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corruption

A dictionary defines corruption as 'to make impure, to make morally unsound, to act dishonestly, to pervert, to bribe.' And corruption is manifested most often through the abuse of entrusted power for private gain.

According to International Chamber of Commerce 'corruption is the single greatest obstacle to economic and social development around the world.' And according to the World Bank every year US$1 trillion (£800bn) is paid in bribes while an estimated US$2.6 trillion (£2.1 trillion) is stolen through corruption - sums equivalent to more than 5% of global Gross National Income (GNI).

Left unchecked corruption chokes progress by constantly gnawing away at the very heart of economic 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 ensures sclerotic economic growth and consequent under investment in vital areas like agriculture, water, infrastructure, health and education.

Examples of corruption can be found in rich countries as well as poor - four of the past seven governors of the US state of Illinois have gone to prison for corruption. And several UK MPs have recently been found to be abusing their expenses allowances. At the same time, respect for commercial banks in the UK has never been lower as a result of recent scandals which include pensions mis-selling, endowment mortgage fraud, the payment protection insurance scam, LIBOR rigging, tax evasion and insider trading. Also London-based HSBC was found to have had lax controls that allowed Latin American drug cartels to launder hundreds of millions of dollars which resulted in a fine of US$1.9bn. Then there was the racketeering that has gone on in football (soccer), the 'beautiful game', under former president Sepp Blatter at the Zurich-based FIFA, the governing body of world football. Here the US Justice Department charged most of Blatter's FIFA executive alleging that they accepted multi-million dollar kickbacks over 24 years and which resulted in Blatter having to stand down. And now in athletics, the World Anti-Doping Agency (WADA), has levelled allegations of cheating and doping against athletes from several countries including Russia, Turkey, Kenya and Ukraine saying that authorities in these countries turned a blind eye.

Corruption, however, is more detrimental and happens more readily in the developing world through lack of transparency, patronage politics, a large public sector, endless bureaucracy, weak institutions and poor pay. And in Africa, it is almost expected, as traditionally the Big Man (president) is entitled to enrich himself at the expense of others. In his State of the Nation speech in October, 2013, Jose Eduardo dos Santos, President of Angola, went even further demanding that he be allowed 'to act with the impunity enjoyed by rulers in feudal times' and went on to incite African leaders to loot their countries' resources and to exploit and neglect their people.

According to the Mo Ibrahim Foundation corruption costs Africa US$148bn per annum which is equivalent to 50% of the continent's tax revenue and 25% of its GDP. This has 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, then, 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 out completely and even then only if governments are determined to do so.

KINDS OF CORRUPTION
Poor pay is usually the main reason for low level corruption in the developing world. Due to 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. And it would appear that this is not altogether condemned for in an evaluation report by the Public Service Commission of Kenya it was reported that 77% of civil servants accused of stealing were acquitted. Extracting bribes is also 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.

Other forms of corruption include bribing public officials (e.g. according to the World Bank in 2011 80% of businesses in Nigeria paid bribes to government officials in order to stay in business.) In a recent survey it was found that 80% of householders in Kenya, Nigeria and Zimbabwe have to pay the police before they get any service. Parents in Kenya have to pay bribes to get their babies' birth certificates and children must pay bribes to bury their parents. And according to Kenya's anti-corruption watchdog there is a cost to report a crime, go to college or even get a job. In Uganda a government report in 2012 found that there were 'ghost' teachers earning salaries and 'ghost' pupils boosting attendance in most of the country's schools. And in the case of the latter it was estimated that, on average, this increased primary school enrolment by 21%. Large government 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) according to a 2014 World Bank report former Tunisian dictator Zine el Abidine Ben Ali had family assets worth an estimated US$13bn (£10.4bn) - more than a quarter of Tunisia's gross national income - when he was overthrown in January, 2011. Large parts of telecommunications, transport and real estate were in family hands which meant that they were able to set the prices and rake off the profits. At the same time a series of decrees made it almost impossible for others to enter these markets. According to World Bank economist Antonio Nucifora, one of the authors of the study, 'similar structures exist all around the world. And the measures that enabled Ben Ali to enrich himself still exist in Tunisia today.'

