The Church vs Mammon

It is now official. Archbishop Desmond Tutu in an article in the Financial Times of April 4th, says that it is now just as easy for the rich man to pass through the eye of the needle as a camel. There is no contradiction between faith and mammon. You no longer have to live a life of austerity to prove your faith. The Russian oligarchs, the Arab rulers, the hedge fund managers, Donald Trump  and our very own Vijay Mallya, I am sure, will be greatly relived.

I have to confess that I have never seen the contradiction, since the Church ( or the Temple, Synagogue, Mosque, Pagoda or the Gurdwara or other places of worship ) never had any issue accepting donations from the rich. In many religions the tithe or its equivalent is compulsory. You could be a robber baron or just a plain robber, and  still be a man or  a woman of faith  if you donated to the Church. Over the centuries the Church has grown rich through donations from kings and nobles, who were responsible for terrible massacres and rape and pillage as a result of their  conquests.There has always been a nexus between  the rulers ( whether they are kings or politicians ) and the priests ,  who work out an arrangement of back scratching to suit their purposes.

It is not my intention to discredit religion, since it does play a very important role in setting some ground rules for civilized behavior, even if most of them are not carved in stone or  in a golden book . It is also  something  you turn to when you are desperate and have no where else to go.

However over the centuries religion has been hi-jacked by its guardians or interpreters who insist that religion is too complicated for it to be understood by the layman.They become the  enforcers and have  over a period of time enjoyed  the power and privilege that they refuse to let go. There are stories from every religion whether it is the Popes who had mistresses or the Brahmin priests who took advantage of the temple maidens or the Mullahs who extort their flock that jihadism is the only way to salvation , where they will have  unlimited earthly delights in the form of vestal virgins.The priests have created heaven and hell and they have become the gate keepers.

Every religion has parables as to how the various prophets always favored the poor against the rich. I remember my grandmother telling me one about the founder of the Sikh religion Guru Nanak. In one of his frequent travels he was invited to have a meal and to rest  at the house one of the richest man in the province, yet he chose to spend the night  in a poor man's hovel and share his meal. When one his followers questioned him, he is supposed to have picked up the food offered by the rich man in one hand and the poor mans offering in the other. He then squeezed both. Out of one flowed blood and out of the other milk.

Just as the the kings and emperors built huge palaces, the priest have encouraged  their believers to contribute to building larger and larger edifices to glorify God. Look at the holiest of holy places of all religions and you will see the amount of money which has been lavished over the centuries.The religious institutions are among the worlds wealthiest institutions.  And yes while some of them use  part of  the wealth  to benefit society such as  building  hospitals, schools and other institutions, but at the same time large amounts are siphoned off by the minders or in the case of the Catholic Church to defend misdeeds by the priests. A lot more could be done in using the daily collections by these places of worship for the betterment of the society or prohibit the people from making financial or other rich offerings. Raise money only for a specific cause instead of building ever grander edifices.

While the paths might be different, one thing all religions seem to agree on is that God is within you.  If so why do we need to have such ostentatious places to  worship ? I quote below from Kabir one of the mystic poets  who preached the universality of religion.

Are you looking for me?
I am in the next seat.
My shoulder is against yours.
you will not find me in the stupas,
not in Indian shrine rooms,
nor in synagogues,
nor in cathedrals:
not in masses,
nor kirtans,
not in legs winding around your own neck,
nor in eating nothing but vegetables.
When you really look for me,
you will see me instantly —
you will find me in the tiniest house of time.
Kabir says: Student, tell me, what is God?
He is the breath inside the breath.”

Corruption

Recently we were with some friends and their two sons who are in their mid-twenties. As always the conversation drifted to India and to the moral decay. This is similar to the conversation  we have when our two children come home for holidays as well. It is difficult not to talk about corruption in India when it hits you in your face every day, when you open the news paper, when you switch on the television set, when you drive your car and the policeman pulls you to the side for a make believe traffic violation. It is difficult to have hope when you see daily the politicians and bureaucrats get away with ripping off the country with the equivalent of million of dollars through Common Wealth Games scam, telecom scam, coal auction scam, defense contracts scams and so on. The media highlights these for a period but ultimately they get brushed under the carpet. After all how “how many angels can dance on the head of a pin” ?How many scams and scandals can you fit on a page or a television screen every night ?

