Yet another research conducted by Global Financial Integrity (GFI), a US-based non-profit research body, finds least developed countries like Nepal are losing much more in corruption practices than what they receive through development aid annually. The study found that developing countries are collectively losing US $20-40 billion annually through corrupt acts such as bribery of public officials, equivalent to 20-40 percent of their annual official development assistance (ODA). Thus, no region or country in the world seems immune to the ravages of corruption.
Over the years, Nepal has taken a nosedive in Transparency International´s Corruption Perception Index (CPI). It slipped eight places from 146th last year to 154th position in 2011 and was ranked the second most corrupt country in South Asia. A GFI study estimates Nepal has lost US$ 9.1 billion from 1990 to 2008 in illicit financial flows triggered by corruption, smuggling and counterfeiting, eight times the ODA Nepal received in the period. Nepal is losing big in illicit financial flows, misallocation of resources and poor service delivery.
The Commission for the Investigation of Abuse of Authority (CIAA), a constitutional anti-graft agency, is a unique entity in South Asia. Regionally, no other country has an anti-corruption agency like CIAA with the mandate of an ombudsman, investigator and prosecutor. But surprisingly, Nepal continues its slide down TI’s list: Bhutan, India, Bangladesh and Sri Lanka, all without powerful anti-graft bodies like CIAA, are rated as less corrupt than Nepal.
Unlike India´s much-contested Lokpal and existing Central Bureau of Investigation, the CIAA enjoys extensive mandate to investigate and prosecute major branches of the government. But as has been clear over the years, anti-corruption laws and institutions alone are not inadequate to check unless they are backed by strong political will. The CIAA, despite being a powerful agency, has been rendered toothless as predatory political executives have kept it without its office bearers for almost six years now.
The CIAA has filed dozens of high-profile corruption cases against politicians, bureaucrats, police generals and others at the Special Court. The Special Court Act 2002 has a six-month deadline for decision on corruption cases. But several high-profile cases have been pending in court for years. The Special Court from January 2006 to July 2008 scrapped high-profile corruption cases of illegally earned properties on grounds of ´statute of limitations´, thereby setting a terrible precedent. Demotivated by this, the CIAA did not dare charge-sheet even a ‘small fry’, leave alone the ´big fish´, for illegally earned property in the last three years.
Traditionally, the ´big fish´ in Nepal have benefited from judicial clemency while the ´small fries´ fall in the dragnet. Except two high-profile individual cases of corruption, our judiciary has almost completely failed to prosecute bigwigs in political corruption deals like Lauda Air, Chase Air and LC scandals in the last two decades. The special court had acquitted 10 high-profile persons including a -then minister in Lauda scam citing inadequacy of evidence. The case was held in abeyance for seven years after the CIAA filed it in 2001 to look into graft worth Rs 389 million.
Protracted judicial process and corrupt judicial mechanism are also boosters of corruption in Nepal. As the Minster for law and reform recently made public, several judges offered him ´bribes´ for their appointment as justices at the apex court. The minister may himself have been a beneficiary of the corrupt judicial system; that´s probably why he did not dare disclose those who tried to grease his palms.
The other impediment to curbing graft in Nepal is poor institutional integrity. Global Integrity Report rates Nepal´s integrity as ‘weak’ with a score of 67. The integrity reform agenda has never figured among government’s policy priorities. Since 1990s, we tried to empower one particular state institution while completely overlooking reforms in others. The past offers us some painful lessons. Unless we introduce far-reaching reforms in national integrity system, there will not be much of a dent on the systemic corruption in government machinery.
National integrity system is a compact of key institutions like legislature, executive, judiciary, police, anti-graft bodies, media, private sector and civil society, among others. The concept of a single national integrity system places state organs in a coherent institutional framework. Thus, our inability to fight corruption partly owes to policy deficiency in strengthening national integrity system.
Successive governments could not tie up national integrity concept with policymaking. This imbalance resulted in rampant corruption. Countries with effective integrity system look at corruption as a ‘high risk, low reward’ endeavor whereas countries having weak integrity systems like Nepal perceive corruption as ‘low risk, high reward’ deal. This makes the punishment of corrupt offenders less likely. Therefore, the anti-corruption policy within effective integrity set-up needs to focus more on preventive rather than on curative aspects of the malaise.
In many countries, integrity reform is being applied as diagnostic treatment for corruption and poor governance. Hong Kong and Singapore introduced sweeping integrity reforms in 1970s and 1960s respectively. In these countries, graft is perceived as a high-risk but a low-reward undertaking because of which they have the highest corruption prosecution rates in entire Asia. In both these city-states, the government apprehends and severely punishes corrupt individuals regardless of their official position and political orientation.
To the contrary, both the civil servants and politicians in Nepal regard graft as a low-risk but high reward activity because of weak national integrity, poor disciplinary control in civil service and graft-savvy political system. Comparison of prosecution rate in both Hong Kong and Singapore with the rates in other countries shows that a corrupt civil servant or politician there is 35 times more likely to be detected and punished than their counterparts in other Asian countries, including Nepal. Therefore, rising trend of corruption in Nepal can be interpreted as an offshoot of the policy pitfalls and low risk of detection and punishment mechanisms.
Until only six years ago, Indonesia was considered one of the most corrupt countries. But in just six years, Corruption Eradication Commission of Indonesia has been able to reach a 100 percent conviction rate against top officials in all major branches of government. Political leadership effected institutional reforms and gave considerable investigative powers to the commission with provision of rigorous pre-testing of every prosecution case before it is filed at a highly efficient anti-corruption court.
When anti-graft body, the court and the government collaborate on ´zero tolerance´, progress can be made in tackling corruption in just a few years. The policy framers and opinion makers in Nepal must come to an understanding that corruption cannot be fought by ´stand alone reform´ strategies. Thus, the government should formulate national integrity plan as a long-term strategy as an urgent policy need. This will reinforce overall integrity system and help sustain the fight against corruption and bad governance.
We must understand that the problem of dealing with systemic corruption in Nepal is poor integrity and lack of political will to enforce the laws Nepal already has in place. Without a bona-fide political commitment at the highest corridors of power, tackling corruption, as always, will remain a big challenge for us.
The writer is Deputy Director of Good Governance Program of Pro Public
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