Speaking at Transparency International’s (TI) Annual Anti-Corruption Lecture, John Githongo, Kenya’s former anti-corruption tsar, spoke with cautious optimism.
On the one hand, he proclaimed: “Today we are witnessing a unique convergence of potentially positive developments in the fight against corruption – one that has not existed since the end of the Cold War”. Yet at the same time he also emphasised that we are still facing “the continuing reality of systemised corruption”.
Indeed corruption is a major problem which continues to undermine institutions, economies and societies – not least in Africa. In TI’s Corruption Perceptions Index 2012, 90% of African countries scored below 50, (0 being “highly corrupt”, and 100 representing a lack of corruption) and Somalia was deemed to be the worst offending African country with a score of just 8, joint with Afghanistan and North Korea.
But despite the picture sometimes painted, corruption is by no means a uniquely African phenomenon. In fact, taking a closer look at corruption and expanding our understanding to beyond just bribes and kickbacks enables us to see that corruption exists across the world and that even in ‘African’ corruption, developed countries are deeply implicated.
Firstly, a closer look at TI’s index shows that 70% of all countries scored less than 50 out of 100, with a global average of just 43. Corruption is a problem with which most of the world is still struggling, developed countries included.
In a telling case in 2008, for example, German multinational Siemens was found to have had a slush fund totalling more than €1.3 billion ($1.7 billion) to help win overseas contracts from 2001 to 2007. The company was investigated for bribe-paying, corruption and falsifying corporate books and, after much plea bargaining and negotiating, was fined a record $800 million.
This kind of corruption can sometimes also be part and parcel of African corruption in that such companies are on the lesser-examined supply side of bribes while African governments are on the demand side. In 2010, for instance, BAE Systems, one of the world’s largest defence contractors, pled guilty to criminal charges regarding contracts won from countries including Tanzania and South Africa. BAE was investigated by the UK’s Serious Fraud Office in a long-running case and ended up paying £286 million ($460 million) in fines.
The global financial crisis, which was caused in large part by the dubious and often fraudulent activities of financial corporations, “woke us up in Africa to a new perspective of corruption”, explained Githongo in his speech. “It became a matter of concerted interest among Africa’s chattering classes – long accustomed to Western lectures on corruption – that this is not a uniquely African or even a Third World thing.”
Additionally, if we are to truly understand the challenges of corruption faced by developing countries, we must recognise that the kinds of kickbacks and bribes mentioned above – and measured by TI’s indices – are just one dimension of corruption. Taking a broader perspective, we can see that while many activities may not be corrupt in terms of explicitly contravening specific laws, they may nevertheless undermine human rights, democracy and transparency. And when we recognise this, the extent to which developed countries are implicated in the problems facing Africa is brought into stark relief.
There are many important examples of this, one of which is the role of governmental export credit agencies. Many Western leaders, such as British Prime Minster David Cameron, have emphasised the need to “tackle the causes of poverty, not just its symptoms”. But despite this, many Western governments – through export credit agencies – support projects abroad that not only involve economic corruption but are linked to human rights abuses and the maintenance of inequality. Furthermore, to add insult to injury, they also often generate sovereign debt in the process which then constrains governments’ capacities domestically.
One government heavily implicated in this kind of corruption and accumulation of ‘toxic’ debt is the UK and its British Export Credits Guarantee Department (ECGD). The ECGD helps exporters invest in ‘high-risk’ projects – many of which allegedly involve corruption, environmental destruction, or arms sales leading to human rights abuses.
The Jubilee Debt Campaign estimates, for example, that around one-quarter of Egypt’s $150 million debt to the UK comes from loans for military equipment which was used to prop up the regime of former president Hosni Mubarak. Similarly, 11% of Zimbabwe’s current debt to the UK is owed for the purchasing of 1,000 police Land-Rovers which were used in internal repression. More broadly in Zimbabwe, according to Tim Jones, Policy Officer at Jubilee Debt Campaign, “Debt has played a key role in the tragedies that many Zimbabweans have suffered over the last twenty years. Dodgy projects, debt repayments and failed economic policies contributed to economic decline.”
Indeed, a report by the Jubilee Debt Campaign also suggests that whilst the British government asserts that aid is conditional on the pursuit of anti-corruption measures by the recipient country, they are nevertheless providing financial support (through export credits) for deals which could involve corruption.
The report explains, for example, that the agreement for the 1986 Turkwel Gorge Hydro-Electric Power Station in Kenya was alleged to have involved considerable payments to high-level Kenyan authorities. These individuals stood to gain personally from a deal of whose shortcomings they were well-aware – namely, that the final contract price was more than double what the government would have had to pay through a competitive tender process, that the proposed location of the power station was on dangerous tectonic fault lines, and that the flow of the Turkwel river from which power was to be generated was unreliable. But nevertheless, the ECGD issued a multi-million dollar guarantee to a British consulting firm to work on the doomed project. The Kenyan press has since dubbed the project a “stinking scandal”, and nearly 30 years later Kenya still owes money to the ECGD.
In fact, crucially compounding these problems is the sovereign debt they lead to, often meaning citizens are paying for the very means by which they are oppressed or led to suffer.
In Egypt, for example, $22 million will be spent this year servicing debt accrued by the Mubarak regime for military purchases. Despite a pledge by the Liberal Democrats, the junior party in the ruling coalition government, to invalidate ‘dictator debts’, the UK is demanding this debt be repaid despite the fact Mubarak was overthrown and widely condemned by the international community. Elsewhere, some countries including Nigeria, Lesotho and Gabon reportedly owe more than 50% of their national debt to Export Credit Agencies such as the British ECGD. And some studies have suggested that a number of countries are spending more each year on servicing their debt than they do on all public services combined.
While not all of these loans are necessarily economically corrupt, they contribute to a climate of broader corruption in which moral standards are seemingly bypassed in pursuit of economic gain by developed countries.
Githongo entitled his TI-UK Annual Anti-Corruption Lecture “Crossroads in the fight against corruption” – a poignant reminder that whilst the potential for change is perhaps more prominent than ever, the actions of the international community, governments and corporations can hamper real progress.
In his closing words, Githongo argued that “the moment is unique, in part because the wider population, especially the youth, are demanding [reform] already”. But local efforts can only be effective if they are not contradicted by wide-scale corruption at the upper echelons of public life, including at the international level. It is important that governments of developed countries recognise this demand for change and implement a real transformation in their support of developing countries.
Corruption, toxic debt and dubious arms deals continue to plague developing countries, but the blame for this cannot be solely placed on those in the developing world. Instead, developed countries must look a little closer to home and realise that true change requires transparency and accountability at all levels and in all states.
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