Middle Classes in Brazil, India Protest Corruption

People in emerging economies are struggling to put an end to decades of nepotism and graft.

The rising middle classes in Brazil and India, two major emerging markets, are stepping up the fight against corruption in their governments. Politically empowered by their education and financial independence, students, young urban professionals and entrepreneurs are speaking out against the graft that is so endemic in both countries’ myriad bureaucracies. Vested interests are moving slow to respond however. Part of the political class, so accustomed to profiting from positions of privilege, won’t change ways unless forced to.

Brazil and India are both huge democracies with public administrations to match. Decades of experiments in socialism have left enormously complex and encompassing bureaucratic apparatus that employ hundreds of thousands of people between them. Business and labor regulations are extremely detrimental to private-sector growth. In both countries, it is costly and time consuming to launch or close a company while extensive permitting processes deter investment and expansion.

Corruption is particularly insidious as it pervades in every level of the bewildering number of government agencies that aim to improve the lot of ordinary people, including public education and the judiciary.

Brazilians and Indians put up with it for decades as many of them depended on government in one way or another. Market reforms introduced during the last ten to twenty years have opened up the Brazilian and Indian economies however and given rise to a burgeoning middle class that is now demanding transparency from their public officials, elected and unelected alike.

In India, the anti-corruption effort is spearheaded by 74 year-old activist Anna Hazare who campaigned for a citizens’ ombudsman bill in April of this year. He ended a four day hunger strike after parliament agreed to draft anti-corruption legislation but because justices, the prime minister and low level bureaucrats are exempt from investigations under the current draft, Hazare went on hunger strike again, stirring nationwide protests by sympathizers.

Prime Minister Manmohan Singh’s progressive government has appeared largely impotent in the face of the civil unrest that Hazare inspired. His Congress party has been in power for almost all of India’s independence and remains extremely influential in local politics. The party’s machine is naturally reluctant to endorse legislation that would penalize the methods by which it has managed to retain power.

The conservative opposition may have embraced the anti-corruption cause but its members too are guilty of patronage and abuse. Indian politicians across parties remain susceptible to bribes despite freedom of information legislation introduced six years ago.

Unlike Singh, Brazil’s Dilma Rousseff has taken charge of an effort to root out corruption herself at immense political peril. Newly in power, the Workers’ Party president managed to disgruntle her allies with a drive to cut costs and improve accountability across the federal government, prompting four ministerial resignations in less than eight months.

Leaders of Rousseff’s largest coalition partner have warned that they might “protest” against the government in Congress which could jeopardize its economic reform agenda. Rousseff, a technocrat whose aloof style has probably contributed to the souring of coalition ties, intends to curb public spending and streamline the tax code to reduce the state’s burden on the economy and help encourage entrepreneurship.

Although graft is less prevalent than in India, it does reach the upper echelons of Brazil’s political establishment. Vote buying and nepotism are well documented yet the people involved are rarely prosecuted. Brazil’s judiciary is notoriously inefficient and subject to political and economic influence.

News media have played an important role in bringing corruption to the public’s attention. India’s 2005 Right to Information Act enabled the press to dig up dirt legally while Brazil’s aggressive and highly competitive media are constantly struggling to uncover political scandals. The legislation needed to punish those otherwise disgraced by revelations of misconduct remains lacking though.

Hazare and Rousseff have a tough fight ahead of them. The former was arrested last week after he threatened to stage another hunger strike and might bring down India’s coalition government, already weakened by blunders. The Brazilian leader could fail to keep hers together if she insists on implementing meaningful reforms.