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The
title of this piece is a Swahili proverb which means: to
get rid of an annoyance, pay some money. Tanzanian
novelist MG Vassanji used it to ask whether he could
conclude that corruption is only natural.
“Where a
bureaucrat or schoolteacher or policeman can barely
afford the luxury of a newspaper, when sons and
daughters of the well-placed return from Europe or
America flaunting wealth and style, can one really blame
him for asking chai [tea] money, which he will
use to buy a decent dinner that night or even pay school
fees? No, we cannot blame him. But to accept the status
quo is to accept a society without a sense of fair play
or rules, in which the rich are always the winners, and
the vast majority remain poor and desperate as the
population escalates.”
Vassanji
grew up in a repressive socialist society in which
corruption was a way of life, “a discomfort to be
endured like the hot sun at noon for those who don’t
have the luxury of owning a car. The attitude did not
allow people to develop civic sense, a public
responsibility, belief and pride in the neighborhood,
the city, the nation, so that for those without the
means or influence, government is the enemy.”
It’s
easy to conclude from Vassanji’s experience that a free
society with a market-oriented (avoiding the term
capitalist) economy is less corrupt—if one allows that
then-welfare states like Finland, Iceland, New Zealand,
Sweden and Denmark are the least corrupt.
Corruption is very much in the world, however, even if
scientific evidence is hard to come by due to the hidden
nature of corruption. You can’t go around accusing
anyone of corruption without “documentary evidence,”
which isn’t only hard to produce but also dangerous to
seek. Most reports on corruption come from surveys of
people’s opinion, experience and perceptions, unless
corrupt practices were officially unearthed.
Enron
has become a byword of corruption; F. Hoffmann-La Roche
Ltd. was fined $500 million, BASF Aktiengesellschaft
$225 million, SGL Carbon Aktiengesellschaft $135
million, for antitrust crimes, and Daiwa Bank Ltd. $340
million for financial shenanigans.
In
recent times, the
US
Justice Department took action against Monsanto,
ExxonMobil, Schering-Plough, Titan, ABB and InVision
Technologies for corrupt practices. General Electric,
which owns InVision Technologies, was involved in so
many cases of fraud that in the 1990s the Pentagon’s
Defense Contract Management Agency created a special
investigations office for the company, which indicted GE
on 22 criminal acts and recovered $221.7 million.
Good
news in the crusade against corruption, except few of
these companies were debarred, while many more have
gotten away, probably with worse.
Last
year the World Development Movement’s white paper
disclosed the following:
§
Between
$20 billion and $50 billion acquired from corruption in
developing countries enters Western bank accounts each
year.
§
Multinational companies launder around $270 billion of
profits tax-free out of developing countries a year. By
contrast, aid from such countries to poor countries is
$80 billion a year.
§
At least
$11 trillion is currently held in offshore tax
havens—approximately 30 percent of the wealth of the
world’s richest individuals. Half of 71 global tax
havens are British territories, dependencies or
ex-colonies where Britain has significant influence.
Top 10
in sleaze sector
Transparency International’s Bribe Payers index for 2002
listed the top 10 business sectors “most likely to
demand or accept bribes.” They are public
works/construction, arms and defense, oil and gas
construction, real estate/property, telecoms, power
generation/transmission, mining, transport/storage,
pharmaceutical/medical care, heavy manufacturing and
banking/finance.
In a
survey of 69 countries, the areas of corrupt activities
are ranked, in descending order, on a scale of 1 (“not
corrupt”) to 5 (“extremely corrupt”): political parties,
parliament/legislature, police, legal system/judiciary,
business/private sector, tax revenue, customs, media,
medical services, utilities, education system, military,
NGOs and religious bodies. Media at 3.2 percent is on a
par with medical services, but more corrupt than
utilities and education system (3.0), military (2.9),
NGOs (2.8) and religious bodies (2.6).
The
survey doesn’t say whether the Philippines is included
in the 69 countries surveyed.
The
propensity to bribe among the world’s export giants is
still common despite the existence of international
bribery laws criminalizing the practice; it’s believed
to have increased last year. In the “high propensity”
table are India, China, Russia, Turkey, Taiwan and
Malaysia. In the “medium” are Saudi Arabia, Italy,
Mexico, France, Japan and the US. In the “lower” are
Britain, Canada, Austria, Australia, Sweden and
Switzerland. (The Philippines is not on the list because
we don’t have an export giant.)
There
is, therefore, no sector, or pocket, or area of
corruption. From the tithes that taxi drivers have to
give to security guards in gated ghettos, the “peace
offerings” of vendors to police, to the “appreciation”
to government functionaries for favors received,
corruption is not so much a way of life but probably
life itself.
But the
“macropicture” is the surprising (unsurprising?)
revelation that the World Bank, the crusader against
corruption, is a “massive funder of sleaze.” Researchers
of the New Internationalist attribute it to the close
ties between rich-world governments—represented on the
World Bank of governors—and transnational corporations,
which make financial donations to these governments. In
return, the corporations get investment opportunities,
finance and legal protection. According to the US
Senate, this explains why $100 billion of World Bank
loans have been “lost” to corruption in the Bank’s
60-year history.
The
Lesotho Highland Project, which displaced 20,000 rural
people, was helped by the World Bank with $8 million for
design and then lent $110 million for the first dam. A
dozen international firms paid bribes worth $2 million
to project officials. To its credit, the
Lesotho
government pursued the bribed officials and the bribing
companies, two of which, the German Lahmeyer and the
Canadian Acres International, were found guilty of
corruption. The World Bank gave Acres three more
contracts worth $400,000 after its conviction, and then
barred the company after two years. (Lahmeyer was
finally barred by the World Bank for seven years.)
