Corruption – a global cancer

The President who loots his country’s treasury while his country starves. The official who won’t authorise a permit unless he’s paid a backhander. The economist who advises governments to either open their economy to outside business or face economic isolation.

What do all these people have in common?

They’re all indulging in corruption and if you think such an abuse of power isn’t harming anyone, think again.

According to the United Nations corruption “impedes the development of markets, drives away investment, increases the costs of doing business, and undermines the rule of law.”

Corruption takes many forms but its simplest definition is “the abuse of entrusted power for private gain” – mostly in relation to governments.

While mostly thought of as a third world problem, the truth is corruption happens everywhere – even in the world’s most developed nations – and includes bribery, cronyism, nepotism, embezzlement and extortion.

Transparency International, a non-governmental organisation, releases an annual list called the Corruptions Perception Index which rates each country on this issue.

The 2009 Index put New Zealand at the top of the list (meaning least corrupt) with 9.4 out of 10.

An examination of the index over the last 7 years reveals the top 10 list has been dominated by New Zealand and the Scandinavian countries of Finland, Iceland, Sweden and Denmark, with Singapore the solo Asian representative.

These countries do have a lot in common, not least strong institutions and legal systems. The top 10 countries also have relatively prosperous economies giving people little incentive to illegally profit for personal gain.

Population may also play a part. There are no countries in the current top 10 with a population over 35 million people. In fact the top 10 is dominated by countries with a population of less than 10 million.

Just as the top 10 have things in common, the same can be said about the countries at the bottom of the index.

The common denominator for these countries is poverty. In many cases they also suffer from armed conflict. Both create insecurity which feeds corruption.

Some commentators, however, say corruption is a result of colonisation.

Leaders of colonies were answerable ‘upwards’ to their colonial masters, not ‘downwards’ to the people, because it was the funding and military support that kept them in power, not elections.

And corruption was in the masters’ interest because it allowed flexible rules and cheap access to local resources.

Monitoring institutions were not a priority in the arrangement, and the culture of corruption flourished.

White-dominated colonies like Australia, Canada and New Zealand gave power to these institutions because being the majority of the population, they were to be the victims of any corruption and therefore wanted it minimised.

Indeed, when trying to work out why some nations are more corrupt than others, it’s a chicken and egg situation. Do nations become corrupt because they’re poor or do nations become poor because they’re corrupt?

Certainly in some countries, corruption is now part of the culture. After all, if you’re surrounded by it in everyday life, it becomes normal and easier to indulge in it yourself.

The issue of corruption is huge and isn’t going away anytime soon.

Organisations like the OECD, the World Bank and the United Nations are, on the surface, doing their best to combat it, with initiatives like the rather drawn-out OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

However, when observed closely these organisations are influenced by the very forms of corrupting, unaccountable power they apparently seek to address.

This reminds us of how big the scope of corruption is.

Yes, it’s police on the take and officials skimming money off foreign aid coming into their country. But it also involves large companies who gain from the assistance of the governments of rich countries in which they are based.

It is this form of corruption that fuels it in the poorest countries for the commercial benefit of their wealthier counterparts.

In 2008, German company Siemens AG paid a world record $US1.6 billion dollar fine for bribery, which they said was a necessary business tool to keep the company competitive overseas.

Other well known names are also under investigation which signals that authorities are taking bribery and corruption seriously.

However, only the most hopeful person would think that given the size, scope and diversity of the problem, corruption will be under control anytime soon.

By Jo Blick