corruption
july'08
A dictionary
defines corruption as 'to make impure, to make morally unsound, to act
dishonestly, to pervert, to bribe' - and this is manifested most often
through the (mis)use of public office for private gain.
Nothing
is more detrimental to a nation's economic advancement than corruption.
Left unchecked it chokes progress by constantly gnawing away at the very
heart of development. Corruption undercuts the state's ability to raise
revenues, leads to higher taxes, robs people of their wealth, poisons
human relations, paralyses initiative, discourages investment in new enterprises,
encourages dealings in the 'black market', promotes conflict and destroys
confidence in government institutions. All of which means sclerotic economic
growth and consequent under investment in infrastructure, health and education.
Examples
of corruption can be found in rich countries as well as poor, as the perennial
saga of missing funds in the agriculture budget of the European Commission
proves. However corruption is more prevalent in the developing world through
a lack of transparency, patronage politics, a large public sector, endless
bureaucracy, weak institutions and poor pay.
According
to the African Development Bank corruption can cost African governments
up to 50% in lost tax revenues. Worse still it can have a devastating
effect on government services leaving ordinary people without vital help
in time of need. In his book, The Bottom Billion, Paul Collier tells how
a sum of money was tracked from its release by the Ministry of Finance
in Chad to its intended destination at a rural health clinic. On the course
of its journey there no less than 99% of the money disappeared denying
sick people vital medicines and potentially life-saving treatment.
For poor
nations corruption is a hole in the heart bleeding the very life-blood
out of their economies, holding back progress and stifling development
and in some countries it is so entrenched that it will take decades to
weed it out completely and even then only if governments are determined
to do so.
REASONS
FOR CORRUPTION
Poor pay is usually the main reason for most corruption in the developing
world. Due to these low salaries (often paid months or even years in arrears),
civil servants, for example, will often seek to use their powers to extract
extra income. This is fairly easy where laws and regulations are complex
as minor officials can often interpret the rules as they like when dealing
with the public. Similarly, in order to augment the standard of living
expected for lawyers and judges, 'justice' can be bought just like any
goods.
 KINDS
OF CORRUPTION
Its many
forms include bribing public officials (e.g. householders in some countries
have to pay the police before they get any service); embezzlement of funds
(e.g. schools are built on paper but the money allocated can often be
embezzled leaving nothing to show for it, and the apportioning of jobs
to family members and friends over those with ability. Large contracts
always give a more lucrative return than small ones e.g. a contract to
build a road would generate a larger bribe than one to fill in the potholes.
Similarly contracts to buy defence equipment are all too often favoured
over the dire need for rural health clinics for the same reason.
EXAMPLES OF MEGA-CORRUPTION
 1) since independence
in 1960 the Nigerian Treasury has been systematically plundered - by its
own governments. In the 25 years leading up to the end of military rule
in 1999 it is estimated that Nigerian governments misappropriated $250bn
from the country's oil revenues. In the same period the country ran up
foreign debts totalling $30bn. Even now, with a civilian government in
place for 9 years, not all Nigeria's huge oil earnings are accounted for.
Normally people make money and go into politics but in Nigeria, it seems,
people go into politics to make money.
2) In Kenya, the government of Daniel Arap Moi in its 24 years in power,
is alleged to have amassed personal fortunes for its members beyond the
wildest dreams of most Kenyans. Moi ruled through patronage and the pillaging
of state assets and is reported to have kept three suitcases of cash on
his desk for visitors. The end result was that when he left office in
2002 Kenya was effectively bankrupt. State concerns had been bled dry,
public services were barely functioning, potholes made roads almost impassable
and not surprisingly donors had broken off relations. In total it is estimated
that at least $2.2bn was lost to corruption during Moi's reign - enough
to have funded primary education for every boy and girl for a decade.
And his team of ministers are still smiling - for few are expected to
face charges for the years of misrule, let alone for their ill-gotten
gains.
3) In one Asian country,
according to the Asian Development Bank, state assets declined by $50
bn in 10 years as a result of corrupt officials undervaluing them for
sale to local and foreign investors in return for commissions.
CORRUPT
COUNTRIES
According to Transparency International(TI), in its Corruption Perceptions
Index(CPI) for 2007, the most corrupt countries are Somalia, Burma, Iraq,
Haiti, Uzbekistan, Tonga, Sudan, Chad, Afghanistan, Laos, Guinea, Equatorial
Guinea and Congo Democratic Republic - all scoring 2 or less out of a
'clean' 10.
MOST
CORRUPT LEADERS
TI has also set out a list of the world's greediest embezzlers:-
1. Mohamed
Suharto, 1967-98 President of Indonesia - $25bn
2. Ferdinand Marcos, 1972-86 President of the Philippines - $8bn
3. Mobutu Sese Seko, 1965-97 President of Zaire - $5bn
4. Sani Abacha, 1993-8 President of Nigeria - $4bn
5. Slobodan Milosevic, 1989-2000 Pres. of Yugoslavia/Serbia - $1bn
TACKLING
CORRUPTION
Lord
Astor said 'power corrupts and absolute power corrupts absolutely' It
is imperative, therefore, that the lead in the fight against corruption
comes right from the very top. And it must be relentless - day in, day
out, year after year until the message finally gets through. For unless
the leader in a country is determined to clamp down on corruption and
is seen to be doing so, nothing very much will change.
