Endemic Corruption afflicts whole of South Asia perpetuating Grinding Poverty for Hundreds of Millions

I am surprised at the similarities in the corruption scandals hitting the South Asian nations almost daily. Despite hundreds and millions of citizens living in grinding poverty and misery, the elite of the society can compete in their billions with the richest nations around the world. This is not due to their hard work or great intellect but massive endemic corruption. Globalization has just increased the magnitude of the loot and made billions for the people in power through pelf and plunder. Corruption has a direct impact on development and growth. It is not only the South Asian elite that is involved in corruption scandals, also involved are the big MNCs from the West who supposedly have high corporate governance standards. Note Wal-Mart was recently caught paying millions of dollars in bribes systematically to hundreds of state officials in Mexico.

Capital Deficiency in this region has led to massive Infrastructure bottlenecks leading to government funded projects. However infrastructure and construction companies are a source of massive corruption as there are massive kickbacks and bribes in government procurement contracts. Recently I was shocked to read that a major billion dollar loan from the IMF to Bangladesh to build a major river bridge was cancelled due to corruption. Montreal-based SNC-Lavalin, one of the world’s largest engineering and construction companies, has acknowledged making improper payments to agents to win contracts on two projects. An internal probe resulted in the resignation of its CEO and two other senior executives. Note this bridge over Bangladesh’s biggest river Padma would have led to huge developmental gains as millions of people in isolated districts could be connected to the urban centres.

World Bank cancels $1.2 billion Bangladesh loan

The World Bank has canceled a $1.2 billion loan for construction of a bridge in Bangladesh, saying it has credible evidence of corruption involving a Canadian engineering company. The global lending agency said it did not receive a satisfactory response from the Bangladesh government after it raised the issue of corruption last year. It said in a statement Friday that it has evidence pointing to “a high-level corruption conspiracy” among Bangladesh government officials, executives of Canadian engineering and construction giant SNC-Lavalin, and private individuals in connection with the planned 6.5-kilometer (4-mile) Padma Multipurpose Bridge Project.

However as usual corruption has put a spanner in the works with the loan getting cancelled and funding from other sources getting suspended. Democracy has failed to rein in corruption as institutions and systems remain weak. Despite indulging in blatant looting , politicians and bureaucrats along with their crony business partners fail to get punished. Even in India which has the most mature democracy, there is hardly a big leader or businessmen in jail. Despite flagrant corruption in 2G Telecom and Commonwealth scandals, the perpetrators are out in bail and forming laws in parliament. In other countries like Pakistan and Bangladesh where institutions are even weaker, there is absolutely no danger of getting punished, leading to even bigger more blatant violations.

Indian Government shamelessly defends Corrupt Officials, Black Money despite claims to the contrary

The Indian government has been rocked by a series of corruption scandals which have been documented in this blog. The scandals have not only touched the political sphere but also the stock markets. The scams have not stopped with new ones being reported almost on a daily basis but no convictions have happened. The corrupt and the guilty keep on going about their business as usual as the Indian ruling party thinks it can cure corruption with words. The Congress Party in its annual meeting had said that removing corruption would become its top priority with expeditious proceedings against public officials in graft cases. However the law has been criticized as having too many loopholes even before being passed. Even the actions of the government does not inspire much confidence. The Commonwealth Games which was a much publicized national corruption scandal has yet to see a single prosecution. The guilty officials have all managed to get bail with the Suresh Kalmadi, the scandal in chief, goes about his business as the powerful ruler of the Indian Olympic Committee. All that government has done, is remove him from the post of the Chairman of the Organizing Committee of the CG. Note this is already a dead body with the Games over a month ago. Note Kalmadi is a leading party member and despite his obvious corruption the government refuses to move against him.