Corruption? Who cares?

As economies grow, so should wealth and the tax base. Not in some countries. According to Transparency International’s annual Corruption Perceptions Index, Turkey has suffered the year’s biggest fall in rank, and low rankings for the major emerging economies known collectively as the BRICs – Brazil, Russia, India and China. Turkey, which dropped five points to a CPI score of 45, was the biggest loser, while China was down four points to 36, the same decline as Rwanda, Malawi and Angola.

So what is the logic behind it? In emerging economies, the middle class that cherishes growth does not see a problem with bribery, irregularities, kickbacks and overall corruption. As most novelists of European literature wrote about in the early years of the 20th century, the poverty-stricken masses would probably turn a blind eye to bigger crimes if they were given just enough social aid so as to hope that “things will be better.”

But according to Transparency International’s description, corruption by governments, police, court systems, political parties and bureaucracies undermine development and deepen poverty. Take a look at coal mines in Turkey, for example. Most rural Turkish coal mines are run by small- or medium-sized businesses associated with local Justice and Development Party (Ak Party) officials. Even Social Security Minister Faruk Çelik had to admit that every time they want to close a mine, they get phone calls from at least 25 people to stop the closure. This is a sign of the times. Every dangerous mine, every non-regulated construction project probably has at least 25 unseen hidden beneficiaries. The owners, the bosses, and the sub-contractors are not the only ones that get rich. So does the middleman who engages in petty crimes like weekly bribes, kickbacks and favors. The middleman becomes the next project’s subcontractor and the owner of the next big land grab. This is how the system works and it shows no sign of abating.

Transparency International referred to the crackdown on free speech and the press as a means to cover up corruption issues. The sad issue is there is really no demand for it. Turkish society has chosen to be numb and dumb about corruption issues, fearing that otherwise it may somehow hit his/her business. Erich Fromm wrote that Nazism resurrected the lower middle class psychologically while participating in the destruction of its old socioeconomic position. In some countries, corruption has become the engine of growth for the lower middle classes.

According to a recent survey by the Turkish Business and Industry Association (TÜSİAD), corruption increases the cost of doing business 10 percent worldwide. TÜSİAD Chairman Haluk Dinçer also stressed last week the trend of increasing in corruption in Turkey. However, his concerns about damaging confidence and justice are unfortunately limited to a handful of business pioneers, because there seems to be little payback in worrying about the issue. Previously in the 1990s, if a government or business was labeled corrupt inside or outside of Turkey, there was a price to pay - be it in the form of interest rates or low ratings in financial circles. Now, there is no accountability, no cost and no penalty for being corrupt. So all big business leaders say, “Hell, am I the only stupid guy in the room not filling his bucket while it’s raining?”

The point they are missing is that this will not and cannot last forever.

So when TOKİ, the government’s Housing and Construction Administration, prefers to hide the cost of the new presidential palace of Recep Tayyip Erdoğan, on the grounds that it may hurt the economy, one should be afraid. Indeed, be very afraid.