Europe

European Union is destroying democracy and promoting corruption. Any opposition to the EU is suppressed by successfully manipulating conservative economic ideologies and the symbolism of Europe.

Transparency International has published its first Europe-wide check-up on the robustness and resilience of nation’s anti-corruption systems. This report is a test of systemic strengths and weaknesses, not a compendium of the region’s worst examples of corruption. It shows politics, business and the wealthy make a potent mix, one that is undermining public confidence.

For some time, TI asserts, many people in developed countries have assumed corruption only really exists in the poorer corners of the world. This has bred complacency and, as fighting corruption has not been a priority, ‘there is much to be done to get the European house in order.’

But concern is growing among Europeans, TI believes. The fear is this complacency has allowed corruption to fester. As the recession and economic depression enters its fifth year, patience with politicians is wearing thin. This report is ‘a call to action’ for European governments to wake up to the realities.

TI has unsurprisingly found ‘huge variation’ across the continent. And its findings somewhat conform to stereotype.

Central and eastern European countries, and Portugal, Italy, Spain and Greece are sources of concern while the Scandinavians are leading in integrity.

Despite a ‘flurry of legislation’ since joining the EU, in Bulgaria and Romania scandals and impunity persist. In the southern European countries the report tells of ‘serious deficits in public sector accountability and deep-rooted problems of inefficiency, malpractice and corruption.’

But besides these general sources of concern, no-one comes out of this report as clean as a whistle.

Europe’s key strengths are in its laws preventing corruption, established oversight of public expenditure and the continents electoral processes. But its weaknesses lie in its politicians and the private sector.

The European Union glorifies itself as the representative of Europe, which greatly consolidates the economic and political potential of the continent. The development of the EU is always praised as a doubtlessly progressive historical process increasing the welfare of the Europeans and ensuring human rights and democracy.

However, broadly known economic data clearly shows that since the establishing of the European Union, the economy of its members has been weakening in relation to the rest of the world. The introduction of euro pushed the countries of Western Europe into a deep economic crisis; and, despite the fact that the European Economic Community has recently been the most efficient economic organization in the world, the European Union has already turned into a heavy burden for its citizens.

Political parties and businesses ‘exhibit the highest risks of corruption across Europe.’ TI’s report identifies two areas in particular of considerable concern. Two points where business and politicians meet: party funding and lobbying.

Extensive experience of some countries in Eastern and Central Europe suggests that the European Union promotes corruption in its members not only by the means of enormously puffing up the number of bureaucrats and creating countless opportunities for bribery via various funds and programmes.

For example, having just joined the European Union, Lithuania in 2004 became the most corrupt state in Europe.

The EU destroys all the democratic and legal institutions capable of limiting its powers and influence. By unscrupulously interfering into internal policy of its member states, the European Union undermines even the democratic responsibility of politicians, which always blame the EU in public for their own crimes and mistakes.

By the way, the European Union undermines human rights too. The members of the European Union are free of critcs from most international organisations; therefore, the arbitrary powers of politicians and bureaucrats towards ordinary people there have become virtually uncontrolled.

It can be seen clearly in Lithuania, where due legal process has become a privilege of the rich. According to public opinion polls conducted after joining the European Union, already about a half of the Lithuanians do not consider Lithuania to be a democratic state any more.

‘Europe’ is a positive and inspiring word not only for Europeans; therefore, although the EU represents only a part of the European continent, its bureaucracy is trying hard to monopolize the powerful symbol. EU bureaucrats exploit successfully the humble posture towards themselves of many non-EU states.

For unknown reasons, even Russia accepts not being considered a part of Europe although it occupies a big part of the continent. Apparently Russians do not notice that in this way they indirectly recognise their cultural and moral inferiority in the eyes of the whole world.

The propaganda of the European Union does not meet with any considerable resistance because the EU bureaucracy already controls not only Western, but also Central Europe, and a great part of Eastern Europe. By cynically manipulating economic ideologies, the symbolism of Europe, and the mythology of ‘the historical mission of the European Union’, EU ideology makers and propagandists successfully neutralise any external and internal opposition.

Out of the 25 European countries assessed only two do not have any binding regulations on political donations – Sweden and Switzerland. This ‘is a significant area of risk’ and while these two are the focus of TI’s criticism, the UK is not forgotten. The report identifies the lack of any upper limit on political contributions in Britain as contributing to the ‘on-going erosion of public confidence in the political process.’

Big money and big business in party funding are also ripe for abuse. The case of Conservative party former co-treasurer Peter Crudas is a prime example. He was secretly filmed claiming he could sell dinner with David Cameron and possibly the chance to influence policy for £250,000. The Bureau has uncovered the weight of donations to the Tory party coming from the hedge funds and financiers of the City. The taint that millionaires and the financial services industry have bought influence at the top of the party has dogged the Conservatives.

Europe’s political parties must work harder to ensure their funding is transparent. But this report declares that across Europe parliaments and governments must bring transparency to lobbying. Only six of the 25 countries assessed have any kind of regulation at all. Only two of them have lobbying laws, Poland and Lithuania, both of which have come in for criticism. Poland’s law is too vague, only requiring ‘professional lobbyists’ sign a register. Lithuania’s lobbying law is described by TI as ‘completely deficient’.

In a series of extensive investigations the Bureau has exposed sharp practice by British lobbying firms and uncovered claims by senior executives at leading firm Bell Pottinger that it could give its clients access to the heart of the British government. The UK is now considering some form of statutory register of lobbyists and their connections with politicians but campaigners and lobbyists have criticised proposals as inadequate.

The perception that cash buys you access at the expense of Europe’s electorate is pernicious. It is compounded when legislation designed to bring greater transparency to politics are threatened. In a report that touches briefly on specifics and discusses risk a great deal what is stark is that European governments all run the risk of being accused of corruption and malpractice. At a time when Europe is smoldering with discontent and distrust, without transparency in their dealings the wealthy mixing with politicians is pouring oil on the flames.

You can read the report here.

Australia

A world’s smallest continent, South East of Asia, and a country situated between the Indian and Pacific oceans.

Aboriginal tribes are thought to have migrated from southeastern Asia 20,000 years ago; first Europeans were British convicts sent there as a penal colony.

A commonwealth comprising the continent of Australia, the island state of Tasmania, two external territories, and several dependencies. The first British settlement, a penal colony at Port Jackson (now part of Sydney), was established in 1788. The present-day states grew as separate colonies; six of them formed a federation in 1901. In 1911 Northern Territory joined the commonwealth and the Capital Territory, site of Canberra, was created. Canberra is the capital and Sydney is the largest city. Population: 20,400,000.

