London Indymedia

Africa's battle with corruption

diarist | 12.07.2005 20:54 | G8 2005 | Analysis | Globalisation | Social Struggles | London | World

Not only is much of the west’s third world policy intrinsically corrupt, but those policies also contribute a great deal toward corruption in Africa, the spoils of which may in turn find a warm welcome in the western banking system.

Whilst the Make Poverty History campaign has enjoyed an enormous amount of public support, there has existed, alongside that support, a widespread sense of pessimism and lack of faith in the prospects for its ultimate success. Much of this has been focused on the ability of Africa itself to rise to the challenge of combating poverty and deprivation. In an editorial commenting on the Live8 concerts, the UK’s Sunday Express articulated the sceptical view taken by many in the British media. It warned that “as long as endemic corruption exists in so many African countries then all the best western will in the world will not solve the problems facing [the continent’s] people”. This sceptical position found a receptive audience. A recent YouGov poll showed that 83% of people in the UK are not confident that increases in western aid would be spent wisely, with 79% believing that corruption and incompetence are mostly to blame for Africa's plight.

If we are truly concerned for the fate of Africa, and identify corruption as one of the root causes of its problems, then it seems only sensible to ask if there is anything we ourselves can do to help tackle that corruption.

In the first instance, if we are to demand that certain standards of behaviour are adhered to then we must establish those standards universally; a basic principle of morality and law. Concerned westerners will therefore begin by asking themselves why not one G8 government has ratified the October 2003 UN Convention Against Corruption: an agreement so far backed by only 27 countries - 14 of them African.

The British in particular will take interest in a recent survey by Transparency International which found that UK companies were the eighth biggest payers of bribes in the world last year. They will also wish to consider a recent report by the Royal African Society which noted that "The bribery of overseas public officials was only finally made illegal [by the UK] four years ago [and] no British Citizen has yet been prosecuted......Meanwhile, in some of the British 'overseas territories' not only has [bribery] not been outlawed but payment of bribes is still tax deductible.....". To expand on this last point; the British offshore tax haven of Jersey has still failed to plug a loophole under which bribery payments made in Africa remain legal, despite a promise to the OECD last year that the loophole would be closed. Companies registered on the island are still able to pay bribes with impunity, and the UK government refuses to use its powers of jurisdiction to enforce the change.

The report went on to point out that "The proceeds of corrupt practices in Africa.......are often laundered and made respectable by some of the most well known banks in the City of London [which] is now the laundry of choice for much dirty money. It is estimated that a third of the money stolen by the Nigerian military dictator, Sani Abacha, and found by the Swiss authorities in Swiss banks, had been deposited first in the British banking system until it was clean enough to bank in Switzerland.......The UK was strikingly unhelpful when the new Nigerian government authorities first asked the British for help in retrieving the stolen goods and so far has not repatriated any substantial amount of the money known to be sitting in London's banks."

In addition, according to the Royal African Society report, "British anti-corruption law is patchy and outdated. It has been rubbished by the OECD, Transparency International and British Parliamentarians. Draft legislation brought to Parliament by the government was severely criticised ....for containing obvious loopholes, inconsistencies and a general lack of clarity....the government has yet to commit itself to enacting comprehensive and up to date laws to tackle the problem and providing agencies with resources and power to enforce them.". Those 79% of UK voters who blame corruption for Africa's plight will therefore, in the first instance, have plenty of pertinent questions to ask of their own elected representatives .

In fact, no serious discussion of corruption and poor governance in Africa can ignore the role of the global north. During the Cold War, both sides fought conflicts by proxy and engaged in covert political manipulation throughout the third world. In 1965 for example, the US sent in weapons and CIA personnel to support a pro-western coup where the democratically elected prime minister Patrice Lumumba was replaced by the dictator Joseph Mobutu, who then embarked on a 32-year reign of greed and corruption. According to Christian Aid, Mobutu "stole almost half of the US$12 billion in aid the IMF gave his country during his 32-year reign, recently earning him the title of the third biggest swindler of development aid in history, behind Mohammed Suharto of Indonesia and Ferdinand Marcos of the Philippines" (two more western-backed dictators).

The west ignored Mobuto's corruption, furnishing him with enormous sums of money so long as he supported their strategic interests. It was a theme that played out across the continent, in Angola, Mozambique, Ethiopia, Somalia and elsewhere, with western "aid" and loans provided to buy weapons - from western arms manufacturers - to fight proxy wars in order to further western strategic interests. Now the west demands much of this money back; money lent to buy weapons and fight wars which left African countries poorer and in more need of aid than ever before. For westerners to now complain that any future largesse towards Africa will only be embezzled by corrupt leaders or squandered on military expenditure is something many Africans will find particularly difficult to swallow, given their own bitter experience of the relevant history.