From the young people's perspective who want things to change, it is hard to convince them that things will get better and the fact  that these are even being talked about is a good sign. It is difficult to explain to them that all countries go through this phase during economic development. The United Kingdom went through this. You have to read  Charles Dickens  to get an appreciation of the  rampant state of corruption including the judiciary. It was similar in the United States in Chicago, New York and other American cities in the early nineteen hundreds and into the thirties and the forties. It was not all Brideshead Revisited or The Great Gatsby.

However that was then.  It is hard for them to understand that even with modern technologies why is it so difficult to clean up the system. However with a population of one point two billion people and still growing, it is going to be a while for the society to cleanse itself.

In fairness, the government's intention has been well meaning and the funds allocated to meet  the basic requirements has been increasing substantially . However there is a vast difference between what gets allocated and what is actually spent. The development economists euphemistically refer to this as “leakages ". This is a polite way of saying that the money is being siphoned off to the pockets of politicians, bureaucrats and others who are involved in the implementation of these programmes. It is difficult to quote any precise figures but based on anecdotal evidence, the actual number which is actually spent cannot be more twenty five percent , probably  less. It varies from state to state .Some states do a much better job than the others. Even with that I am not sure there is any state which comes anywhere to achieving over seventy five percent implementation.

The question then arises as to what and how is to be done?

First and foremost accept that the fact that you will never bee able to eliminate corruption totally. No country has and no country will be able to regardless of what the government says. Let me give you a few examples of countries which are often quoted and who hold themselves to have high standards of governance.

The United States
The Economist March 15^th,2012
"Rod  Blagojevich, a former governor of Illinois….. was convicted last year of bribery, wire fraud and trying to sell a Senate seat. He is the fourth governor of Illinois out of the last seven to be convicted, and adds to the 1,828 public corruption convictions the state saw between 1976 and 2010. A report by the University of Illinois at Chicago estimates that corruption costs the state more than $500m ( small change by Indian standards )  a year. Two states had even higher numbers of appointees, government employees (and a few private individuals) convicted of public corruption: New York, with 2,522 convictions and California with 2,345 convictions. Of the largest states though, Illinois had the highest per person conviction rate, at 1.4 per 10,000 population. With little over 600,000 residents, the District of Columbia had a rate of nearly 17."

The United Kingdom 
The Mirror News April 2^nd 2012 
“Access on a plate: PM's secret lavish dinners with party donors
DAVID Cameron had a string of secret lavish dinners with party donors in the mansions of rich backers, it was revealed yesterday.The PM was under mounting pressure last night to come clean about ALL his private meetings with donors following fresh sleaze allegations.Labour said he had "incredibly serious" questions to answer after he was accused of covering up a series of meetings with disgraced former party treasurer Peter Cruddas and donors - including an event at the PM's country retreat, Chequers.

Former standards commissioner Sir Alistair Graham said Mr Cameron was "in danger of falling into the sleaze category" by not being straight about his links to big money donors”

Ever so often you have news items about British Parliamentarians raising questions in Parliament if you paid them a few hundred pounds. About Parliamentarians and government officials  fudging  expense accounts. Even the extend royal family has been dragged into scandals about money for access.Of late you had the Parliamentary committee investigating the close ties between the senior executives of News Corp and the Police.

France
In France allegations have been made against  the former IMF chief and who had been considered a potential candidate for Presidential elections for being involved with a prostitution racket.

Hong Kong

Closer to home ( at least for me, since I spent a greater part of my life there) in Hong Kong, the former Chief Executive Donald Tsang was accused of having accepted favors from business tycoons. Also the Independent Commission Against Corruption has initiated investigations against the former Chief Secretary ( effectively the number two after the Chief Executive ) and two of richest real estate tycoons in the world - the Kwok brothers. As an aside when I first reached Hong Kong the clean up process had just started by the then Governor Murray Maclehose, so I am disappointed to see that the clock is being reversed.