A former British colony, now an independent member of the Commonwealth, constitutional links with Britain formally abolished in 1986; consists chiefly of a low plateau, mostly arid in the west, with the basin of the Murray River and the Great Dividing Range in the east and the Great Barrier Reef off the NE coast. Official language: English. Religion: Christian majority. Currency: dollar. Capital: Canberra. Pop: 19 913 000 (2004 est). Area: 7 682 300 sq km (2 966 150 sq miles)

Australia has been ranked the eighth least corrupt nation in an international ranking of 180 countries.

It has gained one place since last year, in figures released by Transparency International (TI).

New Zealand and Denmark were deemed to have the lowest levels of perceived corruption, while Somalia and Afghanistan had the highest levels.

IF, AS an Australian citizen, you perform an act of bribery offshore, you can be fined $1 million, jailed for 10 years and your company can be fined $10 million, which all sounds very proper except that nobody has ever been prosecuted.

Offshore corruption is suddenly on the agenda. Just as we recovered from the Stern Hu affair - where an Australian citizen working for miner Rio Tinto got 10 years' jail for corruption - BHP is being investigated over bribery allegations in Cambodia.

But you won't find Australian regulators doing anything here. The Rio scandal was uncovered by officials in China. The BHP case was started by America's powerful Securities and Exchange Commission.

We have the Commonwealth Criminal Code (2001), which opened up offshore jurisdictions to Australian regulators.

And it's true the fines were lifted to the million-dollar level just a few months ago - they used to be tiny - $66,000 for individuals and $300,000 for companies.

But unless you have someone enforcing the law, the bad guys go about their business undeterred. In effect, it means that if you have a brown paper bag of unmarked bills under a full moon on the beach at Far Away Island you don't really have to worry about the ''Australian'' regulator. As for the local regulator … they might just be coming down the beach to meet you.

It is logical to assume that if giant Australian companies are getting into trouble, then a host of smaller operators might usefully be monitored.

This is not conjecture; it's a safe assumption based on what has just occurred in the US where last year the Department of Justice revealed that the number of ''offshore corruption'' cases it is working on has tripled in two years. ''It's a remarkable increase in the volume of investigations,'' says Michael Ahern, executive director of Transparency International (Australia), an organisation that tracks offshore corruption.

The Corruption Perceptions Index is based on expert and business surveys to measure the perceived levels of corruption in the public sectors of various countries.

The Berlin-based organisation said countries whose infrastructure had been "torn apart" by conflict needed help from outside to prevent a culture of corruption taking root.

"The international community must find efficient ways to help war-torn countries to develop and sustain their own institutions," TI head Huguette Labelle said.

Overall, the 2009 corruption list is "of great concern," the organisation said, with the majority of countries scoring under five in the ranking, which ranges from zero (highly corrupt) and 10 (very clean).

The most corrupt nation on Earth remained Somalia, the impoverished and war-torn Horn of Africa state that has been without a functioning government for two decades, notching up a score of 1.1.

A decade ago Australia was the top-ranked ''clean'' country in the world by Transparency International. Today it has fallen to eighth place. It might come as a surprise to many people but Australia is one of the most corrupt countries in the world.

Australia's worsening record in offshore corruption relates largely to the Australian Wheat Board scandal in Saddam Hussein's Iraq, which involved government kickbacks.

But the ranking is likely to deteriorate further with the Rio case and - potentially - BHP'S ''Cambodia'' case, news of which broke only in recent days and relates to alleged bribery at a former bauxite operation.

The BHP case has prompted questions about both the significance of the event and the manner in which the corporation - for all its stated ambitions to be a top-class corporate citizen - disclosed the bad news at the bottom of a production report.

''Disclosure is crucial,'' says James Thier, of Australian Ethical Investments. ''Australians have a relatively good reputation in this area. The essential issue is the policy of the companies themselves, and it could always be better.''

Although recent events have pointed towards Asia and China, the global flashpoint for offshore corruption is in Africa, where the volume of mining and exploration activity has reached unprecedented levels. And Australians are coming up against other ''offshore players'', especially China, where attitudes to bribes can differ.

Australia might not score as well as we might like in the Transparency International tables or on the OECD's offshore bribery scorecard. In fact, at the OECD we are classified as having ''little or no enforcement'', along with such countries as Mexico and Turkey. But it's worth noting that under the OECD agreement - the 2009 convention on combating bribery of foreign public officials - China is not even on the list because it has not signed up.
 
Politicians wax fat with illegal perks provided by the ruling elite. While the average citizen remains ignorant to what is taking place, the alert observer can build a case against the institution of ‘party politics’.

Once more the Australian family is being put to the sword. The Rothschilds Group of Bankers, who own the ‘Zionist Banking Manipulators.’ (As they do every other Zionist Banking Manipulators Bank in every country in the Western World ) are going to up interest rates until people paying off mortgages are driven to the wall.

The men of straw who run the Australian economy(?) for the Rothschilds don’t care that usurious interest rates make it impossible for Australian marriage spouses to live together as a family.

For the last fifty-three years (when Ben Chifley died ) successive malpracticing Governments have stolen Home Ownership not only from the lower class but from the middle class. Circa 1986, a hike of interest rates to 17.5 per cent by Hawke ~Keating ~ Dawkins and Button saw many farmers kill their families before turning the gun on themselves ~ having lost the family farm which had been theirs for generations.

Some two million families have disintegrated since1972. Political Parties are made up of every type of bluebeard.

A ‘blue’ card is not necessary so we get paedophiles, lesbians and opportunists who delight in destroying families as it makes it easier to get at the children. (Take a lookat Queensland’s ‘foster’ families record )

We get people who receive $1 million after three terms and still ask poorer people for donations to pay their court costs! It is quite simple, as the record speaks for itself, we get arsehole after arsehole. The politicians who manage Australia for the Rothschild-‘Illuminati’ have destroyed some 2 million families by encouraging them to ‘invest’ in nefarious schemes then commence to bleed them dry.

It shouldbe noted here that a hike in interest rates does not affect politicians,bureaucrats and bank staff. In an Australian ‘democracy’ some are more equal than others. Also, as noted before, all politicians own rental property and have a constant need for tenants.
They have a sound interest in making sure home borrowers go broke.

African countries accounted for half of those in the bottom 20 of the list, including Angola which is now the continent's top oil exporter after emerging from a 27-year civil war.

But it was not just countries riven by conflict that saw their ratings slide. Italy, a member of the Group of Seven rich countries, came in at 63rd on the list, from 55th last year.

Fellow EU member Greece fared even worse, at 71st, slipping from 57th.

Seemingly winning the fight against corruption were Liberia - whose score improved from 2.4 to 3.1, shooting up 41 places to 97th - and Gambia, which went from 158th on the list to 106th.

Other significant improvements were registered by Norway, Qatar, Saudi Arabia, Montenegro and Malawi.

The United States inched up from 7.3 to 7.5 but dropped one place in the rankings to 19th. China's rating was stable at 3.6 but also fell seven places to 79th.

