Citizens' Issues
Anti-graft lessons for Anna from Hong Kong - Part 1

Till the early seventies of the previous century, Hong Kong was much like India, a cesspool of graft and bribery, probably one of the most corrupt cities in the world. Hong Kong today has been transformed into one of the cleanest places in the world

Till the early seventies of the previous century, Hong Kong was much like India, a cesspool of graft and bribery, probably one of the most corrupt cities in the world. 

Graft pervaded every aspect of life—from womb to tomb. Firemen would not turn the water hoses on a burning building unless the owner paid them “tea money” or “heavenly grease” as James Clavell puts it in Noble House, his novel of Hong Kong in the sixties.

Ambulance crews would demand money before picking up sick people...  Even hospital ayahs asked for ‘tips’ before giving patients a bedpan or a glass of water. Hong Kong was the pits. A taxi-driver could even buy a monthly label to stick on the taxi and it would guarantee that there was no prosecution for traffic violations. 

A close ‘business’ association existed between law enforcement agencies and organized crime syndicates. All types of organized crimes, vice, gambling and drugs were protected. 

The sixties and seventies saw rapid economic change in the city state. Massive growth in population and fast expansion of manufacturing industry accelerated social and economic development. The government was unable to meet the insatiable needs of the swelling population. 

This provided a fertile environment for the unscrupulous. Many people had to take the “back-door” route simply to earn a living and secure other than basic services. Bribes became not only familiar to many Hong Kong people, but were accepted with resignation as a necessary way of life.

Corruption was rampant in the public sector. Bribes had to be offered to the right officials when applying for public housing, schooling and other public services. Corruption was particularly serious in the police force. Corrupt police officers offered protection to vice, gambling and drug activities. Law and order was under threat. Many in the community had fallen victim to corruption. And yet, they swallowed their anger.

See something similar around you?

In the early seventies, a new and potent force of public opinion emerged. People pressed incessantly for the government to take decisive action to fight graft. Public resentment escalated when Peter Godber, a corrupt expatriate police officer under investigation escaped from Hong Kong with a huge graft hoard of HK$4.3 million. The case proved to be the last straw.

 Godber’s escape unleashed a public outcry. Students spearheaded a mass rally in Victoria Park, protesting and condemning the government for failing to tackle corruption. Demanding prompt government action, protesters with slogans like “Fight corruption, arrest Godber” insisted that Godber be extradited to stand trial.

Sir Alastair Blair-Kerr, a senior puisne judge, was appointed to form a Commission of Inquiry into Godber’s escape., Sir Alastair pointed out that “responsible bodies generally feel that the public will never be convinced that the government really intends to fight corruption unless the anti-corruption office is separated from the police...”

In the wake of the Blair-Kerr reports, the then governor Sir Murray MacLehose proposed an independent anti-corruption organisation. In a speech to the Legislative Council in October 1973, Sir Murray said: “I think the situation calls for an organisation, led by men of high rank and status, which can devote its whole time to the eradication of this evil.” Sir Murray told legislators. “A further and conclusive argument is that public confidence is very much involved. Clearly the public would have more confidence in a unit that is entirely independent, and separated from any department of the government, including the police.”

Thus was formed the Independent Commission against Corruption (ICAC). Goder was extradited, tried and sentenced to four years in jail. Many in the community sensed the wind of change at this time. They started to see the government setting the stage for the birth of an effective anti-corruption regime

Hong Kong today has been transformed into one of the cleanest places in the world, recognised as such by international institutions such as the World Bank, the Heritage Foundation and the Transparency International. Some countries have looked up to the ICAC as an effective model of combating graft holistically through detection, prevention and education.

(This is the first part of a three-part series on the subject)

(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at [email protected].)




Rambabu Shastri

5 years ago

Even in corporations, as long as the audit and investigations wing is independent of the normal business administration, it works independently and also ensures that corrupt practices supported by those in the administration do not occur. Independence of an anti-corruption wing or the CBI in India with amendments in law that ensure exemplary monetary punishment for those found guilty will help reduce corruption levels. Imagine... today a US court ordered that a maid who filed a case against her Indian employers for slavery in the US got USD 1.5 million. This kind of penalty makes headlines and also acts as a deterrent to would-be offenders.

Narendra Doshi

5 years ago

On 18th Feb, MLF had screened the documentary film"The Journalist and the Jihadi". There were many doubts and discussions on the way to go forward. This article answers many of the points and may be the future for India , also.

Nagesh Kini FCA

5 years ago

Even Sukhram's conviction didn't make headlines. Only a death sentence will make headlines!
There is an urgent need for immediate confiscation of all ill-gotten assets. One State (Is is MP?) has such a law in place. The corrupt in Karnataka are still glossing over their wealth.
Even owning Disproportionate Assets is considered a status symbol as most enjoy being classified under this category!

The Journalist and the Jihadi – The Murder of Daniel Pearl

“At a time when paid news is holding all our attention, it is probably important to watch and reflect on a different kind of journalism too, where lives are risked and sacrificed to bring information to us, the people”

Moneylife Foundation, on Saturday, held the screening of the documentary, The Journalist and the Jihadi – The Murder of Daniel Pearl. This the third session on documentary screening conducted by the Foundation.