China

In China, I think I can sum it up  by quoting a line from a book review in the Financial Times  by Chris Patten, the last British Governor of  Hong Kong " the remark of the old Maoist, Deng Liqun in the 1990s that if the party bosses did not eradicate graft, they would lose the support of the people; but if they did, they would lose party members."  Sounds familiar does it not ? The present leadership is still struggling with it as was evident with the fall from grace of Bo Xilai a princeling in  Chongqing.

I could go on and on, but it is obvious that corruption prevails in every single country. However it is not as invasive as it is  in India. How do we resolve this and how do we minimize it ?

While some amount of corruption is explainable (not condoned) as money  needed to fight elections, lets legalize it as the United States has done, including using the Public Action Committee which is  nothing more than a vehicle used to target a component without the candidate actually spending money.

In India, the reason given to justify corruption among the bureaucrats is that their salaries are low, which is not true , either in absolute terms or the equivalent on a "cost to company" basis. Pay them the equivalent of the  private sector , as they do in Singapore and let them find their own accommodation, pay for their own health care, pay for their own clubs, their own transportation and so on.. Let them commute for hours as the private sector does, but pay them cash up front. If they then don't perform or are caught red-handed, nail them to the wall.

The issue here is not that the laws do not exist. The issue here is that of implementation . Ever so often the stars align, as they are presently and  you have a Chief Justice, a Comptroller And Auditor General Of India, and The Election Commissioner ,  supported by  their peers who take it upon themselves  to do the job of the government. Also you have an increasing number of  individuals who file Public Interest Litigation cases to highlight scandal after scandal.What is needed is to increase the number of courts and also track the performance of the judiciary at the lower courts. Also have a time bound schedule for all cases.

It is difficult to expect  the political parties to take the lead ,because almost every single party is tainted. If the young princelings are serious about making a difference they should set an example and bar any one  with a criminal case pending against them from being given a legislative assembly  or parliament  ticket or making him or her a minister at the state or central level.

None of the above ideas are new and I am sure that there are a lot more out of the box ideas as to how corruption can be minimized. As Gurcharan Das said in one of his presentations, you will see major changes start to happen when the middle class reaches approximately fifty percent. In my opinion it will take a couple more decades where corruption will decrease and will reduce the impact on a day to day basis. Lets look forward to that day. I am not sure it will happen during my life, but I am confident that it will in my children's life time.

Go To Daddy

The Prime Ministers Office has issued a diktat to the Board of Coal India Ltd , a public limited company with domestic and foreign  shareholders to sign long term  feedstock contracts with power generators to provide coal regardless of whether it is able to mine it or not. If they cannot mine domestically they will be forced to buy overseas and if necessary to bear the losses. ( Upfront declaration - I own a few hundred shares of Coal India Limited). The power generators are among the top names in the industry. This is the height of absurdity.

Most of these companies bid very aggressively for setting up large power generating plants, based on power supply contracts. Some of them were also allocated captive coal mines. In addition some of them bought coal mines in Australia and Indonesia. Now they find that they cannot produce domestically for political or environmental reasons. Also countries such as Indonesia have insisted that the coal prices be priced at international prices and not be transfer priced. Accordingly these power companies find them selves in a financial tangle since they priced their supply contracts at a low price to get the green light.  So what do they do now ?They  go running to Daddy.

Daddy then tells Coal India Limited, the largest coal company in the world , whose staff keeps asking for more wages, and which is facing the same problem as the private sector in terms of increasing production to sign this contract..The independent directors of Coal India Limited refused to support it. Now with the orders coming directly from the President of India,Coal India  will effectively be subsidizing the the private sector power generators. Damn the shareholders.

A more effective way would be for the government  to give tax breaks or subsidize the power generators for the price difference between  domestic and international prices  and allow  them to  import the directly.. As Coal India's largest shareholder, it will also be foregoing dividends which will not be paid because of potential losses. Subsidize the companies  directly and let Coal India operate like a normal commercial organization, After all with all the subsidies which the government hands out every year, whats a few more thousand crores?