Russia continued to be very low down in the list, coming in at 146th place, although its score edged higher to 2.2 from 2.1.

Asia

Corruption in Asia continues to be a drag on growing economies, draining billions of dollars from economic development and triggering a public backlash in some places. Calls for reform are coming from the private sector and United Nations even as the region’s economic prospects improve.

When protestors took to the streets of Bangkok last year, calls were made for the Thai Government of Prime Minister Yingluck Shinawatra to address signs of growing corruption in Thailand.

A 79-year-old businessman pointed to rising costs of doing business, including bribes for officials.

“I am an industrialist. I cannot stand anymore because we have to pay under the table so much money," he said. "Before, all right you have to accept that before it was about five and ten per cent. But now it’s a minimum 30 per cent - minimum is 30 per cent."

Estimates for how much economic activity is lost to corruption are difficult to judge, but a recent study by the University of the Thai Chamber of Commerce concluded that over two per cent of national output or some $11 billion is likely to be lost to corruption this year.

The university said many from the private sector who were surveyed said they are paying more bribes to government officers and politicians to win government contracts.

Thai political economist, Pasuk Pongpaichit, says although there is evidence that indicates authorities are making progress in curbing lower level corruption, the slowing global economy means growing competition for lucrative government contracts.

"Globalization, the international pressure for Thailand to become more transparent is being felt and various government departments are responding to it. It doesn’t mean that things are going to happen very quickly," she said. "On the other hand, as the world economy is slowing down and the local business is become more competitive, you could see that on specific cases the rate of corruption may have increased because of the higher competition.”

Analysts say the Thai Government is already under scrutiny for spending more than $11 billion on water management infrastructure following the 2011 floods and a further $67 billion on rail and other building projects. Economists have also charged a $33 billion rice price support program for farmers is beset by corruption allegations.

Bandid Nijathaworn, a former central bank deputy governor and now president of the Thai Institute of Directors, says corruption in Thailand appears to be more of a problem now than 10 years ago.

"Corruption is a global problem," he said. "You see corruption appearing as headlines in many countries. So it has become a global issue both in national organization and individual country’s governments trying to tackle it. In the case of Thailand we are having a greater challenge because the problem seems to be worsening than maybe 10 years ago.”

Despite posting robust economic growth during the past decade, many countries in Asia still rank poorly on international anti-corruption indices.

A recent report by the U.S.-based Center for International Policy said that in China alone between 2001 and 2010, $2.74 trillion in illegal funds left the country, through criminal financial schemes, corruption, tax evasion or other illegal activities. For Thailand the figure stood at $64 billion over the same period. In India, the center of major ant-corruption rallies last year, the figure stood at $123 billion.

United Nations Office on Drugs and Crime (UNODC) regional anti-corruption adviser, Shervin Majlessi, says given Asia’s growing influence in the world economy, there is a greater need for oversight.

"Generally, speaking when you have this kind of fast economic growth we are witnessing in this region, it comes with the same challenges and opportunities in terms of corruption," he said. "The challenge is obviously there is more financial flows, there are bigger contracts, procurements, the opportunities for corruption to increase. So you need stronger anti-corruption systems and regimes in place."

In 2003 the U.N. passed a Convention against Corruption. In South East Asia, Burma, ratified the convention in December - the last to do so of the 10 member Association of South East Asian Nations (ASEAN).

UNODC’s Majlessi says for ASEAN governments the key is to implement the reforms set out under the U.N. convention.

"Now the whole of ASEAN is finally covered by this convention. So this is kind of positive news," he said. "There is a key challenge in the implementation of this kind of international norms and standards and that taken time including legal reforms, international reforms and most importantly political will to actually implement this kind of instrument."

The Asian Development Bank is also supporting ASEAN through a Corporate Governance Scoreboard to promote transparency in business.

Thai Institute of Directors' Bandid Nijathaworn, who oversees a new group of companies aimed at fighting corruption, says private sector involvement is also critical for anti-corruption efforts to succeed.

“I think the momentum is building and people and people feel that in order to address the corruption issue you need to look at both the demand side and the supply side of corruption," he said. "Usually companies are being looked at on the supply side of the corruption, so getting the companies together we hope to reduce the supply side of corruption.”

Analysts say the corruption fight needs to go beyond government law enforcement, and include non-government and private sector organizations.

The Open Knowledge Conference in Geneva attracted delegates from 55 countries, indicating that open, public data is indeed becoming a global movement around the world.

How is Open Data adopted in Asia, the largest continent of this planet where 60 per cent of the world’s population live?

Asia has some of the most advanced internet economies, as well as some of the least developed countries with hardly any access to information or information infrastructure, neither analogue nor digital.

At OKCon, 26 participants from 11 Asian countries were present, including Nepal, Kyrgyzstan, Tajikistan, and Russia. In this blog, I focus on selected East Asian and Pacific countries: New Zealand, Australia, Taiwan, Hong Kong, Japan, and South Korea (North Asian and Pacific nations); and Singapore, Malaysia, Thailand, Philippines, Vietnam, Indonesia, Cambodia, Laos, and Myanmar (South-East Asian nations). Getting reliable data from all 49 Asian countries would require much more research, and these countries are grouped together in the Worldbank Knowledge Economy Index.

Despite being grouped together in the Worldbank Knowledge Economy Index (KEI), these countries have vastly different economic rankings. New Zealand achieved the highest Knowledge Economy score, closely followed by Australia, Taiwan, Hong Kong and Japan, whereas Laos, Cambodia and Myanmar score lowest in all KEI categories (ICT, education, economic incentive and institutional regime, innovation). Other key indicators relevant for Open Data development are the Corruption Perception Index (Transparency International), the World Internet Statistics and the Democracy Index (EIU) as a measure for general governance and functioning of government.

According to the 2012 World Internet Statistics, the overall internet penetration in Asia is only 27.5 per cent, but this still means the Asian continent is home to more users than any other, with over 1 billion. Internet penetration across the listed countries ranges from 1 per cent in Myanmar to 88 per cent in New Zealand; again with a wide gap between North and South East Asia (except for Singapore with 75 per cent).

South East Asia has often been described as “information black hole” in scholarly research on national information strategies, with many governments restricting or denying access to information to their citizens, often based on the assumption that government information by default is a secret. Earlier this month, the government of Vietnam enacted the “Decree 72” which limits the use of blogs and social media to “providing or exchanging personal information”, and prohibits them from being used to disseminate news or even information from government sites. 

The law also bans content which could be “harmful” to national security or which opposes the government. This kind of restriction is based on the perception that governments own the information and can control its use, and that information-empowered citizens and businesses are potentially dangerous.

