By Clare Melford, CEO of IBLF
It is often said of India that whatever is said about it, the opposite is equally true. And returning from a recent series of meetings with business leaders in Mumbai, Delhi and Bangalore, I am struck by just how true this is.
India has a fast growing and increasingly open economy, yet it can take 30 years for a legal case to come to court! It has a vigorous, world-leading IT sector and yet a closed – and in some segments primitive – food sector. It displays a strong culture of education and saving, yet almost 30% of the population is illiterate and it suffers double the rate of childhood malnutrition of sub-Saharan Africa.
Corruption is to be found at the heart of many of the challenges India faces, from the teachers who don’t show up for work to the officials who steal the payments destined for the very poorest, to the rotting food that never makes it to market as the money to build the cold storage facilities disappears.
Recently, corruption has risen to the top of the national psyche. There has been national outrage about the handling of the 2G mobile spectrum “auctions”. An outspoken activist Anna Hazare has mobilised huge numbers of the public to protest at what is seen as government foot-dragging on implementing anti-corruption measures. A website – ipaidabribe.com – is encouraging people to report all the instances they are asked for bribes in their daily lives. And a group of eminent business, academic and other leaders (some of whom I had the privilege to meet this week), have written two open letters to the government urging them to take greater steps to reduce the endemic rent seeking.
Corruption, or the fear of being accused of it, has now brought the business of government to a standstill, with no ministers willing to take decisions lest those decisions later be unfavourably scrutinized by India’s vociferous and free press. When one takes the oil out of the engine, the engine seizes up.
While in the short run this inertia is driving the business community to distraction, there are 3 big reasons to be optimistic about India’s chances of beating this curse.
1. India is a democracy, and a real one at that. Despite Winston Churchill’s apparent ridiculing of the idea that an independent India could manage a democracy, Indian governments have taken office on winning an election and quietly left it when they lost. One of the advantages of a democracy is that status quos can be challenged and the populace can kick out the rulers with whom they are dissatisfied. So in fact the seizing up of government out of fear of being accused of being crooked is a sign of the power of the people.
2. India has a free and vigorous press that can sniff out and shame wrongdoers. Coupled with a reasonably impartial (if slow) judicial system, this has lead to some recent convictions for corruption.
3. India has a world-class technology sector. There is exciting potential to remove human intervention from processes via technologies such as mobile banking, unique identity numbers and online tendering – and hence eliminate the possibilities for corruption.
However I have also heard these three factors used by those in positions of influence as justifications for why cleaning up the system could wait!
“We have democracy and a free press, we have the tools we need to clean things up when we need to, but right now our focus has to be on maintaining our growth and lifting people out of poverty” is something I have heard more than once. This is the same logic as saying cheerily “don’t worry, we have insurance if the house burns down” whilst lighting a bonfire in the basement.
Well, as growth begins to slow the public dissent increases and government grinds to a halt. The house is burning down and the time for cleaning things up is now.