In Peru
the former head of intelligence was caught on video
bribing a judge to rule in favor of the US gold giant
Newmont Mining in a land dispute in Yanacocha. The
Yanacocha mine, in which the World Bank was a
shareholder, polluted local water supplies with heavy
metals, afflicting some 300 Peruvians with mercury
poisoning. After that misadventure, the World Bank
should have steered clear of Newmont, but in February
last year, it approved a $75-million loan to a Newmont
subsidiary in Ghana in spite of the opposition of
citizens’ groups and international NGOs. The locals were
worried about the company’s use of cyanide to extract
gold.
That
much for gold. Now oil. In 2000 the World Bank provided
$3.7 billion for the Chad-Cameron oil-pipeline project
despite civil society’s warning that expanding the oil
industry would just funnel cash to a government with a
history of human-rights abuses. As Sarah Wykes from
Global Witness put it, “The World Bank’s attitude in
Chad does not encourage transparency in the management
of oil revenues.”
Culture
of corruption
Western,
as well as local, commentators superciliously speak of
“the culture of corruption” in the same breath that they
speak of “the culture of impunity.” Corruption is often
represented as an internal disease of a state or
political culture rather than as the result of a complex
set of international relations and circumstances.
“Such
speculations,” wrote Anna Winterbottom, “are useful to
those who wish to disregard the international elements
of the problem of corruption. It also allows
responsibility for the combating of corruption to civil
society, often with little analysis of the capacity of
local civil society organizations to challenge
high-level corruption.”
Poverty
is often cited as the cause of corruption, but it’s
becoming clear that corruption is not an issue of wealth
and poverty. Graft knows no social class. Rampant
corruption exists in luxurious surroundings and in dirt
poor ones. The slums of the city, the boardrooms of
corporations, and the posh enclaves of the rich are
equally suitable locations for it. The only difference
is that criminal laws are heavier on the poor.
But the
most significant piece to the global jigsaw of
corruption, according to Susan Hawley of the British NGO
Corner House, is the complicity of Western governments.
“Two of
the most damaging ways that Northern institutions impact
on corruption in developing countries are bribery by
Northern companies, and money laundering by Northern
banks of bribery and theft of state assets,” says
Hawley. “Western governments turn a blind eye to
activities that they would not tolerate in their own
public officials.”
Ironically, that’s also the price of freedom. Edward
Gibbon, the historian of the decline and fall of the
Roman Empire, said it long ago: “Corruption is the most infallible symptom of
constitutional liberty.” By no means an enemy of
democracy, Gibbon might as well have predicted the dark
side of the Cold War fought by proxy with the peoples of
Africa, Asia and Latin America. Bribery and corruption
proved to be useful weapons in the global fight against
the Soviet imperium—with lasting consequences.
Now
there’s the war against international terrorism. A
former CIA agent Philip Giraldi (no enemy of the Bush
administration) set it out plainly in The American
Conservative: “The American-dominated Coalition
Provisional Authority [CPA] could well prove to be the
most corrupt administration in history…. At least $20
billion that belonged to the Iraqi people has been
wasted, together with hundreds of millions of US
taxpayer dollars. Exactly how many billions of
additional dollars were squandered, stolen, given away,
or simply lost will never be known because of the
deliberate decision by the CPA not to meter oil
exports….”
Action
against corruption
Governments must act against corruption but there’s
probably more hope in citizens’ organizations on the
principle that fighting corruption begins at home. But
it’s arguable that naming and shaming wrongdoers is a
powerful deterrent since confidentiality and libel
threats are often used to hide abuse. Whistle blowers
may get legal protection from retaliation, but few
people in public or corporate life have trust in such
protection. There are always ways of getting back at
whistle blowers.
Still,
coalitions of civil society, public- and private-sector
groups cooperating within and across national borders
have made significant progress in exposing and combating
corruption. The significance is lost in our corner of
the world.
The
mantra in the fight against corruption is good
governance, the promise of politicians every election
time. There is no scarcity of anticorruption manifestos.
But it’s
the coalitions against corruption which have achieved
pockets of success in spite of the seeming impotence,
more like indifference, of governments. Globally,
there’s Transparency International, Unicorn, Global
Witness, Tax Justice Network, Reporters Without Borders;
nationally, there are similar organizations in
Australia,
Britain, Canada, Ireland, and the US, all of which can
be accessed through the Internet. There are “heroes of
integrity” all over the world; they just have to be
connected with one another.
With due
deference to Gibbon, the “infallible symptom of
constitutional liberty” isn’t by any means irremediable.
Stable societies with strong social infrastructures,
respected institutions and a relatively narrow equality
gap are better protected against corruption. On the
other hand, societies in transition—societies in the
Majority World—are vulnerable. To ask what it will take
for them to build strong social infrastructures,
respected institutions, and to narrow the equality gap
sounds quixotic on the one hand and subversive on the
other.
The
highest bidder
The
Filipino experience has yet to graduate from the
frustrated reformism of Crisostomo Ibarra and the tragic
revolutionary anarchism of Simoun. Martial law was to
build a “new society,” Edsa was to establish a regime of
democracy and integrity.
The
outcome so far is a confirmation of George Washington’s
words in his letter to Maj. Gen. Robert Howe in August
17, 1799: Few men have [enough] virtue to withstand the
highest bidder. |
