their children as compared with lower-ranking officials who are mainly preoccupied with cash.

Culturally, the Taoist framework of self-maximization has much to do with corruption in China. In contrast with the Confucian principles that call for officials to act for the common good, Taoism recognizes the need and right of individuals to act for their own benefit. This allows Chinese people to accept the need for officials to enrich themselves, and, indeed, many see the richer as more successful. This is why corruption is quite open and direct; you can almost predict what any particular activity will cost.

Another feature that merits attention is the changing qualifications for becoming an official in China. Aspiring civil servants used to undergo a series of grueling examinations; passing them guaranteed jobs in government. Under that system, the most corrupt officials were usually palace eunuchs, whose resurgence from time to time has spelt the end of many regimes. With no central tests (which were only scrapped in the early 1900s), today's officials derive much of their power from party politics, which is really another way of saying palace intrigues. In effect, today's politics in China are more representative of those practiced by the eunuchs, which is why I fear that the corruption epidemic will only intensify in years to come.

Wayang puppets
Javanese kings always ruled through a combination of intrigue, superstition and selective rewards. This placed them on the same level as a dalang (puppeteer) in a wayang kulit (shadow puppet show), carefully controlling the movements of various puppets and introducing surprise changes to the script depending on the audience reaction. The last of the great "dalangs" was Suharto, whose use of his country's talented Chinese community reflected a genuine marriage of convenience.

In return for effective management of resources which gave them money, Chinese businessmen supported Suharto's family and addressed their financial needs. Their lack of a power base locally meant that they could never stray too far from the family. This is the context in which the proverb opening this article was made.

The arrival of democracy has resulted in greater corruption as each successive ruler has sought to cement his or her grip on the populace. While the people were promised less concentration of wealth to undo some of the ills of the Suharto era, this has been more difficult to implement due to the changing legal and political environment.

Meanwhile, the stagnation of investment has meant greater pressure on the government even though Indonesia, being a resource-rich country, has much to offer in the current environment of soaring commodity prices.

With the businessmen of old refusing to cede control and a whole host of new players from the West and the Middle East arriving at the country's doorsteps, corruption has become endemic. The search of the next dalang is on. In the meantime, budding businessmen will have to support (pay) many contenders. At stake are not just the country's resources, but its entire policy framework as well. In this respect, Indonesia represents the worst of the Chinese and Indian experience in terms of corruption.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)


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