corruption

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We all want to be able to say, “This is the house my father owns.” This dream is floating all over the world. Pitrus Saab, early resident of Khuda Ki Basti 3.

I recently visited Khuda Ki Basti 3, a low-income housing development 2 hours away from the city centre of Karachi. I first learned of Khuda Ki Basti (”God’s Settlement”) and the incremental development model when I met Tasneem Siddiqui of Saiban during a research project in 2005. I was ushered in an office by Mr. Siddiqui’s assistant (his only staff at the time) where he sat at his desk, shrouded by mountains of papers and books. Though he was extremely busy and seemingly understaffed, he made himself available to speak to me. Mr. Siddiqui is the sort of person who inspires people. Not because he is a great story teller with heart warming anecdotes that leave you with a good feeling. No, he is inspiring because he takes a no-nonsense approach to a problem that is colossal and overwhelming both in its scale and by its nature.

Without a piece of land on which you can raise your family, sleep at night and call your home, it is difficult to find the stability you need in your life to propel yourself forward. No one should be denied the opportunity to attain this stability and prosperity. Almost all people understand this. However there are very few people who will roll up their sleeves and try to get something done about it. This is especially true in an environment like Pakistan where public officials are a part of the problem, not solution. (Pakistan was ranked 134th out of 180 countries by Transparency International’s 2008 Corruption Perceptions Index - which is not a good ranking.)

My report recognized that, without government cooperation, there is no method of scaling any successful models in housing. However, it also acknowledged the reality – that public sector solutions are usually public relations rhetoric within a larger political game. As a result, government-initiated projects do not often reflect the reality of the issues. For example, as has been documented by Saiban extensively, the age-old government approach of creating elaborate “sites and services” schemes in Pakistan ends up inflating the cost and price of housing far beyond the reach of base of the pyramid, and yet we continue to hear of initiatives based on this model.

In his inauguration speech at the National Assembly on 29th March 2008, Prime Minister Yusuf Raza Gilani announced his coalition government’s agenda, including a plan to build one million homes annually targeted towards the lower income sector. Such grandiose plans that are removed from the reality of the current and historical housing reality are not uncommon - especially when they come during times of crises (in this case both economic and political).

Tasneem Siddiqui is known internationally for his work in low-income housing - he has been the recipient of the Aga Khan Award for Architecture, The Ramon Magsaysay Award for Government Service and nominated for several others. What is somewhat disheartening is that even today, despite his reputation and the successes (KKB has been replicated in three areas of Karachi and currently in the process of development in Lahore) of the incremental development model, government cooperation (in the form of subsidized land) remains the biggest bottleneck to solving the housing and squatter settlement crisis in Pakistan.

Though consultation with Mr. Siddiqui and Saiban is often part of protocol during various government-led initiatives, they have still not been able to get their model officially adopted. A Saiban employee told me that while officials praise Saiban’s efforts and achievements in the field during meetings and conferences, off-the-record discourses usually involve an official asking very plainly “Meray liye faida kahan hai?” (“Where is the benefit for me?”). It is easy to see how anyone with good intentions might be discouraged. But as the perseverance of Mr. Siddiqui, his colleagues at Saiban and of the residents of Khuda Ki Basti 3 demonstrated, determined ideals will get you long way.

In my next blog post, I’ll talk about how two of the earliest residents of KKB 3 and its very model taught me the meaning of patient capital. For now I’ll end on a note that nags at the back of my mind whenever I think of the achievements of Mr. Siddiqui in such an onerous environment. How much is the success of a movement dependent on its figure head? We at Acumen Fund like to talk about the sustainability of our advocacy for social change, but when it comes down to the nitty gritty, how do you go about succession planning for revolutionaries – especially when it is their reputation and clout that opens doors in such a dramatically politicized environment like Pakistan?

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One fall evening in New York City, a small group of Acumen 2009 fellows got together at a small restaurant called the Istanbul Grill. The conversation quickly turned controversial (ice cold beers loosened our tongues) as the group discussed the multi-layered issue of corruption. Here is a brief recap for you.

Our class is composed of people from different parts of the world and we started off by contrasting the prevalence of corruption from the point of view of a common man. In India and Pakistan, corruption exists in all strata of society and is in your face. However in the US, one often hears about corruption only in high office or at very senior levels in corporations. An average American can live his life without actually ever offering someone a bribe.

Some of the fellows opined that bribery in India was a kind of efficiency tax and that most enterprises had factored this into their cost of operations. Others stated that bribes, regardless of scale, were immoral and should not be tolerated.

Things got interesting when we discussed gray areas. Let’s say, your company in India, frequently imports and exports raw materials and finished goods. To navigate the maze of export/import regulations and to save time, most companies hire clearing and forwarding agents. These agents charge a fee for handling paperwork, customs etc in order to get your product through the docks. The transaction is straightforward and your company gets a receipt. Your company’s accountant is happy because there is a receipt/invoice and this expense will pass an external auditor’s review. Everything is okay and life goes on, except for one little detail that gnaws at your conscience. You know that containers don’t slide through shipping docks without a little lubrication. Did you just outsource the dirty act of bribery to an agent? Hmmmm. Technically, you didn’t. You paid a fee and received a service. The agent can do anything he wants with the money. It’s not your problem. You saved time and were productive in some other part of your business.

You can argue that these things happen only in the developing world where there are millions of agents that help you deal with bureaucratic governments. Well, from a moral standpoint, how is this different from a salesperson that wines and dines clients on an expense account, just to win a contract? Yes, there are policies to limit the expenses, but why support such a corrupt policy in the first place? Why do companies on the FORTUNE 100 list pay loads of money to lobbyists (aka agents) who then take politicians on junkets and golfing weekends?

I believe that most people are part of a silent majority that participates in these institutionalized forms of corruption. Since the corrupt act is outsourced and once removed from us, we convince ourselves that our behavior is moral. However, morality, often quantified and viewed as an absolute, seems to be a trait that should be measured on a sliding scale.

A fascinating article by Marianne Betrand and Sendhil Mullainadhan reignited my memory of our discussion and forced me to write my first blog entry!

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