| John O'Shea, Irish Examiner, 14th December 2006
Bribery occurs everywhere, but in poor countries it can kill, writes John O'Shea of GOAL.
A number of years ago, a respected Irish missionary priest who worked for years at the coalface of development in Uganda, East Africa, explained to me the folly of applying to the Ugandan ministries to access funds donated by Western governments.
The standard procedure was one where the group apply for say €10,000 for an agricultural training programme. After signing relevant documents, before they mysteriously vanish, only €3,000 of the initial €10,000 would be forthcoming - the remaining €7,000 oiling the wheels of corruption in the country.
This is a typical example of what transpires in the developing world, where government structures and institutions are endemically corrupt, and manned by underpaid civil servants who subsidie their low income through graft of this nature.
Little wonder then that the World Bank and United Nations have identified corruption as the single greatest obstacle to economic and social development.
Corruption is a crime against humanity - a killer of initiative and trust. It drives away foreign investment and undermines the development of the rule of law. It saps the lifeblood of a society, quickly pervading all strata to a point where graft and bribery become the norm. In the end, nothing gets done unless the relevant people are bribed.
It deepens inequality, the poorest and most vulnerable bearing the brunt of it. Usually it is they who, unable to pay the bribes, have to forego the basic goods and services that should be free or at least affordable.
It can destroy lives. It leads to the skewing of health spending priorities and the leaching of health budgets, resulting in the neglect of diseases and those communities affected by them. At best corruption can mean hospitals or patients having to overpay for services, at worst it can mean people dying because money meant for drugs for a sick child, or to build a hospital, are siphoned off into private bank accounts. In this way, corruption literally violates human rights, as people are denied the care that their governments are obliged to provide.
At every turn the ordinary citizens of corrupt countries are faced with obstacles. Sometimes the clean water, the education, the basic health care to which they are entitled never reaches them. Most callously, corruption robs African children of a better future.
In my experience, corruption is the single greatest barrier to development.
Massive embezzlement and extortion by officials in recipient countries, weak financial administration, and lack of oversight have limited the effect of international assistance. Out of the more than 50 countries in Africa, only South Africa and Botswana are better off than those African countries freed from colonialism were four decades ago, despite billions of dollars in foreign aid, African political commentator Martin Meredith points out.
By the African Unions’ own estimates, Africa loses $148 billion a year, or a quarter of its entire GDP, to corruption, and they have accepted that no business ever gets done without a bribe changing hands.
According to a 2004 study by a U.S. Senate committee, the World Bank has lost about US $100 billion slated for development in the world’s poorest nations to corruption since 1946 – almost 20% of its total lending portfolio. Other experts estimate that between five and 25% of the US$525 billion the Bank has lent since 1946 has been misused.
Given that up to 40% of private sector companies surveyed worldwide admitted to paying bribes to win government contracts, in a recent World Bank study, it is statistically impossible for corruption not to affect more aid-funded development projects than was currently admitted by donors, bank officials deduced.
Take the outpouring of generosity in the wake of the tsunami. Corruption watchdogs in the worst affected county, Indonesia, estimate that between 30 and 40% of funds that should have been spent helping the victims were lost to corruption.
Yet until recently donor governments preferred to turn a blind eye to corruption, with the word itself considered taboo and often deleted from development discourse.
But a changing tide is beginning to emerge with donor institutions increasingly acknowledging the extent of the problem of corruption in aid projects.
Since taking over the World Bank presidency last year, Paul Wolfowitz, the former US deputy secretary, has put a crackdown on graft at the top of his development agenda, following a line first pursued by his predecessor, James Wolfensohn. This year in particular he showed that he is prepared to cut off all aid to corrupt nations if they don’t change their ways.
Most recently Hilary Benn has called for a new international framework for tough, effective and consistent action to tackle corruption, not least because of the G8’s pledge to increase aid by €50 billion by 2010.
It is hard to see how this windfall bonanza will help eradicate poverty unless governments on the continent are serious about fighting corruption and poverty.
Good governance in all realms in public policy is needed to create sound, accountable institutions that can absorb and use aid effectively.
Those who give aid are right to expect this kind of transparency and professionalism in recipient governments.
When dealing with a country where government institutions – national and regional - are endemically and institutionally corrupt, it is naive in the extreme to believe that ring fencing aid will ensure a donor’s contribution will remain immune from theft.
In the case of Ireland’s aid policy, despite the myriad of evidence that African government structures are rotten to the core with corruption, the Irish Government continue to channel hundreds of millions of taxpayers’ cash through governments which have been proven to be either corrupt or culpable of grave human rights violations.
Ireland has an enviable record in the field of humanitarian assistance. It is our development record and our reputation as a donor, without a hidden strategic agenda, which ensures that our voice is heard and respected in the developing world.
The onus is on the Irish Government to adopt the advice of Nelson Mandela and have the courage to speak out against injustice, by campaigning vocally and vociferously about corruption in aid and development.
Perhaps our government would be wise to listen too, to the words of the international billionaire George Soros. When speaking about corrupt governments, he said: “A democratic government should encourage the use of non-governmental channels. Instead of a bureaucratic approach, we should take an entrepreneurial one.”
John O’Shea is CEO of GOAL which operates in 13 developing countries and has runs programmes in Ugandafor the last 23 years.
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