The study of Global Financial Integrity (GFI), a US-based non-profit research body, has found that least developed countries like Nepal are losing much more than what they receive through development aid annually. The study concludes that even developing countries are collectively losing US $20-40 billion annually through corrupt acts such as bribery of public officials. This amount is equivalent to 20-40 per cent of official development assistance (ODA) these countries receive annually. It evidences no region or country in the world is immune to the damages of corruption.

The World Bank estimates that corrupt transaction is globally valued at US $ 1 trillion dollars per year. It is approximately 3 per cent of the world income today. Another study of Transparency International states that corruption adds up to 10 per cent to the total cost of doing business globally and up to 25 per cent in the cost of procurement contracts in developing countries.

Vertical Slump

Nepal has taken a nosedive in Transparency International’s Corruption Perception Index (CPI) over the years. Nepal slipped eight points from 146th rank last year to 154th position in 2011 making herself as the second most corrupt country in South Asia. The GFI’s study estimates Nepal has lost US$ 9.1 billion from 1990 to 2008 as illicit financial flows triggered by corruption, trade smuggling and counterfeiting. This is nearly eight times more than the ODA Nepal received during this period. Nepal is falling prey to illicit financial flows, misallocation of resources and poor service delivery due to corruption.

The Commission for the Investigation of Abuse of Authority (CIAA), a constitutional anti-graft agency, is in place to check corruption in Nepal. Regionally, no country across South Asia has yet anti-corruption agencies like CIAA with mandate of an ombudsman, investigator and prosecutor. But what is more surprising is, Nepal still continues to plunge in corrupt practices when Bhutan, India, Bangladesh and Sri Lanka without powerful anti-graft body like CIAA are being rated as least corrupt.

Compared to India’s much-contested Lokpal and existing Central Bureau of Investigation, the CIAA enjoys larger mandate to investigate and prosecute major branches of the government. This paradox tells us that anti-corruption laws and institutions alone may prove inadequate unless they are backed by strong political will. The CIAA, despite being a powerful agency in the region, has fallen prey to predatory political executives which has been limping without its head for almost six years now.

One of the hurdles to fighting corruption in Nepal is poor institutional integrity. Global Integrity Report rates Nepal’s integrity as weak with 67 scores. The integrity reform agenda never figured in government policy priority. Since 1990s, we always tried to empower one particular state institution while completely overlooking reforms in other sectors. The past offers us some painful lessons. Unless we introduce far-reaching reforms in national integrity system, one-sector reform approach will not create much impact when corruption is a systemic part of the government machinery.

Past governments could not link national integrity concept with policymaking. This policy imbalance has resulted in rampant corruption and graft. Countries with effective integrity system look at corruption as a ‘high risk, low reward’ endeavor whereas countries having weak integrity system like ours perceive corruption as ‘low risk, high reward’ deal. This makes corrupt offenders less likely to be punished. Therefore, the anti-corruption policy within effective integrity set-up needs to focus more on preventive part rather than on curative aspect of the malaise.

Integrity Reform

As seen in many countries, integrity reform is being applied as a form of diagnostic treatment to corruption and poor governance. Hong Kong and Singapore introduced sweeping integrity reforms in 1970s and 1960s respectively. Graft is perceived as a high-risk but a low-reward undertaking because of which they have the highest corruption prosecution rate in entire Asia now. In both these city-states, the government apprehends and severely punishes corrupt individuals regardless of their official positions and political orientation.

But in reverse, both the civil servants and politicians in Nepal regard graft as a low-risk but high reward activity because of weak national integrity, poor disciplinary control in civil service and graft-savvy political system. Comparison of prosecution rate in both Hong Kong and Singapore finds that a corrupt civil servant and politician are 35 times more likely to be detected and punished than his counterpart in other Asian countries like Nepal. Therefore, rising corruption trend in Nepal can be interpreted as an offshoot of the policy pitfalls and low risk of being detected and punished.

Indonesia, until only six years ago, was one of the most corrupt countries. But down the years, Corruption Eradication Commission of Indonesia has been able to reach a 100 per cent conviction rate against top officials in all major branches of government. Political leadership effected institutional reforms and gave considerable investigative powers to the commission with provision of rigorous pre-testing of every prosecution case before it is filed at a highly efficient anti-corruption court.

Zero Tolerance

When anti-graft body, the court and the government collaborate together with ‘zero tolerance’, progress can be made in tackling corruption just in few years. The policy makers in Nepal must nurture a common understanding that corruption can not be fought by ‘stand alone reform’ strategies. Thus, as an urgent policy need, the government should formulate national integrity plan as a long-term strategy to reinforce overall integrity system to scale up and sustain the fight against corruption and bad governance.

We must understand that the problem of dealing with the systemic corruption in Nepal is poor integrity and problem of creating political willpower to enforce what Nepal already has in place. Without a real political commitment at the highest corridors of power, prosecuting the corrupt as always will remain a big challenge for Nepal.