Thursday, July 06, 2017

It is about power, not just about money.

"Why growth has not hit corruption hard in India," wonders Shekhar Chandra. "India has been the fastest growing major economy in the world for the most part of the last few years. Foreign direct investment (FDI) in India increased 2.5 times from $24.3 billion in 2013-14 to $60.1 billion in 2016-17. However, economic progress has not seen a commensurate reduction in corruption." A survey last year showed that bribery rate is at 69% and 41% of people think that corruption is increasing. Perhaps, poor countries do not have the money to build institutions. India has a shortage of judges, the Central Vigilance Commission has shortage of 27.77% in group A posts and 28.57% in group B posts, while the CBI has a shortage of 1,584 officers. However, there is no guarantee that increasing the number of officers will reduce corruption. Politicians have no interest in reducing corruption because their powers depend on it. A lady police officer in UP who arrested BJP goons for obstructing traffic has been transferred. "In the developing world, corruption is public enemy number one," said World Bank President, Jim Yong Kim, vowing help in creating institutions to get rid of corruption. Corruption maybe more common in poor countries but there is no proof that eliminating corruption will improve productivity. A policeman may stop taking bribes but he maybe no better at solving crimes and a teachers may attend classes but may not teach, wrote Prof Ricardo Hausmann. Apparently, one million people have been punished for corruption in China by Xi Jinping, which does not explain how China became the second richest economy in the world before Xi became president in 2013. The drive against corruption has increased profits of some companies, for not having to pay bribes, but has hit share prices of alcohol companies. The doubt is that the anti-corruption campaign is designed to increase Xi Jinping's power by eliminating opponents, making him a dictator, which is a crime against the people. There is corruption even in the US, the richest country in the world. Lucy P Markus is optimistic that companies and governments are serious about tackling corruption. But Paul Krugman was angry that the "vampires of Wall Street" are trying to get rid of the Dodd-Frank Act, which regulates predatory lending by unscrupulous financial wheeler-dealers. Historian Robert Harris said that Julius Caesar died because he came to the senate despite suspecting a plot to kill him. He said that today's politicians hang on for too long until they are forced to go. A sentiment echoed by David Cameron who was forced to resign after losing the Brexit vote. Indian politicians will never dream of leaving because the returns are so huge. Corruption keeps them in power and they will kill anyone who tries to find the truth. The 7% growth is only in the top 7%. And it will not change. 

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