The Crisis of Governance in South Asia

M. Shahidul Islamshahid1
Research Associate, ISAS

While the developments in Pakistan in the past decade as far as its governance issues are concerned are highly disturbing, the situation is not very rosy in other parts of South Asia either. The other dominant countries of South Asia have had democratic governments installed but the state of governance in all the concerned countries (i.e., India, Bangladesh and Sri Lanka) has become a matter of serious concern in recent times.

The Congress-led UPA government in India has been subject to much criticism in recent months when the media revealed, among others, a number of high profile scams involving politicians and corporate houses. Indeed with mounting corruption allegations and poor governance, the fiscal year 2010-11 was nothing short of an annus horribilis for the Singh government. The nexus between politics and business largely owing to corporate interest has severely undermined good governance, ethos of politics and equity-based growth in South Asia’s largest country. The magnitude of the 2-G scam alone is larger than the total GDP of Nepal. If one is concerned about the India Cables released by the wikileaks, which India’s influential daily the Hindu posted on its website, the level of political and corporate corruptions in India shows no sign of abatement.

In Bangladesh’s 2008 elections, the Sheikh Hasina-led Awami League (AL) returned to power with a two-third majority. However, under her leadership, if not dictatorship, the country’s state of governance has hit an all time low since the nation’s transition to democracy in 1990. Practically all organs of the state have been highly politicised. The government is accused of amending Bangladesh’s constitution in line with AL’s political interests. The anti-corruption commission has been made ineffective. “For my friends, anything; for my enemies, the law” is the mantra of the ruling government.

The issue of war crimes, violation of human rights and the question of Tamil integration have put the Sri Lankan government under severe international pressure since the war against Liberation Tigers of Tamil Eelam ended in May 2009. President Mahinda Rajapaksa is accused of concentrating power both for his family and himself. The 18th Amendment to the constitution is being called a de facto constitutional coup. According to a report by the International Crisis Group, the amendment gives Rajapaksa a very real chance of remaining in power indefinitely.

The available governance indicators also support the state of poor governance in South Asia. The World Bank’s Worldwide Governance Indicators – voice and accountability, political stability, governance effectiveness, regulatory quality, rule of law, and control of corruption – shows that in all but voice and accountability benchmarks, South Asia’s governance quality has deteriorated in recent years.

Interestingly, the state of governance in South Asia is deteriorating at a time when the key economies of South Asia bar Pakistan demonstrated extraordinary economic growth in recent decade led by India.

While the nexus between economic growth and corruption (an inverse function of good governance) is inconclusive, the relations between the two variables in South Asia perhaps resemble an inverted U-shaped Kuznets curve (the concept originally introduced to explain inequality) implying that corruption increases over time while a country is developing, and then after a certain average income is attained, corruption begins to decrease.

South Asia’s recent experience with regards to governance problems generate some food for thought that can be studied further for the wider benefit of the region:

1.      Is South Asia’s rapid economic growth creating more room for corruption that is deteriorating the region’s state of governance?

2.      In the case of Bangladesh and Pakistan, it is argued that due to the lack of good institutions, corruption perhaps greases growth in the short run to some extent but in the long-run it costs growth. However, India’s high growth rates make the issue more complex and puzzling.

3.      While the causes of poor governance in South Asia are not unique, the country specific reasons stand out. Corporate interests in India, political interests in Bangladesh, ethnic issues in Sri Lanka and military interests in Pakistan are perhaps four broad areas that affect the governance structures of South Asia adversely.

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