In recent years, India has emerged as a global power. Its economy is one of the fastest growing in the world, its pride being achievements of software industries and ever-booming entrepreneurship and innovation. And yet, the gap between the rich and the poor has risen with developments extremely skewed to some regions. Inequality has also risen in other emerging economies including China, but what makes India more noticeable is that red-tapism pervades India´s bureaucracy and is widely perceived to be hindering the country’s growth potential as compared to that of China.
Recently, India is again in the limelight due to a special bond between its older and younger generation to fight corruption. It all started when Anna Hazare, a 72-year-old well-known social activist, began his “fast-unto-death” (a Gandhian style indefinite hunger strike) at New Delhi´s Jantar Mantar observatory on April 5 this year, to exert pressure on the government of India to enact a strong anti-corruption bill to establish an ombudsman, entrusted with the power to deal with corruption in public offices. The fast led to nationwide protests in support of Hazare.
The public movement against corruption initiated by Gandhian leader, Hazare energized thousands, if not millions of youths through several social networks including Facebook. The fast ended on April 9, the day after Hazare´s demands were agreed to by the government of India, which issued a gazette notification on the formation of a Joint Draft Committee of government and civil society representatives to draft an effective anti-corruption bill (the Lokpal Bill) with a provision of enquiring corruption complaints against the prime minister, other ministers and members of parliament within six months.
As part of a broader effort by the Indian government to tackle corruption, on May 12, India announced that it had taken a step toward strengthening its anti-corruption framework by ratifying the United Nations Convention against Corruption (UNCAC), a legally-binding international standard that seeks to improve anti-corruption enforcement around the world.
While the Joint Draft Committee is currently finalizing the draft Lokpal Bill, this time it was Yoga Guru Baba Ramdev´s turn to begin a hunger strike against corruption and black money. On June 5, thousands of people from toddlers to the elderly descended on the Ramlila Maidan grounds in New Delhi, to support Guru Ramdev, who has millions of loyal and steadfast supporters in India and abroad, acquired mostly by teaching yoga. No doubt, the government of India, which is mired in a series of mega-corruption scandals recently, will have to face enormous public pressure as a result of forcibly removing Baba Ramdev and his supporters from Ramilla grounds where the hunger strike was launched.
Nothing much is expected to be achieved in terms of fighting corruption until and unless top corporates remain the prime funding sources for political parties that directly and indirectly facilitate corruption.
The good news is that India is awakening. Feeling betrayed by the politicians and those in the government, the old and young alike are using their respective tools – Satya Graha (fasting to death) or Facebook (social media) – to raise awareness and fight corruption. A 2005 act giving the right to information is also instrumental in fighting corruption combined with internet and cell phone technologies that have proved effective in monitoring services, infrastructures and the budgets.
The bad news, however, is that corruption is a deep-rooted problem in India like in many other emerging economies. What India needs is a systemic reform, starting with the process of political party financing. For the most part, political funding in India is non-institutional and non-transparent. Nothing much is expected to be achieved in terms of fighting corruption until and unless top corporates remain the prime funding sources for political parties that directly and indirectly facilitate corruption. India has a fairly extensive legislation on party finance and disclosure, but major political parties rely on non-state funding for both electoral and year-round activities by exploiting significant loopholes. However, it should be noted that state-funding of political parties is not the panacea unless the provisions of ensuring internal democracy, internal structures and maintenance of accounts, their auditing and submission to the Election Commission are effectively implemented.
Second, in a society where corruption is endemic, where demanding and paying bribes have become an accepted norm, breaking the culture of corruption will not be easy. Social behavior takes a long time to change. To this end, the citizen movement is an important step in the right direction of transforming social norms, which are typically weak against corrupt politicians and officials.
India’s citizen movement against corruption could be an opportune moment for Nepal to make anti-corruption an integral part of the new constitution by ensuring a proper check and balance of power and a strong coordination mechanism and guaranteeing the political, budgetary and operational independence of anti-corruption institutions. However, like in India, the major challenge for Nepal is also transforming norms with respect to corruption. Although Nepal is perceived as one of the most corrupt countries in South Asia by Transparency International’s Perception Index, tackling corruption is not included in the priority list of any major political party. It is in fact an accepted norm among major political parties to strategically promote those who are good at raising funds legally or illegally for their party.
Moreover, what is frustrating is that the population at large has failed to recognize corruption as a major obstacle to Nepal’s development. A recent UNDP commissioned study “Illicit Financial Flows from the Least Developed Countries: 1990-2008” shows that Nepal is one of the top six exporters of illicit capital outflows. Between 1990-2008, Nepal lost US $9.1 billion, which is more than 8 percent of Nepal’s GDP and nearly eight times greater than the official development aid received by Nepal. This is a huge amount of resource leakage for a small poor country like Nepal. That is money which could otherwise have helped to get all children into school, helped all mothers give birth safely, expanding access to basic healthcare, better nutrition, clean water and sanitation for all.
The weaknesses in custom systems, pervasive corruption, existence of an underground economy and shadow financial systems, trade mispricing (overpricing of exports and under pricing of imports), deteriorating income distribution (rich getting richer and poor getting poorer), and tax evasion are among the causes of illicit financial flows but there is a clear need for Nepal to look into the issue of resource leakage more seriously and discover effective ways to curtail illicit flows. However, it is unfortunate that the development financing debate in Nepal is so far either on up-scaling resources through foreign aid or finding some effective ways to use remittances, but less on preventing the illicit financial outflows.
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