SUMMARY of “Barrier to progress (Corruption)” Umar Strath, January 20th, 2024
The article explores the relationship between corruption and economic stagnation in underdeveloped countries, with a focus on Pakistan’s state-owned enterprises (SOEs). Corruption is often used as a populist slogan by politicians, creating a narrative that serves as a convenient scapegoat for developmental failures while allowing politicians to evade accountability. The author highlights the nexus of self-interested parties benefiting from normalized and unchecked corruption, including public servants and NGOs funded to combat underdevelopment. The case study of Pakistan’s SOEs, such as PIA, Railways, and Pakistan Steel Mills, reveals a staggering combined loss of Rs200 billion in fiscal year 2022-23. The financial losses are attributed to political patronage and nepotism, where job placements are influenced by political affiliations rather than merit. The article emphasizes that corruption is not only a financial issue but also results in moral and ethical degradation, perpetuating a cycle of corruption within these organizations. Pakistan’s options to compensate for the deficit involve severe repercussions, such as budget cuts or increased taxation, both adversely affecting essential services and economic growth. The article concludes that corruption is a central barrier to progress in Pakistan, deeply embedded in its economic fabric and undermining development at every turn.
Easy/Short SUMMARY:
The article discusses the impact of corruption on economic stagnation in underdeveloped countries, focusing on Pakistan’s state-owned enterprises (SOEs). Politicians often use corruption as a convenient scapegoat, allowing them to avoid accountability. The case study of Pakistan’s SOEs reveals a massive loss of Rs200 billion, primarily attributed to political patronage and nepotism in job placements. The article emphasizes that corruption is not just a financial issue but also leads to moral and ethical degradation, creating a cycle of corruption within organizations. Pakistan’s options to address the deficit, such as budget cuts or increased taxation, have severe repercussions on essential services and economic growth. In conclusion, corruption is identified as a significant barrier to progress in Pakistan.
SOLUTIONS of The Problem:
Strengthening Anti-Corruption Measures
Implement and strengthen anti-corruption policies and institutions to curb corrupt practices within state-owned enterprises.
Merit-Based Job Placements
Promote merit-based job placements in SOEs, ensuring that appointments are based on qualifications rather than political affiliations.
Transparent Recruitment Processes
Establish transparent recruitment processes that discourage political interference and nepotism, fostering fair and accountable hiring practices.
Whistleblower Protection
Enact robust whistleblower protection laws to encourage individuals to report corruption without fear of retaliation, promoting a culture of accountability.
Enhanced Oversight and Auditing
Increase oversight and auditing of state-owned enterprises to detect and prevent corrupt practices, holding accountable those involved in financial mismanagement.
Public Awareness Campaigns
Launch public awareness campaigns to educate citizens about the detrimental effects of corruption on economic development, fostering a sense of responsibility.
International Collaboration
Collaborate with international organizations and seek assistance in developing effective strategies to combat corruption within the country.
Ethics Training for Public Servants
Provide ethics training for public servants to instill a sense of moral responsibility, promoting ethical conduct within government organizations.
Legal Reforms
Introduce legal reforms to streamline and expedite the prosecution of corrupt individuals, ensuring swift justice and deterrence.
Civil Society Engagement
Encourage active participation of civil society in monitoring and advocating against corruption, creating a collective voice against corrupt practices.
IMPORTANT Facts and Figures Given in the article:
- In fiscal year 2022-23, Pakistan’s SOEs reported a combined loss of Rs200 billion.
- The financial losses in SOEs are attributed to political patronage and nepotism in job placements.
- The author highlights the ethical degradation accompanying corrupt practices within organizations.
- The staggering sum of Rs200 billion could fund universal health coverage in Pakistan for two years.
- Corruption diverts critical resources from essential public services like healthcare, undermining key developmental goals.
- Corruption is identified as a central barrier to progress in Pakistan, embedded in the nation’s economic fabric.
MCQs from the Article:
1. What was the combined loss of Pakistan’s SOEs in fiscal year 2022-23?
A. Rs100 billion
B. Rs150 billion
C. Rs200 billion
D. Rs250 billion
2. What is identified as a central barrier to progress in Pakistan according to the article?
A. Political rhetoric
B. Corruption
C. Lack of resources
D. Inefficient state-owned enterprises
3. What does the author suggest as a solution to curb corrupt practices within SOEs?
A. Increased taxation
B. Budget cuts
C. Strengthening anti-corruption measures
D. Political interference
4. What is the primary factor contributing to financial losses in SOEs, according to the article?
A. Outdated technologies
B. Subpar business practices
C. Political patronage and nepotism
D. Lack of qualified personnel
5. What could the staggering sum of Rs200 billion alternatively finance, according to the article?
A. Infrastructure development
B. Universal health coverage for two years
C. Education initiatives
D. Defense budget increase
VOCABULARY:
- Nexus (noun) (نگی:): A connection or link between different groups, people, or things.
- Scapegoat (noun) (قربانی): A person or group unfairly blamed for the mistakes or problems of others.
- Patronage (noun) (استحسان): The power to control appointments to office or the right to privileges.
- Nepotism (noun) (عیاشی): The practice of favoritism shown to relatives, especially in business or politics.
- Haemorrhage (noun) (رگ کا بہاؤ): A sudden and severe loss of blood, or in this context, a significant financial loss.
- Empirical (adjective) (تجرباتی): Based on, concerned with, or verifiable by observation or experience rather than theory or pure logic.