2) after returning from a fact-finding mission to oil-rich Equatorial Guinea in August, 2011, Nadine Dorries MP stated that 'the government of Equatorial Guinea exists to increase the personal wealth and political power of the ruling class at the expense of the wider population. During a meeting with the prime minister this was stated more or less explicitly in response to our probing and was non-negotiable.'

3) 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. But 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. And things have not changed in Kenya. In a report in July 2015, by Professor Githu Muigai, the attorney-general, he described the massive gap between intention and reality in the country claiming that 'only 1% of government spending was accounted for in the financial year 2013/14.' The report was full of allegations of theft, incompetence, waste, misspending and corruption on a colossal scale.

4) 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. Normally people make money and go into politics but in Nigeria, it seems, people go into politics to make money. In the same period the country ran up foreign debts totalling $30bn. Even now, with a civilian government in place for 15 years, colossal amounts of Nigeria's huge oil earnings are still unaccounted for with a further report in March, 2016 by the Revenue Mobilisation Commission stating that the Nigerian National Petroleum Corporation had failed to pay over US$25bn to the government from 2011-2015. Also, according to US officials sent to Nigeria after Boko Haram kidnapped 200 schoolgirls, it was found that the army was so corrupt that often soldiers had to fight without bullets. By one estimation corruption has become so calcified in Nigerian public life that it will take 100 years to weed it out completely.

MOST CORRUPT COUNTRIES
According to Transparency International (TI), in its Corruption Perceptions Index(CPI) for 2016, the 10 most corrupt countries in the world are Somalia, South Sudan, North Korea, Syria, Yemen, Sudan, Libya, Afghanistan, Guinea-Bissau and Venezuela - all scoring 1.7 or less out of a 'clean' 10. Russia only scores 2.9, just above Kenya on 2.6. Other scores include China 4.0, India 4.0, Greece 4.4, Saudi Arabia 4.6 and Italy 4.7. Overall, as far as Africa is concerned, only 6 nations (Botswana, Cape Verde Islands, Rwanda, Mauritius, Namibia and Seychelles ) out of 54 (just over 10%) score 5 or above in the CPI. (The least corrupt countries are Denmark and New Zealand with 9.0, Finland 8.9, Sweden 8.8, Switzerland 8.6, Norway 8.5, Singapore 8.4, Netherlands 8.3, Canada 8.2 and Germany and UK on 8.1. The US is 18th with 7.4.

CORRUPT LEADERS
Set out below is a list of the estimated wealth of some more of the world's most rapacious embezzlers:-

* Mohamed Suharto, 1967-98 President of Indonesia - $25bn
* Omar al-Bashir, in post since 1989 President of Sudan - $10bn
* Ferdinand Marcos, 1972-86 President of the Philippines - $8bn
* Mobutu Sese Seko, 1965-97 President of Zaire - $5bn
* Sani Abacha, 1993-8 President of Nigeria - $5bn
* Meles Zenawi, 1993-2012 Prime Minister of Ethiopia - $3bn (Meles Zenawi claimed he was only paid $250 per month as PM)

And some more recent reprehensible examples of corruption from sub-Saharan Africa include:-