While North Asian countries, as well as New Zealand and Australia, mostly have Freedom of Information (FOI) laws in place (with the exception of Hong Kong); in South East Asia, FOI laws are more the exception than the rule. Even in the otherwise highly developed information economy of Singapore, there are many areas where the government argues that information needs to be kept confidential in the public interest, which explains why citizens cannot access and analyse data related to the size of assets in the Government of Singapore Investment Corporation (GIC), a sovereign wealth fund owned by the Government of Singapore.

Sometimes laws are in place, but they are not fully applied. In Thailand, the country’s Official Information Act (OIA) was enacted in 1997, but “the concept of freedom of information is totally new to both Thai state officials and to the people. Thai society thus needs some time to learn more about the Information Law. State officials have to understand the procedures of law enforcement better so that they know how to provide information services and disclose information to meet public requests. Meanwhile, people should recognize their right to know and know how to utilize the Information Act as a means of access to state information. 

Thai society should recognize information law as an essential part of establishing accountable and transparent government and as a crucial part of eventually building up civil society” (Quote by N. Seriak, Office of Official Information Commission). In 2000, the law was therefore amended to include strategic guidelines on how to promote and develop the acknowledgement of the Act’s content, its utilization, the mechanism and the procedures to utilize the Act to meet people’s right to access information. This example illustrates that the idea of open information also requires a new way of thinking about information, both for government officials and citizens.

Only 4 of the listed 15 countries are full democracies according to the EIU index – New Zealand, Australia, Japan and South Korea; they are also members of the OECD. The majority of countries in Asia fall into the categories of “flawed” democracies (Taiwan, Hong Kong, Malaysia, Thailand, Philippines, Indonesia, Cambodia), Singapore is a “hybrid system” and at the bottom are authoritarian governments such as Vietnam, Laos (lowest overall score) and Myanmar, which is now currently moving into another phase of political governance. In August this year, Myanmar officially ended censorship, thereby jumping up to 151st out of 179 countries in the World Press Freedom index.

There are few economic studies about the tangible and intangible value of open information, perhaps because the causality is not directly measurable, most of the time. On the other hand, it might be easier to analyse examples on the cost of non-open data, in hindsight of events where data was not available.

Africa

Corruption is a pervasive problem in both the developed and developing world. Corruption is a complex issue with a vast array of determinants and effects that are often context and country specific. Corruption affects many Africans on a daily basis.

This discussion provides a concise overview of corruption in Africa and outlines how this corruption constrains development, with solutions to the problem also.

In recent years, the problem has gained much interest due primarily to a series of high level corruption cases in industrialised countries, an increasing awareness of the cost of corruption throughout the world and the practical and economic changes many countries are undergoing.In Africa however, corruption is a development issue. In 2009, United Nations Office on Drugs and Crime (UNODC) Southern Africa Representative Jonathan Lucas labelled corruption as “a crime against development, democracy, education, prosperity, public health and justice - what many would consider the pillars of social well being."

Transparency International’s (TI) 2010 Corruption Perceptions Index (CPI), released in October 2010, identified Africa as the most corrupt region in the world. Sub-Saharan Africa is also one of the most under-developed regions on earth. While Governments commit large sums to addressing the plethora of problems hindering development on the continent, corruption remains a major obstacle to achieving much needed progress. It is therefore imperative that anti-corruption measures form part of Africa’s development agenda to ensure future growth and prosperity in the region.

According to Transparency International’s (TI) 2012 Corruption Perception Index (CPI), 90% of African countries scored below the symbolic 50 pass mark. This is roughly on a par with Eastern Europe and Central Asia. On average, Africa’s CPI score in 2012 was 33, which means corruption hampers business and the provision of decent public services. This is an improvement over last year’s average score of 29, which TI equates to widespread corruption. The bottom five countries in the index include two African countries, Somalia and Sudan.

The CPI report defines corruption as the abuse of entrusted power for private gain, in public and private sectors. Countries are scored based on assessments of the prevalence of bribery of public officials, embezzlement of public funds, kickbacks in public procurement, and questions about the effectiveness of public anti-corruption efforts. According to the report, conduct within most African countries in these areas leaves much to be desired.

The Berlin-based group’s 2010 list ranks six African nations among the 10 most corrupt countries of the 173 surveyed. These are Sudan, Chad, Burundi, Angola and Equatorial Guinea, with Somalia heading the list as the most corrupt nation of all those surveyed. These six may be the worst culprits on the continent, but the majority of African countries surveyed did not fare any better. TI scores countries on a 10-point scale, with zero being the most corrupt. Forty-four of the 47 African nations surveyed scored less than five on the index, indicating serious levels of corruption. The severity of Africa’s corruption problem is further evidenced by the least corrupt African nation, Botswana, only achieving a score of 5.8.

For the first time, Botswana entered the world’s top 30 countries perceived to be least corrupt, ahead of Spain, Estonia and Portugal. Cape Verde joined Botswana in the group of countries with a score above 60. The Seychelles (52) became the fifth African country with an index above 50, closely behind Mauritius (57) and Rwanda (53). Zambia and Ghana are two countries that have taken a tough stance against corruption which might translate into an improved CPI in the medium term.

TI’s 2011 Global Corruption Barometer indicates that African citizens believe corruption had worsened in the previous three years. Rwanda was the only African country where more than 50% of respondents believed corruption had declined in this time. In Kenya and Ethiopia more people believed corruption had improved than got worse.

The majority of countries at the bottom of the CPI have emerged from prolonged crisis, which highlights the strong detrimental effect of conflict on political and administrative institutions. Somalia, Sudan, Chad, Burundi, Zimbabwe, Libya, Congo Republic, DRC and Angola have the lowest scores for the continent.

The Arab Spring put the spotlight on public concern over corruption. Newly elected North African governments must entrench a culture of transparency and accountability in public office and regain trust. This will require establishing integrity in government institutions and involving the public much more to have them demand further accountability.

According to TI, national defence sectors face a strong risk of corruption. Defence and security establishments in North African countries in particular were considered barely accountable.
 