- Quid Pro Quo (noun) (ایک خدمت کا بدلہ): Something given or received for something else; a favor or advantage granted in return for something.
- Elusive (adjective) (دقیانوسی): Difficult to find, catch, or achieve.
- Opportunity Cost (noun) (مواقعتی قیمت): The loss of potential gain from other alternatives when one alternative is chosen.
- Macroeconomic (adjective) (بڑی معیاری): Relating to the whole economy, rather than particular industries or individuals.
- Compensate (verb) (تلافی کرنا): To make up for something unwelcome or unpleasant by exerting an opposite force or effect.
- Vicious Cycle (noun) (کرسی): A sequence of events in which the undesirable or unpleasing leads to more of the same.
- Stifle (verb) (دبانا): To restrain or stop oneself from acting on a feeling.
- Undermines (verb) (کمزور کرنا): Lessen the effectiveness, power, or ability of, especially gradually or insidiously.
- Ethical (adjective) (اخلاقی): Relating to moral principles or the branch of knowledge dealing with these.
📢 Attention Please!
We appreciate your commitment to acquiring knowledge through our summaries. Please be reminded not to remove the attribution label affixed to this article. It is crucial to acknowledge the source and the effort invested in creating this summary. We discourage any unauthorized distribution without proper credit. Thank you for your understanding and cooperation. 🔍
⚡ Explore More Summaries, Solutions, and Vocabulary Meanings!
💡 Join our WhatsApp Channel for timely and comprehensive summaries of the latest articles, along with well-crafted solutions and helpful vocabulary meanings. Click the link below to join now:
🔗 Dawn Article Summaries
WhatsApp Channel Link
https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y
dawn.com
Barrier to progress
Umar Strath
IN the discourse on economic stagnation in underdeveloped countries, corruption often emerges as a recurrent theme. Politicians, adept at exploiting socioeconomic fault lines, have wielded the concept of corruption as a populist slogan.
This narrative positions corruption as a convenient scapegoat for a nation’s developmental failures, allowing political figures to sidestep accountability. While politicians bask in the ease of inaction, corruption, normalised and unchecked, benefits a nexus of self-interested parties. This includes public servants enriching themselves illicitly, as well as NGOs continuously funded to combat the very underdevelopment perpetuated by this corruption.
State-owned enterprises in Pakistan provide a critical case study in understanding the complexity of the corruption-economic development nexus. SOEs are frequently criticised for their inefficiency. However, this critique seldom goes beyond surface-level analysis to interrogate the root causes of these inefficiencies. Is it due to outdated technologies, subpar business practices, or other factors? The convenient but simplistic answer often points to political interference, effectively sweeping the real issues under the rug.
In fiscal year 2022-23, Pakistan’s SOEs, such as PIA, the Railways, and Pakistan Steel Mills, reported a staggering combined loss of Rs200 billion. This financial haemorrhage can be attributed, in part, to deeply entrenched practices of political patronage and nepotism in these organisations. It is an open secret that job placements often hinge on political affiliations rather than merit, with positions either promised by parliamentarians as a quid pro quo for votes, or filled by individuals wielding political influence, regardless of their qualifications or the existence of job openings. These practices aren’t just ethically dubious, they also serve as lucrative ventures for those in power both within and outside these organisations — sell jobs, make money.
The fallout from systemic corruption extends beyond financial losses.
Such a landscape paints a grim picture of accountability, or rather, the lack thereof. While concrete empirical data might be elusive, the widespread belief that jobs are essentially ‘sold’ in these SOEs speaks volumes.
The financial cost is just one side of this issue. The moral and ethical degradation that accompanies such practices is equally alarming. Individuals hired through these corrupt channels are likely to perpetuate the cycle, engaging in further corrupt activities, such as manipulating procurement processes, unreported revenues, and inventory falsification. This results in a scenario where the entire operational framework of these SOEs is compromised, leading to their systematic downfall.
Confronted with the daunting task of compensating for the Rs200bn deficit incurred by SOEs, Pakistan faces a grim set of choices. The most probable solutions — budget cuts and increased taxation — come with their own severe repercussions. In a country grappling with poverty and limited resources, budget cuts imply a direct reduction in essential services to the populace, effectively subsidising the costs of corruption at the expense of the needy.
On the other hand, increasing the tax burden on an already strained population results in a vicious cycle of reduced disposable income, diminished savings, and lowered consumption — a basic macroeconomic spiral that further stifles economic growth.
To put this into perspective, the staggering sum of Rs200bn could alternatively finance universal health coverage for two years in Pakistan. Given that health is a primary indicator of development in all indices, the opportunity cost of corruption becomes starkly evident. This allocation of funds to cover losses due to corrupt practices directly undermines key developmental goals.
Thus, it becomes increasingly clear that corruption is not just an issue but a central barrier to progress. The example of the SOEs is a mere snapshot of a larger, more systemic problem. The fallout from such systemic corruption extends far beyond financial losses, eroding the ethical backbone of these institutions and perpetuating a culture of inefficiency and mismanagement.
This cycle of corruption, financial loss, and punitive fiscal policies not only stifles economic growth, but also diverts critical resources from vital public services like healthcare, which are essential for national development. Hence, corruption in Pakistan is not a mere by-product of political rhetoric; it is a tangible barrier to progress, deeply embedded in the nation’s economic fabric, undermining its development at every turn.
The writer is a senior researcher at The James Hutton Institute.
Published in Dawn, January 20th, 2024