TAKING STOCK : End regulations, eliminate corruption India, Nepal, and other SAARC countries, are used to corruption. Scandals rock governments, subside, and then hit again. In India, crores of rupees were found in the former telecom minister Sukh Ram’s house, this only to be followed by the ‘Tehelka’ scandal, which rocked the previous government. In Nepal too the same story keeps repeating, only the names change. Corruption occurs when businessmen want something from the government. If you need a licence to start a factory and the government official has the power to grant it to you, the grounds are laid for money and licence to change hands. The government official gets his ‘dues’ and the businessman gets his licence. Both parties gain even as the nation loses. Money which goes as bribes is a cost for the businessman and he will recover it from What happens if licensing requirements are abolished? If the businessman does not need a licence, there is no need for him to corrupt a government official. Corruption is eliminated. It is that simple. Countries with the least corruption also have the least number of regulations. Make it easy for businessmen to open a business and run it, and you not only eliminate corruption but simultaneously give a boost to investment and the nation’s economy. Hernando De Soto, president of Peru’s principal advisor, and president of the Institute of Liberty and Democracy, is Latin America’s foremost reformist. In his book ‘The Mystery of Capital’ De Soto tells us that to open a small, one worker only, garment workshop in Peru, his team had to fill out forms, stand in lines, make bus trips to central Lima (Peru’s capital) to get certifications to operate. After working six hours a day for 289 days the business was registered. The cost was $1,231, thirty one times the monthly minimum wage. Building a house legally in Peru was even more complex. The entire process took six years 11 months. 728 administrative steps were required to get title to land and after that a further 207 steps in 52 government offices were necessary to get the building permissions. The time required to wade through the bureaucratic red tape to obtain permission to run a taxi or bus was 26 months. De Soto’s research team carried out these experiments in many other countries. The same problems were encountered in Philippines, Brazil, Egypt, Haiti and Venezuela. Corruption thrived and bribery was part and parcel of the system, the result of government red tape and myriad restrictions. Contrast these with countries that have substantially done away with corruption. In the US, for my wife and me, to start a business was simple. The name registration took a few minutes and could be done over the phone. Our telephone was operational in a few hours, the electricity connection in place in less than 24 hours. No bribes were expected or offered. This was in Fresno, California. In New York the procedures are a little more complicated; in some cases, it might take a month to obtain all the permissions required to open a factory. In Hong Kong the procedures are simpler than the US. A simple one-page form that takes minutes to fill out may be all that is required. You will be in business the day you want to be. Bribery is unknown to the common man. Granted that even if regulations are minimized there will still be some government dealings necessary for citizens, how do we further reduce corruption? Singapore’s former premier Lee Kuon Yew found the answer: pay the government employees well, and then have zero tolerance for corruption. The salaries of Singapore’s government employees are the highest in the world, its PM gets paid a million US dollars per year. The people of Singapore get, in return, the cleanest government on the face of this earth. The route for Nepal to take is clear: eliminate as much of the bureaucratic maze as is possible and then pay government officials well, on a par with the best salaries in the private sector. After that, hold the officials responsible based on a zero-tolerance corruption policy. (The writer can be contacted at: everest@mos.com.np)