August 31, 2011

3 things everyone can do about corruption

Why is corruption such a big deal? India’s GDP is growing at 7-9% per annum, and presumably will continue to blaze along for some time. So, why fret about corruption when things are looking rosy? What are we complaining about? Don’t we have more important things to do than (Jan) Lokpal bill? We’ve been mired in corruption for 50 out of 65 years. What’s another few years? Is it even possible to fix it? Can this Pavlovian reflex that causes the reaching out of hands under tables and behind closed doors into another man’s pocket be cured?

Beyond the moral aspect, there are tangible and economic reasons as to why corruption belongs at the top of the list of issues India has to confront now.

The Numbers

India’s GDP (est) in 2010

  • Based on real exchange rate: $1.5 Trillion (Rank 12th in the world)
  • Based on purchasing power parity: $4 Trillion and change (Rank 5th in the world)
  • Growth rate: 8.3% (Rank: 7th in the world)

According to these key metrics, we’ve done well. In fact, outstandingly well.  So, why bother?

Why we should care

In the world of economics, capitalism and free markets, the past only evokes admiration and an occasional eulogy. The future is everything. The question that will be in front of us over the coming decade: How long can we keep this up? The answer lies in how we fix our problems. And if we do not fix the fixable, the future will be easy to predict. And, it won’t look pretty.

There are some good reasons to care about corruption:

1. It’s a tax and it destroys morale. Corruption introduces enormous inefficiencies. It raises the cost of living for all except the corrupt. It’s demoralizes the talented and hardworking amongst us.

2. Will growth slow corruption or corruption slow growth? The answer is yes to both. If we don’t kill corruption, we won’t be able to grow. If we don’t grow, we won’t be able to kill corruption.

3. Perception is bigger than reality: We are no longer a sheltered economy living in our own shadows. We are on the global stage. We have to assure our potential partners that we are serious and that they will be treated fairly. It is a mark of leadership. A corrupt nation cannot be a world leader.

3 things everyone can do on this journey

  1. Take a side: It doesn’t really matter which side. If you don’t like Anna, go find someone else who’s worthy of your support. Whatever you do, you cannot stay silent. Dialogue is the life blood of a democracy. As good citizens of this country, we owe it our voices.
  2. Say No to incompetency:  It is said that power corrupts. It‘s perhaps important to realize that incompetency too corrupts. Power corrupts the few, while incompetency corrupts the many. Those unwilling to subject themselves to the tough realities of merit and hard work, resort to corruption. Insist on a job well done, especially if you’ve had to pay them for it!
  3. Try the “rupee for rupee matching contribution” experiment:  Indira Gandhi once supposedly remarked, “Corruption is a global phenomenon” as a way to explain corruption away. We’ve glorified such leaders. These chickens have been roosting for decades, and it will take effort and time to root them out.  While you fight the good fight, how can you tell if your efforts are paying off? Try this: For every rupee you pay as “bribe”, pay yourself a matching rupee. Consider this your corruption provident fund. The size of this fund over time will give you an idea if we’re winning or losing. It’s easy to do. Worst case, you’ll have money to buy a few drinks and drown your sorrows if things take a little longer.

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