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Business, not as usual
The Indian Express, India Saturday, October 02, 2010

Surjit S Bhalla
Corruption is a fact of life, but especially so when a country is transiting from a low to a middle income country. There are differences in corruption over decades.Good governance, or less corruption, is a luxury service — as countries become more educated, more developed, more middle class, they demand less corruption, and they demand more efficient corruption, writes Surjit S Bhalla in The Indian Express.

 

Nine-Eleven marked the peak in world terrorism. There is every indication that the Commonwealth Games being held in India will mark the peak in Indian corruption. How so? Ask any investor in financial markets — the blowout phase, a period when all norms, and rationality, are substituted by irrational exuberance, or despair.

...

That is a bit in the future. Herewith, some lessons from the past, lessons from all countries, developed and developing. First lesson: corruption is a fact of life, but especially so when a country is transiting from a low to a middle income country. It is true that developed economies have considerably less corruption than developing economies. But let us not forget that Spiro Agnew, former US president Richard Nixon’s first vice president, had to resign in 1971 on grounds of corruption — he had taken a $25,000 bribe in the award of a construction contract!

Second lesson: there are differences in corruption. The India of the ’50s, ’60s, ’70s and ’80s also had corruption, but it was mostly of the inefficient sort. You bribed, but things still did not happen. With the advent of economic reforms, and most importantly globalisation, we have moved to an era of increasing, but increasingly efficient, corruption. So how does this bad movie end — when the middle class says it cannot take it anymore. And for that, you needed the CWG, and a villain like Suresh Kalmadi. After all, what was his crime? That he did not deliver.

...

The middle class, the NGOs, the civil society, and the media all smell blood, and more power to their noses. It is really doubtful whether another incident like this can occur.

...

Good governance, or less corruption, is a luxury service — as countries become more educated, more developed, more middle class, they demand less corruption, and they demand more efficient corruption. In the past, this was a slow historical process; today, we in India, and other emerging economies, should consider ourselves lucky that we are living in the age of the Internet. There is literally no place to hide anymore. Non-recognition of this simple reality helps explain the seemingly bizarre actions of the CWG.

...

And while we indulge in openly criticising ourselves and our society (and thank God we do that), here is something else Indians (and especially the oh-so-moral and upright lecturers from abroad) should take note of. Simultaneous with the CWG fiasco, and reinforcing my blowout theory, is another momentous Indian moment in the fight against corruption — the father-son lawyer duo of Shanti and Prashant Bhushan have alleged, with evidence, that eight of the 16 Supreme Court chief justices in India have been corrupt, where being corrupt is defined as being of “doubtful” integrity. I cannot say for sure, but it is likely that such a charge is unprecedented in the world.

...

All in all, this is a moment to rejoice. There is pain today, but it almost guarantees a better tomorrow.

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This article was published in the The Indian Express on Saturday, October 02, 2010. Please read the original article here.
Author : The author is Chairman and Managing Partner, Oxus Investments, a New Delhi based Asset Management Co
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