The 75-minute film screening was followed by a free-wheeling discussion. Participants including few journalists, discussed about how in the era where whistleblowers are attacked and efforts are made to stone-wall information, lives are risked to bring out that information and present reality to the people. “At a time when paid news is holding all our attention, it is probably important to watch and reflect on a different kind of journalism too, where lives are risked and sacrificed to bring information to us, the people,” says Sucheta Dalal, founder of Moneylife Foundation and managing editor of Moneylife.

The Journalist and the Jihadi- The Murder of Daniel Pearl, is a film directed by Ahmed Jamal and Ramesh Sharma which documents the life of the reporter Daniel Pearl, working with Wall Street Journal, who was kidnapped and executed by a terrorist outfit in Karachi. The movie compares and contrasts his life with that of one of the terrorist, Omar Sheikh, mastermind of the killing. Both were well-educated, but where Pearl sought to bring people together through his work, Sheikh took a path that led to religious extremism. The film showcases how Pearl’s death reverberated through much of the world.

Earlier, Moneylife Foundation had screened two documentaries—noted media man Paranjoy Guha Thakurta’s documentary “Blood and Iron” on destructive illegal mining in Bellary and Umesh Aggarwal’s documentary, “Brokering News”, produced by the Public Service Broadcasting Trust (PSBT), exploring the alarming issue of paid news in depth, including the Niira Radia tapes.


Uncertain terrain: Weekly Market Report

Nifty likely to hit 5,610 and may be supported to around 5,475

The government’s move to boost foreign fund inflows into the Indian market saw the market surging for the seventh week in a row. Foreign institutional investors (FIIs) have so far pumped in Rs21,590 crore (as of 17 February 2011) into Indian stock markets as against a net outflow of Rs26,873 crore in the calendar year 2011. The market closed the week with gains of 3%.

The Sensex surged 541 points to close the week at 18,289 and the Nifty finished at 5,564, up 183 points. The market is now poised for a correction after the recent gains, which saw all kinds of stocks shoot up. The Nifty is likely to hit 5,610 and may be supported to around 5,475.

The market managed a flat close with a positive bias on Monday on support from the European markets in late trade. Select buying towards the end of trade enabled the market extend its gains on Tuesday. Optimism that Greece would stand by its austerity measures and strong institutional support saw the market closing 1% higher on Wednesday.

The market, which opened in the red on selling pressure and weak global cues, saw a good recovery in post-noon trade. But the upmove lacked strength leading to flat close with a negative bias on Thursday. Positive cues from the global markets helped the benchmarks close in the green on Friday.

In the sectoral space, the BSE Realty index jumped 10% and BSE Power surged 9%, whereas BSE Oil and Gas (down 1%) was the sole loser.

BHEL (up 17%), State Bank of India (up 11%), DLF (up10%), Mahindra & Mahindra (up 8%) and Larsen & Toubro (up 7%) were the Sensex topper in the week. Cipla (down 8%), Reliance Industries (down 3%); Coal India (down 2%), GAIL India and Hindalco Industries (down 1% each) settled lower in the list.

The Nifty was led by Reliance Power (up 20%), BHEL (up 16%), Axis Bank (up 14%), SBI and Reliance Communications (up 11% each). The top losers on the index were Cipla (down 8%), RIL (down 3%), Coal India (down 2%), SAIL and GAIL India (down 1% each).

Cheaper food items pulled the headline inflation to an over two-year low of 6.55% in January, the lowest since December 2009. However, finance minister Pranab Mukherjee said that the rate of price rise was still not at an acceptable level and should fall further.

As per the data, food inflation was (-) 0.52% in January against 0.74% in December. Food inflation fell into the negative zone on account of cheaper vegetables, like potato and onion whose prices fell by 23.15% and 75.57%, respectively, on annual basis.

Meanwhile, RBI governor D Subbarao on Friday said, “The inflation and interest rate cycles have peaked and have to come down and for that the RBI will look at events like the Budget (2012-13), international crude oil prices and other variable factors to calibrate its policies.”

In corporate news, the Centre on Friday moved the Supreme Court seeking a review of its verdict holding that the Indian Income Tax Department does not have jurisdiction to levy Rs11,000 crore as tax on the overseas deal between Vodafone International Holdings and Hutchison Group. The apex court held that Vodafone’s transaction with Hong Kong-based Hutchison Group was a ‘bonafide’ FDI which fell outside the tax jurisdiction of the Indian authorities.

On the global front, European finance ministers are set to decide  by Monday night on whether to extend a fresh bailout to Greece—another whopping 130 billion euros ($170 billion). But the policymakers are in a tight spot. Due to Greece’s deteriorating financial situation, if this previously-designed deal is allowed to stand, Greece’s debt-to-GDP ratio will still remain above 120% by the year 2020. Will they look the other way and just give the money?

The US Consumer Price Index rose 0.2% in January, below analysts’ expectations for a 0.3% increase. The rise was attributed to higher prices of gasoline, renewing concerns that high energy costs would impact the recovery.

While investors are concerned about the European debt crisis and its possible impact on the Asian economy, economists opine that emerging markets face a greater risk from rising oil prices than from Greece’s rising woes.


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