Tuesday, December 1, 2009

Combating Corruption

The News
Tuesday, December 01, 2009
Abid Hasan

The recent damning Transparency International report on corruption in Pakistan has had the usual response. Critics are terming it a conspiracy against democracy—as if the report’s main corporate objective was to tarnish Pakistan’s high-performing and clean democratic system. In addition, they are questioning the survey methodology, insulting citizens’ intelligence by wanting them to believe that Pakistan’s pristine corruption-free record is not being picked up by a flawed survey methodology. This ostrich-like behaviour is similar to the outbursts by Gen Musharraf and his cronies on the sampling flaws of the surveys which started showing the rapid decline in his popularity. The prime minister would be well advised to admit that indeed corruption is an endemic issue, as it is in all developing countries, and distance himself from party loyalists taking the foolish stance of discrediting the report.

The government’s second response has been to establish an in-house committee. It is a well established practice around the world for governments to establish committees when they want to defer action. In this instance the in-house committee is also handicapped — either its members owe their jobs to their closeness to party leadership or they are civil servants who are not likely to recommend politically unpopular actions for fear of either becoming OSD or not getting government jobs after retirement. Although unlikely, that much will come out of this committee, but just in the one-in-a-million chance that they are serious about addressing the corruption cancer, a few suggestions for the prime minister and the committee.

The government should appoint a commission to prepare a credible and comprehensive National Anti-Corruption Strategy, which takes into account proven global practices, for presentation to parliament for approval. Pending the announcement of the strategy, the government should consider implementing the following actions immediately.

First, reforming the NAB by making it independent, expanding its jurisdiction to all organs of state, and appointing a retired “non-PCO” Supreme Court judge as its chairman. The NAB’s functioning is compromised by having its chairman from within the government (civil or military), while the appointment of Supreme Court judge to this position could ensure that the NAB works in a depoliticised manner and within the law. The NAB chairman and senior management should be appointed for a five- to seven-year non-renewable term, with safeguards to ensure that they cannot be easily removed. The NAB should focus on investigating corrupt practices of holders of public office and senior judicial, military and civil officers, and public contracts over Rs500 million, and not waste scarce resources going after patwaris, SDOs and police constables.

Second, the “reformed” NAB should engage a world-class audit firm to conduct an independent audit of all financial returns filed by elected officials with the EC, with the objective of verifying their reliability and faithfulness, especially matching the personal lifestyles and assets of the elected officials with their declared sources of income. This exercise is a critical first step in reducing corruption at the top, and curbing the influence of the corrupt in the political system. In addition, the prime minister should require all those ministers and public-office holders to resign from their positions, who, themselves or their immediate family members, have benefited from corruption-related NRO provisions and loan write-offs. Just as the fish rots from the top, pervasive corruption at the top will prevent any meaningful anti-corruption drive.

Third, the NAB should establish a national call centre, with toll-free numbers, for people to call in to report financial wrongdoings. While there will be frivolous calls and calls falsely implicating people, using up scarce investigative resources, such information could be easily screened out. Importantly, such a mechanism could act as a deterrent and generate useful leads. The NAB should also partner with the media in its crusade against corruption.

Fourth, the Public Procurement Regulatory Authority (PPRA) should be strengthened, and made independent of the government, starting with appointing as its chairman a person of high integrity and someone who has years of public procurement experience. In addition, in respect of large public contracts (say over Rs 100 million), these steps could be taken: (i) their award evaluation should be put on the PPRA’s website; (ii) at the time these contract are being signed, the electronic media should be invited and in their presence the signatories to the contract should make written and oral declaration that no commissions or kickbacks have been given or received in respect of the contract.

Fifth, the ethics rules in respect of “Public Office Holders and Senior Officials,” should be tightened as follows: (i) all gifts over Rs1,000 should be deposited with the Toshkhana and these should be sold through open public auction, with the gift receiver (and immediate family) prohibited from participating in the auction. Rare or unique gifts should be given to the National Museum for its collection; (ii) government officials and public office holders should be prohibited from taking up positions as Board members of public corporations, going on travel paid for by private companies, using cars provided by public corporations, and membership of procurement committees taking decisions in respect of contracts in which firms owned/managed by close relatives and friends are participating/ (iii) making it an offence for public-office holders to recommend individuals for government and public sector jobs; (iv) the FBR should be required to audit annual tax returns of all public-office holders and senior officials of all branches of government, and make the returns and audit findings public.

Sixth, the heads of all major public enterprises and key agencies (the FBR, the police, irrigation departments, etc) should be required to announce (and make it available on their websites) concrete steps to implement a “zero tolerance” policy to combat corruption, including steps to reduce discretion — which is a major source of corruption — and increase independent oversight and accountability. In addition, to enhance transparency of the government’s decision-making process, once a cabinet decision is taken in respect of economic policies and development projects, the related cabinet papers should be put in the public domain.

Seventh, taking the following actions to reduce opportunities for bribe seeking and to enhance availability of information to the public: (i) strengthening the Competition Commission and supporting it to aggressively pursue cartels and restrictive trade practices, which are a major source of corrupt practices and bribes to officials regulating these industries; (ii) civil government and military getting completely out of commercial businesses and housing land development, which are also a major contributor to corruption; (iii) e-filing of citizen’s complaints, FIRs, reporting fraud and corruption, which is easily possible now that internet is so widely available; (iv) strengthening implementation of the Freedom of Information Act; (v) using standardised stamp paper, generated by the FBR computer network, for all immoveable property transactions, and declaring benami transactions illegal.

The above will not eliminate corruption, but could diminish it. No country has eliminated corruption, but many have reduced it to very low levels by lessening opportunities for corruption and enforcing harsh penalties. Most Pakistanis, like citizens of all developing countries, have little hope of any meaningful action on the corruption front in an environment where the fox guard the chicken farm and where the system is captured by crooks, corrupt individuals and criminals. We may be in the Third World, but we must launch a crusade for higher standards of ethics from public officials and greater financial probity in use of taxpayers’ money.

The writer is a former operations adviser of the World Bank. Email: fffhasan@gmail.com