Table 5.3. Corruption Perception Index by Transparency International 2011-13

Country

Global rank 2012	CPI 2012	Global Rank 2011	CPI 2011
Botswana	30	65	32	61
Cape Verde	39	60	41	55
Mauritius	43	57	46	51
Rwanda	50	53	49	50
Seychelles	51	52	50	48
Namibia	58	48	57	44
Ghana	64	45	69	39
Lesotho	64	45	77	35
South Africa	69	43	64	41
Saõ Tomé & Príncipe	72	42	100	30
Liberia	75	41	91	32
Tunisia	75	41	73	38
Burkina Faso	83	38	100	30
Malawi	88	37	100	30
Morocco	88	37	80	34
Swaziland	88	37	95	31
Zambia	88	37	91	32
Benin	94	36	100	30
Djibouti	94	36	100	30
Senegal	94	36	112	29
Gabon	102	35	100	30
Tanzania	102	35	100	30
Algeria	105	34	112	29
Gambia	105	34	77	35
Mali	105	34	118	28
Ethiopia	113	33	120	27
Niger	113	33	134	25
Egypt	118	32	112	29
Madagascar	118	32	100	30
Mauritania	123	31	143	24
Mozambique	123	31	120	27
Sierra Leone	123	31	134	25
Togo	128	30	143	24
Côte d´Ivoire	130	29	154	22
Uganda	130	29	143	24
Comoros	133	28	143	24
Kenya	139	27	154	22
Nigeria	139	27	143	24
Cameroon	144	26	134	25
Central African Rep.	144	26	154	22
Congo	144	26	154	22
Eritrea	150	25	134	25
Guinea-Bissau	150	25	154	22
Guinea	154	24	164	21
Angola	157	22	168	20
Congo, Dem. Rep.	160	21	168	20
Libya	160	21	168	20
Equatorial Guinea	163	20	172	19
Zimbabwe	163	20	154	22
Burundi	165	19	172	19
Chad	165	19	168	20
Sudan	173	13	177	16
Somalia	174	8	182	10
South Sudan	…	…	…	…

The TI study found a high-to-critical corruption risk in defence sectors in 14 sub-Saharan countries. Angola, Cameroon, DRC and Eritrea face the highest risk of defence corruption, highlighting the legacy of conflict and weak governance. South Africa is the only country in the region with provisions for legislative oversight of the defence sector. Ghana and Kenya show some encouraging measures, including the existence of disciplinary measures against corruption. Tanzania’s professional training of UN peacekeeping forces may lower the risk of corruption on operations.

Public procurement also offers potential for corruption through embezzlement or waste of public money. TI estimates corruption and mismanagement in public procurement could be costing Kenya up to USD 357 million annually. In early 2013, the Kenyan government started looking into simplified monitoring tools and a central database of contract information to increase transparency in public spending. In Ghana, social auditing clubs track public tenders to watch for quality and effective spending.

The scientific nature of scales and scores may have little meaning to the people affected most by the corruption the figures indicate. An additional report published by TI in 2010, The Anti-Corruption Catalyst: Realising the MDGs by 2015, puts the affects of corruption in perspective. A bribe demanded by a teacher to enrol a girl at a ‘free’ elementary school could irreversibly block that girl's education and future opportunities. A hike in the local cost of drugs by newly elected parliamentarians whose campaigns were supported by pharmaceutical firms might put treatment out of reach of sick people, leaving them unable to work and earn a living. Amounts paid as bribes are often quite small, but the implicit costs are great.

The Anti-Corruption Catalyst report shows, through the statistical analysis of data from 42 countries, that where more bribes are paid, there is a lower literacy rate among 15 to 24-year-olds. A rise in reported bribery is also associated with higher maternal deaths in 64 states, regardless of a country's wealth or how much it invests in health. Data for 51 countries shows that people's access to safe drinking water falls as bribery increases. According to TI, reducing bribery has the same effect on improving access to clean water as increasing household incomes.

The effects of bribery and kickbacks in the education, water and healthcare sectors represent the implicit costs of corruption. These incidents transform corruption into a “regressive tax” on services that the poor cannot afford, making basic services unattainable. Thus, it is the poor and vulnerable who suffer most due to corruption as they are more reliant on Government services and public systems to satisfy their most basic needs. In addition to the bribes that are demanded of those who cannot afford them, corruption results in the deviation of funds intended for development and undermines Government’s ability to provide basic services. It also undermines the rule of law, feeding inequality and injustice, discouraging foreign investment, further impeding development.

A lack of transparency, integrity and accountability is related to economic under-performance and fetters progress toward poverty eradication in many developing nations.As the world’s most under-developed region, the barriers to development and poverty eradication that corruption imposes are costs sub-Saharan Africa can ill afford.

In addition to the implicit costs of corruption due to bribery, there are also hidden costs associated with corruption. The costs of a form of corruption termed “quiet corruption” by the World Bank, adversely affect the poor in particular. The World Bank’s Africa Development Indicators 2010 shows that civil servants' failure to deliver Government-run health, education or agricultural services, further jeopardises Africa’s long-term development.

This form of corruption, smaller in monetary terms and not usually involving powerful officials or large amounts of money, is particularly harmful for the poor. One example of this type of low-level corruption comes from Burkina Faso, ranked 98th in 2010’s CPI with a score of 3.8.RENLAC, the Burkina Faso anti-corruption network, identified a primary school inspector who used to arrange for teachers posted to rural areas to be transferred back to cities if they paid her small sums of money, thus depriving the rural poor of much needed teachers.

Low-level corruption in the education sector is of course not unique to Burkina Faso. In many African countries, teachers at Government schools stay away from class or do not take up appointments in remote regions. The results of this behaviour has devastating long-term effects, as children who are denied a proper education because of absentee teachers will suffer low cognitive skills and associated problems in adulthood. It is clear then that corruption in all its forms is a crime against development that blocks attempts at growth and poverty eradication. Corruption impacts most heavily on the poor and vulnerable members in society, but underdevelopment affects the future growth and prosperity of all people. Thus, fighting on behalf of the disempowered and ensuring Africa’s development means that the responsibility for dealing with corruption falls squarely on all, from Governments and donors to civil society and citizens.

Antartica

Antarctica is the world’s last unexploited continent, and the latest site of a global race over resources and status.

Antarctica is the coldest, driest and stormiest of all continents. It is almost forty times as large as Germany and is the only uninhabited continent. Even in summer (from December to February) 99% of Antarctica is covered in ice, up to 5000 metres thick in places. It is regarded as a natural archive of Earth’s natural history and has a major role in the global climate system and the marine ecosystems associated with the South Polar Sea.

Antarctica is the Earth’s southernmost continent, containing the geographic South Pole. It has no permanent residents, but a number of governments maintain permanent manned research stations throughout the continent. It is situated in the Antarctic region of the Southern Hemisphere, almost entirely south of the Antarctic Circle, and is surrounded by the Southern Ocean. On average, it is known to be the coldest, driest and windiest continent and has the highest average elevation of all the continents.

Antarctica’s population is very difficult to account for since the number is so small and varies during the year. Antarctica has a permanent human population of zero. Antarctica’s population is made up entirely of researchers and scientists from around the globe. About 1,000 scientific personnel live there during the winter and this population increases to about 5,000 during the Antarctic summer. Antarctica experiences summer while it is winter in North America and Europe so a lot scientists go to Antarctica during the Northern hemisphere’s winter.

For numerous countries it serves as an “open‑air scientific laboratory”, resulting in the discovery, for instance, of the hole in the ozone layer.