a) currently in the 2017 Forbes list of 'The World's Billionaire' in 630th place, with assets totalling an estimated US$3.1bn, sits Isabel dos Santos, 44 year old daughter of Jose dos Santos, who has been president of oil-rich, people-poor Angola since 1979. She is the first African woman to enter the Forbes list. Sources of wealth include large stakes in Portuguese media and financial companies building on her holdings of stocks in Angola's largest bank, Candando supermarkets, a cement company and a 25% share in the telecommunications company, Unitel. She also heads up Sonangol, the state-owned oil giant.
b) according to French officials Denis Sassou Nguesso, president of the Republic of Congo for the last 17 years, owns 24 estates and operates 112 bank accounts in France.
c) Teodorin Nguema Mangue, son of the president of Equatorial Guinea, amongst much else, owns a Gulfstream jet, 8 Ferraris, 7 Rolls Royces, 2 Bugattis and a 12 acre estate in Malibu valued at US$38million. This, the country's second vice-president, playboy and anointed successor to his father, was fined US$30million by the US Justice Department in October, 2014 over allegations of corruption and money-laundering on a grand scale. Another trial opens on 2 January, 2017 at the International Court of Justice in The Hague where he will be accused of laundering tens of millions of Euros in France. His former butler described Teodorin's lifestyle in France in three words : 'alcohol, whores and coke.'
d) Karim Wade, son of the former president of Senegal, Abdoulaye Wade, is currently under arrest accused of illegally amassing US$0.7bn during his father's rule. During that time he held so many ministerial posts that he was dubbed 'minister of earth and sky.'
e) according to Nigerian based 'Ventures' magazine, Ngina Kenyatta, mother of President Uhuru Kenyatta, has amassed a fortune in excess of US$1bn. At the same time, according to Forbes Magazine, the Kenyatta family owns 500,000 acres of prime land spread throughout the country and has stakes in Kenya's largest dairy Brookside, media company Mediamax, Heritage Hotels and Commercial Bank of Africa. In all, it is estimated that 50% of Kenya's wealth is in the hands of the political elite.

In 1887, Lord Acton stated that 'power corrupts and absolute power corrupts absolutely. Great men are almost always bad men.' Since independence swept over the continent in the 1950s/60s for Africa, at any rate, this maxim would appear to hold true.

But it didn't have to be like this. Contrast Africa with what happened in south-east Asia in the last half century. For example, at independence in 1965, the prime minister of Singapore, Lee Kuan Yew, recognised that in order to attract foreign investment which would deliver jobs one of the first things he would need to do would be establish trust in the country. To this end he established the rule of law, made the judiciary independent and set up a Corrupt Practices Investigation Bureau with the power to investigate any minister or civil servant right to the very top. Anyone found guilty of embezzlement would immediately be dismissed. The rest, as they say, is history and today Singapore is one of the most advanced nations on the planet. If African leaders had been less predatory and more pragmatic their people would not be struggling as they are today.

TACKLING CORRUPTION

As mentioned above the Transparency International Corruption Perceptions Index for 2016 shows that only 6 African nations recorded a score of 5 or above - Botswana 6.0; Cape Verde 5.9; Seychelles 5.5; Rwanda 5.4; Mauritius 5.4; Namibia 5.2. And of these countries 3 are island states. That means on the entire African mainland only THREE countries are more honest than corrupt which means that 45 nations are failing their people. And nothing will change anytime soon for most African leaders seem to take the view of Hifikepunye Pohamba, former President of Namibia, who stated in a speech in March, 2014 that it is 'not for me as president to investigate corruption.' By signalling such inaction it suggests that he is condoning corruption and it is time for the outside world to waken up and recognise that this is the situation throughout most of Africa.

When white minority rule persisted in South Africa it wasn't long before campaigners of the like of Bishop Trevor Huddleston set up the Anti-Apartheid Movement which resulted in sanctions being levelled on the white South African government. After many years this eventually led to the release of Nelson Mandela from prison and, in time, black rule. But black rule right throughout the continent has only ever encompassed minority rule. For in most African nations the ruling class cling on to power at all costs meaning those in power have the freedom to do what they want and for as long as they want. And for those elites corruption has become a way of life. But where are the campaign groups in the West today protesting against this injustice? They are nowhere to be seen for they fear being accused of racism or neo-colonialism. But it can never be racist to condemn the robber barons in governments across the continent whose profligacy deny children proper schools and families food, clean water and decent medical centres. At the same time roads remain potholed, overgrown and unmade whilst power supplies remain unpredictable at best.

