In global trade, wheels greased by greasing palms

A bribery index ranks India as the worst offender among leading exporters.

Surely the report was meant to shock, to agitate, and even to anger Indians. Yet, in the face of news that an international watchdog group has just labeled his country home to the world's biggest bribers, Sonal Sinha struggles even to feign interest.

"It doesn't surprise me," says the Delhi lawyer as he walks to work.

This is the country where the last foreign minister was sacked for being implicated in the Iraqi Oil-For-Food scandal. Police raids of government officials' homes routinely find mattresses full of rupees. One Madras (Chennai) businessman laments that he has to pay multiple bribes just to get his clothes to market.

From a British bureaucracy that excelled at self-enrichment and utter obfuscation, India has wrought a business culture that too often idolizes these qualities, say critics. As India collides with the comparatively higher standards of the Western world, it is beginning an effort to reform. But the resigned reactions of Mr. Sinha and others here to Wednesday's report indicate how far reformers still have to go.

Corruption needs to be tackled "at least for the sake of reputation," says S.K. Agarwal of the India office of Transparency International (TI).

His group released its annual Bribe Payers Index this week. It found that Indian companies were more likely to give bribes while conducting business abroad than were companies from any of the world's other top 30 exporters, according to a survey of 11,000 businesspeople in 125 countries.

Switzerland was given the highest grade by the global anticorruption group, although it had among the lowest percentages of international trade for 2005, at just 1.2 percent. The US tied for the ninth most honest broker along with Belgium.

Keeping India company as countries where bribery is a nagging problem, according to the TI list, are China, Russia, and Turkey, who, respectively, placed above India.

In response to India's worst-of status, one garment exporter snorts, "It's common knowledge that people have to pay up just to get an export order from abroad," he says, asking that his name not be used to avoid retribution from government officials.

And that is just the finish line. The exporter says he had to run a gamut of bribes before that: "First, the customs people want a cut for every consignment exported."

For the Federation of Indian Chambers of Commerce and Industry (FICCI), that sort of attitude is disappointing. The organization suggests that Indian companies are not the worst bribers, and it questions the findings, noting that they are based purely on the perceptions of businessmen in various countries.

"Most of the Indian companies conducting business abroad are also very respected," says Vivek Bharati of FICCI.

Yet Mr. Sinha, the Delhi lawyer, has a different take: "Even if reputation suffers, one needs to get the contract – after which it hardly matters how you get it."

Besides, he adds, bribery doesn't get far if there are no takers. If an Indian company acts unethically while trying to get an oil contract in Nigeria, for example, then let Nigeria deal with it. "A new law in India for this specific purpose would prejudice Indian business dealings," he says.

There is growing sentiment in India, however, that India must take some action, even if it would be forcing its companies to play by rules that companies from other countries can ignore. A law would not only clarify a murky area of ethics but also help India in its expanding relations with the West.

"While India is a signatory to the UN convention on corruption, it has yet to ratify it," says Dr. Agarwal of Transparency International, adding that India should make a law similar to America's Foreign Corrupt Practices Act.

Reformers are combating entrenched practices and a long history. In a different Transparency International survey, India ranked No. 88 of 158 countries in terms of its own citizens' perceptions of the pervasiveness of corruption in the country. Moreover, proving corruption in a court of law has proven near impossible.

Prosecutors find it difficult to compile evidence supporting a corruption charge, says Reshmi Mitra, an activist at the Commonwealth Human Rights Initiative. The system of government that India inherited from the British was inherently bureaucratic, and it jealously guarded any information about government dealings. The result is that most information is considered a privilege that the government will bestow upon those it favors, says Ms. Mitra.

"This is a mentality that has been there for a long time," she adds.

Heralding some progress for Indian transparency, activists have succeeded in getting a new Right to Information law on the books. But officials and the public are still unsure about how to handle it.

"This is an excellent start," she says. "You cannot expect what has been there for 50 years to change in a minute.... India is still at a nascent stage when it comes to tackling corruption."

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