Over the weekend, China unveiled its fourth research station in Antarctica, where sovereignty is unclear and countries try to stake their claims on the area by building large research bases. The 1,000 square-meter (10,763 sq. feet) Taishan base, also known as “the lantern” because of the shape of its main building, sits near stations run by the US, Italy and South Korea.

The Taishan—which will be used to study geology, glaciers, and climate change and is equipped with aircraft designed for flying in snow and ice, according to state media—is part of a larger expansion of China’s polar footprint. Chinese spending on operations in Antarctic has jumped from $20 million a year to $55 million over the last 20 years as the country has conducted 30 voyages to the continent and builds a second icebreaker. If a fifth Chinese station is built next year, as planned, China will have quickly caught up with countries like Italy, Germany, and Japan, and will have only one fewer than the US or the UK. Chinese mappers have already named 359 sites on the continent. Here’s where China’s three previously built research stations are, compared with those of 29 other countries.

Electoral Fraud

Every one of us yearns to raise our status in society, but politicians entertain hopes of great magnitude. There are many men and women of principle in the world, but once they enter politics they just forget those principles they strived for, and constantly seek money, property, and power. Except a few politicians many do not care about their deteriorating reputation.

It is now an apothegm that any candidate standing for any elections in any part of the world would use all available ploys to influence voters. Invariably, many potential voters expect the handouts from the contesting candidates.

It’s natural to think of elections when we think of political corruption. People or organisations with their own agendas can skew voting. They may secretly give parties big donations. Or parties and candidates can buy votes instead of winning them.

But political corruption isn’t just about election rigging. It can lead politicians in office to steer away from good government. Their decisions can benefit those who fund them. The public interest comes second. Political corruption can divert scarce resources from poor and disadvantaged people. This is especially common in countries where democratic institutions are weak or absent. Private rather than public interests dictate policy.

This means an ethical line has been crossed. Governments can’t act freely and democracy can’t function. Our trust in politicians is damaged. We can turn away from involvement with how we’re governed. Then political corruption continues unchecked. The solution? 

India is a nation where over 30 percent of the population lives below the poverty line, and illiteracy is around 35 percent.

All political parties in India indulge in competitive politics. Their mission does not to make life better for the average person or banish unemployment. In certain states instead of promising to provide schools and households with basic amenities such as potable water and hygienic toilets, freedom from corruption, mitigate poverty, and improve the purchasing power of the people, the political leaders promise to provide colour TVs, electronic gadgets such as mixer-grinders, fans, and laptops, to voters who scarcely get electricity for more than four hours a day. Once these parties come into power they first inflate government expenditures, impose taxes, and then hand out enticing goodies instead of worthwhile goods; and that too only to the members of their party.

Electoral politics in India has a new dimension – arrest of voters for accepting bribe.

The Election Commission has arrested 20 persons in the ongoing elections in Karnataka for accepting money to vote in favour of particular candidates – a bailable offence. If the government accepts the commission's plea, offering or accepting money for vote would land people in jail (non-bailable offence).

It is unusual because, normally, a case of bribery is registered against candidates or their nominees for giving money to voters to use franchise in their favour. The voters, who receive money, are not touched as most of them were from economically deprived section.

The practice resulted in the accused going scot-free in the absence of evidence of someone having received the bribe for voting. "There had been no conviction for years for bribing voters," a senior election commission official said. The commission found that proving such a case in court of law was almost impossible.

The commission went for a tactical change. It decided to take action against voters also so that they could have a better case in the court of law and it could also deter voters from accepting money.

The decision was the fallout of the commission's finding that both the major political parties in Tamil Nadu - DMK and AIADMK - had given money and gifts to voters in the last assembly elections but was not able to crack the whip as evidence was not available.

The commission at that time had not taken any penal action against the voters thinking it would send a wrong message that it was targeting the poor and the deprived.

Now, the commission has taken a view to initiate action for deterrence and not harassment. "We are not going whole hog on getting cases registered against voters. It is being done just to send a message that accepting money for voter is a crime under the Indian Penal Code," the commission official said, who accepted that most of voters accepting money were poor. The decision is being implemented in Karnataka polls.

Another reason for the commission failing to stop the menace of bribing voters is the weak provisions in the law, which makes offering or taking bribe a bailable offence.

The commission wants the offence to be non-bailable and has made a request to home ministry to amend the Indian Penal Code. "As many as 18 state governments have agreed to the proposal," the official said and added that the ball was now in the court of the ministry.

The commission believes that if the amendment is enacted before next general elections it can become a huge deterrent in checking the electoral malpractice of money for votes.

Black’s Law Dictionary, the most widely used law dictionary in the United States, defines bribery as an act of offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or other person in charge of a public or legal duty.

On December 30, 2013, The Monitor carried news that US Federal authorities arrested a local politiquera Diana Castañeda in McAllen, Texas, United States, for paying voters in cash, beer and cigarettes during the 2012 primary and general elections as well as taking voters to buy drugs after they had cast their ballot. According to court records, Castañeda confessed that she was a politiquera for various candidates and that during the 2012 elections she was paid $125 by one candidate to get food for voters and to pay them $10 to $20 per vote. However, the name of the candidate that gave her the money was not listed in court records.

City agencies have seized over 2,064 litres of liquor in the past few days and recovered more than 63,000 bottles during the last one month – 61,500 were ‘quarter’ bottles, which are mainly meant for distribution.

Around 7,000 bottles seized on Tuesday were all of the quarter bottle size (180 ml).
 
A few MLAs revealed that liquor bottles are generally distributed a day before the polls. The police and excise department have seized over 63,000 bottles of alcohol in Delhi over the past month after seeing a record-breaking amount of illegally supplied liquor.

The illegal supply of liquor has crossed all records in the run-up to the Delhi assembly elections. 

“Quarter bottles are distributed among slum dwellers and in resettlement colonies. Politicians ask their workers to keep a stock of bottles at secret locations,” a sitting MLA said.

Delhi chief electoral officer Vijay Dev said the Election Commission has asked all the agencies to crack down heavily on the illegal supply of liquor in Delhi.

Politicians use subtle methods to distribute alcohol to avoid run-ins with the police.

“The voter is given a chit to be deposited with a selected liquor vendor to get alcohol. Many candidates also finance parties hosted by other people and distribute liquor in such parties,” said an excise official.

On March 28, 2013, as his indefinite fast against “inflated” power bills entered the sixth day, AAP leader Arvind Kejriwal alleged both Congress and BJP were winning elections through bribing voters and using muscle power. He told his supporters:

“This is because BJP and Congress are both worried as a different kind of politics is slowly emerging in India. So far they are used to winning on the basis of bribing voters, money power and muscle power but now the voters have awakened. The elections will not be elections but revolution.” 

In conversations with US diplomats, the son of India’s powerful home minister P. Chidambaram and an aide to a senior leader of one of the main coalition partners allegedly explained how the main parties in Tamil Nadu state routinely bribe voters to clinch close elections.

