DR SAMINA SABIR
RECENT report of Transparency Interna tional (TI) 2019 has ranked Pakistan on 120th number out of 180 countries ofthe worldintheCorruption Perception Index (CPI) comparedto 117thin 2018, thoughCPIis based on the assessment and perception of experts relating to governance and business institutions. The CPI has been constructed using 13 data source from 12independentinstitutions specializingin governance and business climate analysis. However, this report has rung the alarming bells that corruption is growing under the state headship of Excellency Imran Khan that is against his Party’s narrative of promoting merit and corruption-free Pakistan. Transparency International Report has highlighted that corruption is at its peak in the countries where money has been spent massively on election campaigns and government addresses the voice and problems of well-connected, influential and wealthy people. This reflects the lack of justice and security in these countries. If the government policies do not consider the needs and requirements of bottom tier group of people, then corruption increases in an enormous amount that is far beyond our expectations. There are few key factors that causes corruption. For example if the economic activities are highly monitored and regulated, the higher will be the influence of the officials in decision making andlarger will bethe corruption. Investors and entrepreneurs are willing to pay bribes and payments to uplift and avoid restrictions. Secondly, there exists a strong link between monetary policy and corruption. Ifthemonetary policy is well-regulated, less will be the black market and corruption will be less. In spite of aforementioned reasons, if the country dearth the economic and political freedom, corruption increases drastically over the time. The current government’s top priority is to implement institutional reforms to make public administration and public offices efficient becausethese offices often provide fertileland for the growth of corruption. But it should keep in mindthatineffective,lamentand uncertain regulations and reforms increase level and growth of corruption. Nonetheless, a low level of income or wages or salaries of employees boosts corruption.Theirweak financial position allows them to accept bribes that reinforce the roots of corruption and enrich it. Bottom line is that low salaries are not only causing the corruption but it alsoleadstoinefficiency of public office as an outcomeofpoliticalovercrowding.Totacklethis problem, government should increase its direct tax revenuesand raisethe sensitivity of payment to performance for officials. Moreover, it is well-known argument that povertyleadsto corruption and prosperitytreats corruption. It is reported that 24 per cent of population lives below poverty line in Pakistan and 39 per cent of population is suffering from multi-dimensional poverty. Economic theory says that corruption impacts economic activities which in turn leads to poverty.Moreover corruption hinders economic growth by discouraging domestic and foreigninvestment, distorts market, decreasing the cost of doing business, reducing entrepreneurs,loweringthe quality of physical and social infrastructure, falling tax revenues, distracting public talent into rent-seeking activities and changing the structure of public expenditure. Moreoverincomeinequality alsoincreases corruption. Tax evasion, incompetent administration and special exemptions supporting the wealthy and well-connected people lowers the tax baseand progressivity oftax system,thereby increase income inequality which reduces economic growth and exacerbates poverty. If government wants to reduce corruption, it has to eradicate poverty first through social and welfare programsthatwill ultimatelylessenthe gap between richandthepoor.Besidesallthese,there is an immense need to pay attention on the development of social sector of the economy in term of better education and health in Pakistan. Countries with improved education and health sector havecountedlessevidences ofcorruption. For exampleNordic countries are atthe top of ladder in CPI with Denmark (87), Finland (86), Sweden (85), Norway (84) and Iceland (78) taking five of the top 11 places. Nordic countries are considered a benchmark in case of corruption free economies owing to better social sector development, social security and good business environment. An increase educationinterm of quality andincrease in the proportion of women in every sector of economy particularly in government positions as well as in federal and provisional assemblies can curtail corruption exponentially. —The writer is Assistant Professor, Institute of Economics, the University of Azad Jammu and Kashmir Muzaffarabad
