When graft corrupts the heart of a nation

ariel nepomuceno_1“THE time to guard against corruption and tyranny, is before they shall have gotten hold on us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered.”—Thomas Jefferson

Corruption is a difficult and cumbersome dilemma of any nation. It’s rooted from the fundamental political and social  history of the country’s major institutions.  Its direct negative effects on economic development are obvious and undeniable.

According to the Asian Development Bank, corruption is commonly defined as the misuse or the abuse of public office for private gain.  Bribery occurs when a gift, favor, payment or monetary consideration is offered, made, sought or accepted to influence a business objective. In several countries where bribery and corruption is illegal,  significant penalties, including prison sentences, are imposed. These illicit activities may involve government officials and personnel, private companies or even individuals, and may be committed through third parties.

Interestingly, corruption comes in all shapes and sizes. It can involve bribes, influence peddling, fraud, embezzlement, theft, extortion and tampering or falsification of records. For instance, bribery is commonplace in the grant of government benefits; contracting and procurement of goods and services; payment of taxes and imposts; licensing and permitry; acceptance of gifts and hospitality; payment of facilitation fee to speed up government action; and  issuance of regulations or rules to favor one business over another.  These nefarious transactions can happen inside and outside Philippine jurisdiction.

On the other hand,  theft and embezzlement in the public sector normally occur in the area of government  assets that range from minor stealing of office equipment or supplies to massive erosion of  funds from the treasury,  with personal bank accounts of government bureaucrats getting heftier day by day due to unlawful and shameless deposits of  tax proceeds, licensing fees  and other unimaginable amounts which they normally receive in the course of their work.

In the political arena, corruption is well entrenched in the enforcement of election laws, especially in the field of campaign contributions, passage of critical legislation facilitated by graft-ridden lobbyists; and patent conflict of interest situations confronting some government officials. There is hardly any difference between the interest of their respective government offices and that of their private businesses or enterprises.

Limited controls

Unfortunately, gaps and limitations in financial control, audit and accountability systems encourage this kind of behavior. Some institutions would have this, but the existing political culture does not allow or encourage compliance.

Cause of corruption

However, there can only be corruption if there are those who continuously corrupt.  The private sector has a very big contribution to this hounding problem.  Some companies and business enterprises are so results-driven that they also do unethical shortcuts; illegally transact with government by paying kickbacks; extending nonmonetary benefits in exchange for favorable business outcomes; and meeting their key performance targets.  Earning profit is not wrong nor is it immoral.  It becomes one when everything, be it illegal or unethical, is offered at its altar.  Public greed feeds on private avarice and vice versa.

What causes corruption?  Both academic and sociopolitical research attribute this phenomenon to our civil servants’ demoralization and poor work habits that flow from very low salaries, less or nonexistent career-progression opportunities. In turn, this fact engenders patron-client relationships that develop and entrenches at a very fast pace. Additionally, the sheer lack of financial-control mechanisms; nonenforcement of  government offices’ code of ethics and internal rules; unbridled or uncontrolled grant of discretion to manage budgets; structural weaknesses  of watchdog institutions; and long, ineffective court processes have all led to the unwritten rule that when everyone does it, it must be acceptable behavior.

While international conventions and even local laws in most of the countries around the world have outlawed and criminalized bribery and corruption, this malady persists like a deeply invasive virus.  The effects are deadly. And deadly is the word that describes how bribery and corruption impacts on economic progress.

Huge collateral damage

When corruption becomes a systemic feature in the fabric of any country’s life, the government and its personnel get distracted from its duty and  the performance of its mandate to the people.  It wrongfully  focuses on activities that will result to  personal gain and enrichment rather than producing and enforcing policies that promote a healthy investment climate; predictable and consistent rules on entry  and maintenance of businesses; respects and preserves of sanctity of contracts and property rights; establishes a strong judicial and enforcement regime for commercial and transactional violations; consistent application of local and national rules on land use and classification, permits and taxes; and  abolishment of  unreasonable legal restrictions in trade and commerce. Leveling the playing field sans bribes, gifts or personal favors should be the norm and not just a hollow promise.

Undeniably, systemic corruption turns off foreign-exchange markets,  funding institutions, investors, global trading partners  and the market, in general. Most often than not, foreign governments stop giving aid or support to corrupt regimes. And the poor gets the brunt of its economic, not to mention political and social costs.

Current battle

President Aquino made antigraft and corruption the centerpiece of his government in 2010.  Daang matuwid was the battle cry, and his justification was ’pag walang corrupt, walang mahirap. His pledge to free the country from all forms of corruption was supplemented by his drive to enforce laws, such as the Revised Penal Code, the Anti-Graft and Corrupt Practices Act and the Code of Ethical Conduct for Public Officials.

He made good appointments in the Supreme Court and other courts;  strengthened and supported the Office of the Ombudsman and the Sandiganbayan in order to send a strong message that he means business when it comes to the issue of prosecuting, trying and punishing grafters. In the past few years, charges have been filed against corrupt government officials, and some popular and high-profile politicians have also been imprisoned. In his private and public speeches, he has consistently and openly chastised and ridiculed people whom he believed do not possess integrity and ethical values.

Moreover, the international community and anticorruption groups lauded the President’s efforts at improving the country’s governance image by taking steps to create a competitive, fair and transparent environment for investors and entrepreneurs. Legislative, fiscal and monetary reforms have also been instituted to enhance said initiatives. Efforts have been shown to better the business-regulatory environment.

Long road

However, much is still to be done.  Fiscal incentives should be further developed and operationalized, tax administration should be made better and the private sector enlarged and supported, among others. Key amendments to the restrictive economic provisions of the Constitution remain to be an action item. More important,  the enforcement capabilities of the agencies tasked to monitor, check and stop graft and corruption should still be intensified.

Modest victory in a protracted war

From 2000 to 2008, the Philippines has been doing miserably in terms of the Transparency International corruption index and was lagging behind other emerging Asian economies. However,  since 2010, the country has shown tremendous improvement in this space.  The Philippines ranked 85th out of 175 countries in the Corruption Perception Index (CPI) for 2014, an improvement from the 94th spot last year.  According to Transparency International, the country received  a score of 38 on a scale of 1 to 100.  The CPI scores countries from 0 (highly corrupt) to 100 (very clean).  But it is  too early for celebration, and there should be no room for complacency.  The Philippines still occupies  the lower two-thirds of 175 countries with scores below 50.

The journey has just begun and all the gains in curbing graft and corruption should be sustained regardless of who occupies Malacañang next year.  Our fate lies in our very hands.



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