One allegedly said they had widely distributed envelopes containing 5000 Rupees in cash (£70) hidden inside voters’ morning newspapers.

The disclosures highlight the nature of electoral fraud in the world’s largest democracy, and its widespread acceptance. Indian political parties, in particular in the south, often offer televisions, refrigerators, and computers to voters to win elections.

American diplomat Frederick Kaplan, a principal officer in its Madras consulate, was surprised at how freely senior politicians apparently admitted paying bribes for votes.

In a cable dispatched on May 13, 2009, the last day of India’s general election, he explained the system to his colleagues in Washington: “Bribes from political parties to voters, in the form of cash, goods, or services, are a regular feature of elections in South India. Poor voters expect bribes from political candidates, and candidates find various ways to satisfy voter expectations. From paying to dig a community well to slipping cash into an envelope delivered inside the morning newspaper, politicians and their operatives admitted to violating election rules to influence voters. The money to pay the bribes comes from the proceeds of fund-raising, which often crosses into political corruption. Although the precise impact of bribery on voter behaviour is hard to measure, it no doubt swings at least some elections, especially the close races,” he wrote.
 
 “Weeks before the elections agents of the parties come to the neighbourhood with cash carried in rice sacks. They have copies of the voter lists and they distribute the money based on who is on the list.” The deliveries are made between “two and four in the morning, when the Election Commission is asleep,” he added.

One aide is quoted as revealing details of bribes paid by his boss. “It is no secret at all [he] paid 5,000 rupees per voter in Thirumangalam,” he said.

Prashant Bhushan, a senior lawyer who has led a crusade against corruption, said the cables revealed the “corruption of democracy” in India.

“These facts show the corruption and monetisation of the electoral process in India and therefore the corruption of the democracy in this country, where democracy essentially exists in a formal sense on paper, [but] effectively it is owned by those people who have money,” he said. “The money comes from all kinds of corruption which is rampant in India,” he added.

Businessmen

The current narrative is that all businessmen are cheats who evade taxes, indulge in bribery for gaining monopoly rights and bending rules, exploit labour, act contrary to national interests in a crisis and overall keep their selfish interests at the forefront

“Does anybody have a problem with me making provably false accusations about honourable people, just so my side can win?” -Alan Shore, from the television serial Boston Legal.
 
‘Provably false accusations’ is an aptly coined phrase to categorise heated exchanges in political entanglements; the question is, which side is everyone on? Most likely, taking a short cut and avoiding the hassle of a survey, the response that everyone is on Pakistan’s side will have universal acceptance. That being said, if this condition precedent is kept in the forefront always, debates on most issues become irrelevant. Hence, charged political scenarios are indeed mysterious.
 
Serendipitously, the only time there can be a disagreement on fundamental national issues is when one of the parties is misinformed about the facts; this essentially suggests that as nations mature, a single party system might be more efficient. This conclusion is supported by the observation that there is an apparent continuity of policies within mature democracies that have a two party system. Electoral arguments mostly centre around same sex marriage, abortion and similar key issues, while a consensus is always and quickly achieved on trivial matters like foreign policy. Perhaps someday Pakistan will also achieve this nirvana but for the moment let us focus on the economic side of the equation.
 
The prevailing conventional wisdom, irrespective of certain contrarian views, recognises that the private sector plays a primary role in the growth and maintenance of the national economy. The public sector is deemed inefficient in running businesses mostly due to political interference, hence privatisation of all state owned enterprises is propagated as a wise course of action. But whom do you sell to?
 
While foreign direct investment is useful for technology transfer, even in the west there are concerns about handing over national corporations to foreigners, especially of Chinese origin. Even if this paradigm is ignored, foreigners loathe investing in a country where domestic entrepreneurs are moving their investments abroad, or practice self-exile. Additionally, security concerns and continuing political noise combine to adversely impact investor perception of risk. At high country risk, foreigners inadvertently look for a higher return and a shorter payback period. The net result is that cash starts flowing out of the country faster than it comes in.
 
It is not, therefore, rocket science to conclude that domestic businessmen play an indispensable role in a free market economy. Keeping this in view, close cooperation between those who represent the domestic private sector, the businessmen and the political elite, appears prescient. The current perception created due to ‘provably false accusations’ from each side is however quite the opposite.
 
Since everyone loves to imitate the west, lessons therefrom indicate that cajoling and providing seamless and unflinching support to businessmen is a wise strategy for creating employment and enhancing capital investment. Even when the private sector makes a mess of things, the policy is to provide direct assistance from taxpayers’ money, under the pretext of corporations being too big to be allowed to fail. Politicians even go as far as modifying century-old legislation considered problematic for private business, notwithstanding the eventual consequences to the national economy. While the conspiracy theorist will quickly point out that this is because of the campaign funds doled out by the private sector to every party in power, this view essentially ignores the underlying parameters. If businessmen are responsible for the health of the economy and by default the nation, it is imperative that they have a say in the political edifice.
 
Trust perhaps is the key ingredient for this, perhaps uncomfortable, partnership. In successful free market economies the private sector, relatively or at least in theory, enjoys a free hand, largely shielded from the activism of politicians and the bureaucracy, and for these services or absence of services, takes charge of the social construct of society. Investment in projects, creation of employment, ensuring provision of necessities to the poor at affordable prices, supporting art and literature through corporate social responsibility, active philanthropy, grants for universities and beautification of the communities are all costs in a corporation’s financial statement. The thing is — there is no written contract for this arrangement; it is all about trust.
 
Frankly, the west is currently on uncertain tides; regulatory activism is hardly beneficial for maintaining this trust. Perhaps their private sector defaulted on the trust and should pay the price. However, there is a thin line between over and under regulation and private investment is a fair weather friend. Stricter controls on currency flow, which are coming back into fashion, may keep the currency home, but rather than productive investment it will move towards bubbles.
 
The older generations will recall a similar culture in Pakistan up until the 1970s. Back in those days, most universities were funded and a host of schools were trusts owned by leading business houses, investments in new technologies and projects were a regular feature and so on. What were the causes behind the distrust thereafter is not relevant but what is critical is that the majority of the business houses has, over time, dissipated or has not grown to requisite levels. The west has its Gates, Buffett, Bezos and many more; even the next door neighbours have a bunch of famous business houses. Pakistan comparatively lags behind. If the domestic private sector had flourished uninterrupted, would things be different today? If the answer is yes, then perhaps there is a need to revisit provably false accusations.
 
The current narrative is that all businessmen are cheats who evade taxes, indulge in bribery for gaining monopoly rights and bending rules, exploit labour, act contrary to national interests in a crisis and overall keep their selfish interests at the forefront. 