 One
of the first things the president should do is to insist that all government
ministers and top civil servants declare their assets in total highlighting
any foreign bank accounts. He/she should then set up an independent anti-corruption
commission to investigate all claims of misappropriation in the public,
private and voluntary sectors. This body should have the power to go right
to the very top and no one, not even the president, should be immune from
any investigation mounted. Penalties should be harsh for wrong-doers and
steps taken to recover the proceeds. But the leader should go further
still by getting all sections of society involved in reporting unlawful
practices. It should not just be a task for police forces but for everyone
who comes across abuses.
Then to
back all this up the following needs also to be introduced :-
training and paying decent salaries to civil servants/ police / medical
staff and teachers on time every month so that they are in a position
to lead by example.
privatising state assets
- monopolies are a breeding ground for corruption. A government’s
job is to govern and create the infrastructure to look after the well-being
of its people. In seeking to do this it should concentrate on securing
health and education services for everyone as well as ensuring that food
supplies are adequate and roads are maintained. Water supplies, power
and telecommunications industries need massive amounts of investment and
privatisation should be considered with foreign companies encouraged to
tender for contracts.
subsidies / tariff
barriers should be lowered and eventually eliminated - they are open to
regular abuse.
minimising powers of
bureaucrats - red tape is the enemy of a modern economy.
the accounts of public
corporations should be publicly audited.
an independent judiciary
needs to be established and the rule of law needs to be firmly rooted.
the central bank should
be wholly independent and its staff should be beyond reproach. People
with ability and whose integrity can be trusted should fill the top roles.
There should only be one foreign exchange rate for the currency.
open and transparent
tendering of government contracts and when work is complete, a survey
of the quality of the work done before final payment.
a free press and media.
periodic meetings in which government ministers can be questioned and
held to account by civil society.
In this
way not only will the people of that country soon start to see a difference
- outside investors, too, will take note and start to look at investment
opportunities. And with that investment will come badly needed jobs, better
pay, new technologies whilst ancillary industries will be set up.
INTERNATIONAL
ATTEMPTS AT COMBATING CORRUPTION
UN
CONVENTION AGAINST CORRUPTION (UNCAC) - this resolution was adopted by
the UN General Assembly on 31 October, 2003 and came into force on 14
December, 2005. To date it has been ratified by over 80 nations including
the UK. However, more than 140 countries have agreed all aspects of preventing,
investigating and prosecuting corrupt practices; returning stolen assets
and supporting each other on extraditions, investigations and prosecutions.
UNCAC also provides for an international framework which has the potential
to improve mutual law enforcement assistance, notably in extradition and
investigations as well as an asset recovery framework. The more countries
that ratify this agreement and are seen to be taking it seriously the
more corruption will be curtailed with the welcome bonus that international
co-operation has the potential to see ill-gotten gains recovered.
OECD Convention on Combating Bribery of Foreign Public Officials - when
it comes to signing contracts there are, of course, always two parties
involved - typically a government official and a businessman. The businessman
will say that he has to go along with paying the bribe or he will lose
the contract to a rival. Not any longer, however. Thanks to organisations
like TI the OECD has drawn up the Convention on Combating Bribery of Foreign
Public Officials. This anti-bribery legislation has now been signed by
all 30 OECD countries and 7 non-members - Argentina, Brazil, Bulgaria,
Chile, Estonia, Slovenia and most recently South Africa - and seeks to
prevent individuals and companies, at home or abroad, giving bribes to
foreign officials in order to secure a contract. This is a very welcome
move but it would be even better if companies from the above 37 countries
were to apply this legislation to their foreign subsidiaries too.
Extractive Industries Transparency Initiative - or better known as Publish
What You Pay. This initiative was launched at the World Summit on Sustainable
Development in Johannesburg in 2002 and its aim is to increase transparency
over payments by international companies in the extractive industries
to governments and government-owned entities throughout the world. Revenues
from oil, gas and mining in the form of taxes, royalties etc should be
an important engine in economic growth and social development in poor
countries. However, lack of accountability and transparency in these payments
often leads to much of the proceeds being unaccounted for. Under this
initiative major international corporations are encouraged to publish
in the national newspapers of a country what is paid by them in taxes,
royalties etc to their government. These payments should also be published
in their annual reports to shareholders.
In developing countries where trained accountants, civil servants, customs
officers, tax inspectors etc are often scarce, rich countries could offer
to help train able people from these countries on condition that on completion
of their training they returned to their own countries.
Through
the above conventions and agreements then there is a chance that at last
some headway can be made in the battle against corrupt practices. But
it will take time and it will need a strong determination by the signatories
to keep up the pressure and to abide by the obligations of each treaty.
Corruption
is the curse of Africa and it will take years if not decades to weed it
out in some countries. And if Africans are to enjoy a better future sooner
rather than later a start has to be made in combating this insidious problem.
However, maybe it already has in at least one African country. As visitors
make their way through the arrivals hall at Gaborone Airport in Botswana
they are met with this poster 'Botswana has zero tolerance for corruption.
It is illegal to offer or ask for a bribe'.
Coming from
Africa that is quite a statement but it just might mean what it says for
according to the 2007 TI CPI, Botswana is the least corrupt country in
Africa in position 38 placing it ahead of EU members Hungary, Italy and
the Czech Republic. If only other African countries were as keen to follow.
For more on Transparency International and the fight against corruption
see www.transparency.org
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