That is why it is time for Western governments, international NGOs, rich Americans, churches, pop star philanthropists and poverty campaigners to face reality and to start to challenge governments who rob their people of a decent life. To this end all Overseas Development Assistance (ODA) and investment in countries where corruption goes unchallenged should be re-directed until it can be seen that leaders there are starting to take the problem seriously and doing something about it.

And that fight against corruption will need to be relentless - day in, day out, year after year - until the message finally gets through. For unless the leader of a country leads by example in his/her determination to confront corruption and is seen to be doing so, nothing 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 wrongdoers 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 also needs to happen:-

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 monitoring that food supplies are always 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.

institutions need to be strengthened, 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 any country's 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.

encourage whistle-blowing and ensure protection of informers.

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

On 11 July, 2017 the African Union expressed its commitment to the fight against corruption by adopting the AU Convention Preventing and Combating Corruption (AUCPCC) to mark the first African Anti-Corruption Day. The AU Assembly also declared 2018 'African Anti-Corruption Year.' However, this is the AU which has a long list of promises on corruption but has rarely delivered and there is no reason to assume things are about to change now. In a recent poll by Afrobarometer taken over 36 countries, 55% of Africans said corruption had increased in recent years although three countries - Rwanda, Liberia and Tanzania - had made progress. Another study by anti-corruption agencies in southern Africa found that the judiciary, police and customs officials were often the biggest part of the problem.

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 in 2017 it has been ratified by over 140 nations including the UK. However, more than 180 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.(Since 2006 the UK Department for International Development has part-funded two anti-corruption units: The Metropolitan Police Proceeds of Corruption Unit, and the Overseas Anti-Corruption Unit (OA-CU). The Met Unit's main task is to investigate allegations of money laundering by senior public figures from developing countries through the UK financial sector. The OA-CU primarily investigates allegations of corruption and bribery by UK companies or nationals engaged overseas.)

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 in 2017 has now been signed by all 35 OECD countries and 8 non-members - Argentina, Brazil, Bulgaria, Colombia, Costa Rica, Lithuania, Russia and 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 43 nations were to apply this legislation to the foreign-owned subsidiaries of their own domestic companies too.

EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE (EITI) 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. In 2010, the US government gave EITI a major boost by passing the Dodd-Frank Act requiring all oil, gas and mining companies registered/doing business in the US to annually disclose what they pay to foreign governments over US$100,000 by country, and by project. This is a major step forward although industry bodies in the US are currently filing a suit against the US Securities and Exchange Commission arguing that it puts American companies at a disadvantage vis-a-vis their global rivals. However, in April, 2013, the European Union followed suit requiring all EU-listed public and private companies to publish all payments made over 100,000 Euros including taxes, royalties and licence fees. For the UK, from 1 January, 2015, companies have to disclose payments over £85,000 on a project-by-project basis in developing countries or face criminal charges. Currently 51 nations provide at least project level reporting under EITI.

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.

If the signatories of the above conventions and agreements were determined to follow through then there would be a chance that some headway would be being made in the battle against corrupt practices. But there is scant evidence that this is happening so far.

And so, as far as corruption is concerned in sub-Saharan Africa, it will take years, if not decades, to weed it out. In some countries, like Nigeria, where the governor of the Central Bank accused the Nigerian National Petroleum Corporation of being unable to account for US$50bn worth of oil sales for the period January 2012 to July 2013, it could take most of this century. For progress in Nigeria in tackling this insidious problem is slow to non-existent even with the new government of Muhamadu Buhari making the right noises.

If only all nations in sub-Saharan Africa could be as determined as Botswana in dealing with the problem. Here, as visitors make their way through the arrivals hall at Gaborone Airport, 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 and the Botswana government can be proud of being identified as the least corrupt country in the whole of the African landmass - by a mile.

For more on Transparency International and the fight against corruption see www.transparency.org

 
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