No wonder most businessmen shy away from investment opportunities with a long term horizon, subject to regulatory oversight. In the light of this narrative, policy decisions dependent upon the magnanimity of the business community are rather confusing. If businessmen are categorised as tax evaders, why is a reduction in corporate tax expected to bring about desired results? The expectation that the business community will play, after decades of marginalisation, a larger role in the much needed economic kick off, may be slightly misconstrued. If entrepreneurs have restricted movement and limited input in policy matters, it would be highly unlikely that they will rise.
 
If the public sector is categorised as inefficient or corrupt and the private sector is deemed selfish and dishonest, then the only option left to operate and manage all businesses is foreigners, which can hardly be in the best interest of the nation! By default, the rational choice is between the domestic private sector and the domestic public sector, and indications are that the current leadership is tilted towards the former.
 
Without deliberating on the appropriateness of the choice, which rightly is the domain of the elected representatives, expectations from the private sector need to be accompanied by credible actions that facilitate businessmen across the board. At the very outset, the narrative has to be revisited in line with the policy direction.

Businessmen are honest, pay all their taxes, facilitate employment and employees and are sincerely committed to investing in Pakistan, which is necessary for its economic growth and stability. Minus this change, the policy initiative will not translate into legislation and regulatory actions and the environment will remain hostile for domestic investment. The dream will remain just a dream.
 
Barring views on strategic assets, one has always believed in the veracity of the trickledown theory, which supports the view that businessmen, risk takers and entrepreneurs are crucial for the health of a nation and need to be given this recognition. For Pakistan to come out of its economic doldrums, everything must be done to facilitate the business community to rise. The only way the ability to play golf can rise is a miracle.

It has been suggested that private businessmen caught indulging in corrupt practices or bribing officials or making use of shoddy materials should be blacklisted and be barred from government projects for, say, 10 years and bigger instance of private businessmen cutting corners in public projects by colluding with corrupt officials should attract exemplary punishment—here it may be pointed out that provision already exists for blacklisting and for punishment.

Many people reading about the recent spate of business scandals in the USA may conclude that capitalism is a pretty dreadful system. We have long moaned and groaned about crooked Indian businessmen who inflate profits, hide liabilities, manipulate markets, and break a hundred laws. But the US scandals show that crooked businessmen exist everywhere.

This week, some of the biggest energy companies in the US such as CMS, Dynegy and Reliant admitted that up to 80 per cent of their electricity trades in California were bogus. They indulged in fictitious sales to one another to create the illusion of a boom in revenue. They also indulged in various dirty tricks (some of which could be criminal and lead to prosecution) to exploit loopholes in power regulations (like artificially creating power congestion and then getting paid to relieve it).

This showed there was nothing unique about the peccadilloes of Enron, the seventh biggest company in the world some months ago, that hid huge debts off its balance sheets and overstated profits to create an illusion of prosperity when in fact it was heading for bankruptcy. Enron was abetted by one of the celebrated Big Five of accounting, Arthur Andersen, which is now in the dock for criminal obstruction of justice. The most celebrated giants like General Electric and Boeing stand accused of fudging their accounts to show ever-rising quarterly profits. Microsoft, the biggest of all, is on trial for monopolistic behaviour. Pfizer, the biggest drug company, stands accused of manipulating drug prices, and last year, a cartel of drug companies were fined for trying to rig vitamin prices. Big oil companies are being investigated for rigging petrol prices.

Crooked behaviour is not uniquely Indian or American. It is inherent in human behaviour, and can reach great heights in a capitalist system. Now, market systems have enabled many countries to achieve stunning improvements in living standards that would have been considered impossible a century ago. Businessmen seek to enrich themselves, not society. But competitive, transparent markets force businessmen to compete on a level playing field, because of which the main gains of all their innovation and enterprise go to consumers. For the 500 biggest companies listed in Fortune magazine, net profit averages only 3.3 per cent of sales.

For that very reason, however, businessmen are constantly tempted to find ways to reduce competition and transparency to increase their profits at the expense of customers. This can take legal forms (lobbying, innovative book-keeping, exploiting loopholes) or illegal forms (bribes, fraud, rule-breaking).

No wonder, then, that so many people are utterly disgusted with capitalism and seek alternatives. No wonder they find the profit motive a morally unacceptable basis for ordering an economic system. When the main actors of such a system are self-serving, manipulative and greedy; when they fudge facts, make false claims and promises, bend the law in various ways and indulge in outright crimes, how the outcome be at all satisfactory? Answer: for the same reason that self-serving, manipulative and greedy politicians produce a satisfactory outcome called democracy.

The argument for a market system is exactly the same as for democracy. Winston Churchill once said that democracy is a very flawed system, but all the others are so much worse. The same is true of capitalism: it is a very flawed system but the others are so much worse. Enron hid its liabilities and exaggerated its assets. But do not all political parties hide their political liabilities and exaggerate their political assets? Many crooked business promoters promise investors the moon in order to raise money. But do not politicians also promise the moon to get votes?

Companies fudge their books and make inflated claims to mislead gullible investors. But do not politicians make inflated claims to mislead gullible voters? Businessmen claim to represent the national interest while feathering their nest (by, for instance, demanding high import barriers in the holy name of swadeshi). But politicians in a democracy also claim to represent the national interest while feathering their own nests. Businessmen indulge in bribery. So do politicians. Businessmen revel in black money. So do politicians. Businessmen hire hoodlums to beat up workers or ruin a rival’s business. Politicians too hire hoodlums to capture polling booths and sabotage rivals’ rallies. Businessmen intimidate and buy up rivals to reduce competition. Politicians too use intimidation and money to buy defectors.

There are many criminals in business. There are many criminals in politics too. The use of money, muscle and influence to sabotage rivals and competition is a feature of democracy no less than of capitalism. Why, despite all this, do we regard democracy as the best political system? Because it is grounded in choice for the ordinary man, and freedom to choose is a paramount virtue that makes other freedoms possible. In democracies, the ruler is chosen by ordinary citizens and voted out by them too.

Politicians do their best to subvert free choice through the use of money, manipulation and muscle. Yet the freedom to choose empowers ordinary citizens so much that, despite a thousand flaws, democracy turns out to be more desirable and beneficial than the most well-meaning autocracy.

Democracy creates a market for political goods. Capitalism creates a market for material goods. In both cases, the freedom to choose gives the ordinary man in the street greater power than the biggest political or economic giant. By shifting his vote, the ordinary citizen can oust the most entrenched politician, and by shifting his custom he can bankrupt the most entrenched company.

Lenin was logically consistent in refusing to allow freedom of choice in either political or material goods. What I find amusing is the notion of many democratic socialists that the people must be free to choose their own rulers, but cannot be allowed to choose what goods to buy; that political licensing is abominable but industrial licensing is moral. There lies the road to serfdom.