There is one thing about corruption that is often ignored. It suppresses creativity, forces honest players in business and the economy as whole to ignore rules.
Uncontrolled, corruption has many multiplier effects that often lead nations stuck in a perpetual cycle of poverty and underdevelopment. Once it becomes a norm or a way of life, these multiplier effects have a way of replicating themselves to dangerous levels.
Corruption becomes a huge cancer on public finance and works in different competing ways. It is sometimes reflected in the desire not to pay taxes or tax evasion, kickbacks that drain the public purse to the extent that public infrastructure that is critical to investment collapses.
Social services such as health and education collapse. It also poses huge costs investment as businesses have to factor in corruption as one of its operating costs if they are to survive. The 10 percent line becomes internalised.
Productivity losses are consequent. It is a cycle. Any loss of productivity means low taxes can be collected. When MRA fails to meet targets, one key reason is that there are not enough taxes to collect. It’s plain simple. A thin cow has limits on how much milk it can give. You will need a clean environment to create a healthy cow to give you more milk.
Now the pressure is often put on that thin cow to give milk. It gets tricky when thin cows realise that bigger and fat cows are not milked enough or even milked at all because they corrupt their way out. Call this a tax equivalent of progression. Thin cows can also put in a good fight and at their level some tricks similar to thick cows. There we create similar cycles of corruption of different levels but the ultimate result is a full blown one.
Such vicious cycles are often reflected in the ease of doing business and corruption rating indices. They have two major effects in the world of investment promotion. Firstly, they scare away ethical foreign investors that want to come and make a genuine investment, profit and pay taxes.
Secondly, they attract a bunch of corrupt foreign investments that palm oil the system, dodge taxes and when enough is made they move out. Sometimes, they come back under different names. Seen from a local perspective, Malawi businesses are naturally compelled to take a similar route. Be ethical and remain out of business or be corrupt and be successful in your business dealings.
This is the problem we now have. Corruption has almost been normalised to the extent that it has become part of our psyche. It doesn’t matter whether it is in the public sector or in private business. A huge industry that one can call corruption thrives and remains the main reason why most parameters of progression are stagnant or getting worse. We could soon bear a tag of the “sick-man of Sadc“.
Post 1994 came with many expectations and creation of different institutions to safeguard public funds and governance. There was a new constitutional order with associated new laws creating different agencies whose shoulders were meant to carry pans of transparency and accountability. Development expectations were reflected into various national and sector specific strategies such as the Vision 2020, growth strategies and a proliferation of various civic organisations, some too corrupt.
The recent budget revision saw major cuts to governance institutions, dealing a blow to institutions whose power are in the law, but their independence very interesting.
As we reflect on implementing the Sustainable Development Goals and the MGDS III, a cardinal point remains that progression is derailed. The cost of doing business is high; it is difficult to create jobs. With a young population, this is scary and the waves of crime are some symptoms that we can no longer ignore.
While the national anthem highlights hunger, disease and envy as our major enemies, I sometimes hold questions. Maybe hunger and disease are what Maslow would call basic needs in his hierarchy. Envy is often psychological. The worst enemy is corruption. It kills hard work because everyone is looking for short-cuts and the result could be what we see every day. We seem to have accepted it.
I believe no national development strategy will ever work in our beautiful and peaceful country until that point comes. We have to reach a point where everyone, no matter how powerful they are, will think twice before engaging themselves in corruption. At the moment, no one really cares. It is scary reality. n