The Sound of a one-handed clap

Sound of the one-handed clap

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Alan Greenspan had not anticipated the meltdown of the financial system that he had supervised for many years even in his worst “nightmare”. In his autobiographical book, presciently titled, The Age of Turbulence, Greenspan wrote , “Enron and WorldCom officers’ theft of shareholders’ assets created a political firestorm. An anti-corporate populism had been lurking under the surface of American politics at least since the age of the Robber Barons of the latter part of the nineteenth century.” And the legislature and the regulators clamped down.

There are many published surveys on bribery and corruption. The most well known are the ones by Transparency International (TI). TI is “a global civil society organization” that is “politically non-partisan”. In these surveys, India or her neighbours perform very poorly. Corporate managers in and from the Indian subcontinent are usually very apologetic and have difficulty in developing a balanced view of corruption as a global phenomenon.

The reality is that every country has its fair share of crooks — some more, some less. Historically, the scale of frauds and corruption and its devastating impact on the economy have actually been more dramatic in countries with higher GDPs.

Ironically, in most surveys, the “cleanest” countries are those that are traditional repositories of ill-gotten wealth. Jeffery Archer’s short story, Clean Sweep Ignatius, is a hilarious case in point. It is a story where irony, wit and satire come together. An African minister of finance wants to cut out the heart of corruption in his own coun try. He flies to a European country, gun in hand (we do not know how he gets past airlines security!) to uncover the names of his fellow countrymen who have squirreled their dirty money in secret bank accounts. After elaborate due diligence, he comes to the conclusion that the European country in question has strict banking secrecy laws and will never reveal to him the names of their customers even at gun point.

Being satisfied, he promptly deposits his own “bribe” money in the bank. The African country and its minister are rightly damned in the story but the role of the other country is only a laughing matter.

The giver is bribing because he is forced to and the taker is the real devil — this notion smacks of double standards and hypocrisy. If we are to root out the entire supply chain of corruption, we must strike at both hands that clap — the so-called supply side and the demand side, as TI describes it.

The last time TI published the Bribe Payers’ Index was in 2006. In the words of TI, “The TI Bribe Payers Surveys evaluate the supply side of corruption — the propensity of firms from industrialised countries to bribe abroad.” According to this index, India is absolutely the worst with rank 30 among the exporting countries surveyed, and China is marginally better with the 29th position in the league table. Switzerland is # 1, UK #6, US #9, Japan #11, Singapore #12, France #15 and Korea #21. I could not find any survey published by TI of “safe-harbour” countries, that is, where corruption money can be deposited safely and secretly.

Perhaps training the guns on “rogue” nations is not a holistic approach. Tarring entire nations with a broad, black brush is unfair. TI’s Integrity Awards in 2007 went to a Vietnamese teacher Le Hien Duc and to a Swiss professor Mark Pieth. They hail from two nations with different transparency perceptions.

There are actually rogue corporations, corrupt politicians and dishonest bureaucrats who operate in the shadow lands of a borderless globe. The honest should not be burdened with their sins.

India is emerging as a powerhouse because most of its citizens are honest, talented and hardworking — the dishonest and corrupt are in a powerful minority.

I should not be misunderstood. I am not condoning corruption and bribery in developing countries. On the contrary, I firmly believe that we must vigorously fight corruption if we want to make our country cleaner for ourselves — just as “crusaders” for transparency in other countries will fight their own battles. But the fight must be co-ordinated to attack the entire global chain of corruption. It is a matter of concern that some surveys, including one recently conducted by an accounting firm, do not get it that greed, bribery and corruption are global, cross-border phenomena. They must be tackled on a global basis through an orchestration of regulators and law enforcement agencies in multiple countries as is done for other crimes.

Corrupt and greedy corporate chiefs abound in Third World countries. But to bring some balance into the analysis, Robert Maxwell was not a Pakistani, Enron did not happen in India and the Worldcom CEO was not from Bangladesh. When bribery happens, for instance, there is always a giver to every taker.

Rabindranath Tagore had famously said, “You should hate equally those who commit wrong and those who acquiesce in it.” It takes two hands to clap. The thunderous sound of a one-handed clap is unreal. The law and public opinion must strike at both hands with equal force — the supply side and the demand side. I rest my case.

The writer is the MD of Deloitte &Touche Consulting, India. These are his personal views