China, India take graft bull by the horns

Each year, agencies such as Transparency International rank countries according to their levels of corporate and political corruption. Invariably, the countries where such agencies are located - Europe and North America - score highly while countries like China and India are shown to be high on corruption and low on honesty.

China has been ranked 100th in this year's Corruption Perception Index of Transparency International, down from 80th in 2013. The 20-spot drop is in sharp contrast to the ongoing massive anti-corruption campaign in China. Over the weekend, Zhou Yongkang, one of the former top Chinese officials, was arrested and expected to face trial for corruption.

China's slide on the index doesn't mean it has become more corrupt. Since it is a perception index, the more corruption is exposed the more corrupt officials will be punished and the lower the index will fall.

True, the series of corruption cases exposed could affect the ruling Party's image. But the index only reflects how determined China's leadership is to end corruption. Only by resolutely fighting corruption can the Party and government improve governance. Top leader Xi Jinping has initiated an excellent cleansing drive in the bureaucracy and shown exemplary courage in taking action against so many corrupt powerful figures. And there is little doubt that China is changing as a result of his vigorous moves.

India is 85th in this year's Corruption Perception Index, up from 94th last year. Indian Prime Minister Narendra Modi has promised to end the culture of "black money", for which he seems prepared to lower taxes to "reasonable" levels and do away with laws that are unnecessarily restrictive in today's world.

There indeed are officials both in China and India who are super-greedy. But the United States and much of Europe get high marks only because many activities seen as illegal in Asian countries are treated as perfectly legal in the West. For example, in India there is a limit to how much a candidate can spend on his/her election campaign. But to reach voters, who could add up to 3 million for a parliamentary election, major candidates may have to spend several times the legal limit. In the US, there is no such limit - a candidate can spend hundreds of millions of dollars on an election campaign. So an act considered corrupt or illegal in India is totally legal in the US.

In the two largest Asian countries, government officials' salaries are very low relative to prices of goods and services, leaving room for corruption. As Lee Kuan Yew said in India in the 1960s, the post-independence government sharply increased the powers of officials while sharply reducing their salaries. As a result, corruption increased.

That the civil service sector in Hong Kong is well paid and honest is no accident - the same is true for Singapore. Had Hong Kong and Singapore followed India's example and reduced the salaries of government officials, they wouldn't have ranked so high on the honesty and transparency index. Therefore, governments in Asia need to ensure the salaries of officials are at levels that provide them with a sense of security, and thus prevent them from indulging in corruption just to live a reasonably comfortable life.

If the rule of law is improved, and laws are made simpler and realistic, China and India both will score highly on the honesty and transparency index. And only a comprehensive restructuring of the system and changes in laws can help eliminate corruption in the two countries.

If Hong Kong and Singapore can be examples of administrations more honest than most in Europe and North America, there is no reason why the Chinese mainland and India cannot be the same.

The author is professor of geopolitics at Manipal University, India.