So far we have restricted ourselves to working within and around the common definition of corruption used in discussions concerning African poverty. That is to say, the corruption of African officials and, skirting the boundaries of standard debate, the west’s involvement in African corruption. However, if we are to widen our definition in order to capture the true meaning of the word “corruption” - dishonest behaviour or the the "use of a position of trust for dishonest gain" – and examine how this affects Africa whatever the nationality of the culprits, then we find there are a great many new issues to consider.

There can be few ways to describe, other than as fundamentally corrupt, the continued use by our governments of what is ostensibly "aid" money, not to combat poverty, but to further the strategic interests of power politics and economic gain. Such policies are no means peculiar to the Cold War and its perceived expediencies. Even now the American government agency that calls itself USAID lavishes vast amounts of money on strategic partners like Egypt, Israel and Jordan which dwarf the comparatively meagre sums given to the neediest countries in Africa. The "aid" figures cited by supporters of the west as evidence of its generosity are, more often than not, massively inflated by cash aimed at buying influence and power (for example, by funding the security apparatus of known human rights abusers like Egypt), not ending hunger and disease.

The role of western government's third world policies in furthering their economic interests was best summed up by former UK development minister Clare Short in speech to business leaders in April 1999. Short told her audience that "we bring access to other governments and influence in the multilateral system – such as the World Bank and IMF. You are well aware of the constraints business faces in the regulatory environment for investment in any country... Your ideas on overcoming these constraints can be invaluable when we develop our country strategies… We can use this understanding to inform our dialogue with governments and the multilateral institutions on the reform agenda".

In effect, Short's Department for International Development was offering to shape third world development policy in the interests of business. This was far from a departure in UK policy. As Mark Curtis, historian and former director of the World Development Movement noted in a recent article, "The Foreign Office was not joking when it stated in a 1958 file that aid was "a weapon in the armoury of foreign policy". The Department for International Development's (DfID) recent document, Partnerships with Business, states that most aid recipients "are commercially important to the business sector, not just as export markets, but also for sourcing inputs and raw materials, for foreign investment and joint ventures ... Business may become involved in the identification of key policy and regulatory constraints to the business environment." DfID's aid is "typically" used to "enable the private sector to invest with more confidence". This explains why tens of millions of pounds go to British companies to force water privatisation on poor countries."

According to Clare Short, "the assumption that our moral duties and business interests are in conflict is now demonstrably false". In fact it is demonstrably true, as aid agencies have told the British government on numerous occasions. In May 2005, Christian Aid released a new report, “Aid, death and dogma”, detailing once again the very real conflicts between the UK's business interests and its moral duties.

The report said that “Unfettered free trade policies backed by the British government have led to a crisis in Indian agriculture, spiralling rural debt and an epidemic of suicide among poor farmers. ...... more than 4,000 farmers have killed themselves in the Indian state of Andhra Pradesh since the ‘reforms’ of a hard-line liberalising regime, in part bankrolled by the …DFID. This support also involved funding the free market fundamentalist Adam Smith Institute to run a privatising scheme that cost some 45,000 Indian public sector workers their jobs.....Earlier this year, both DFID and the Africa Commission, set up by Tony Blair, said that countries should no longer be forced to liberalise and privatise in order to receive aid.....[but] the UK’s development policy, along with that of the World Bank and the IMF, is still strongly based on liberalising principles. Legislation is urgently required to turn rhetoric into reality.”

The response of Britain's minister for international development, Gareth Thomas, was that "Christian Aid seems to be behind the times, because our aid isn't tied to conditions such as privatisation". But Thomas, it seems, had failed to inform Britain's Chancellor of the Exchequer, Gordon Brown, of the change in policy. A few weeks later, at a meeting of G8 finance ministers, Brown brokered a deal on third world debt relief; a deal that was widely portrayed as a personal triumph. Paragraph two of the statement the finance ministers subsequently released said that to qualify for debt relief, developing countries would have to "boost private-sector development" and eliminate "impediments to private investment, both domestic and foreign". The conditionality of liberalisation, opening up the markets of economically weak countries to western corporations, was at the very heart of Brown's great victory. Despite this, Thomas was undaunted, repeating in a letter to the Guardian later that month that the UK “does not force developing countries to privatise any service. It is a matter for individual governments to decide how, or indeed whether, to liberalise water or any other sector”. Thomas only neglected to mention that highly indebted countries who continued to pursue that democratic right may well be disqualified from the benefits of Brown’s debt relief deal. Of course the UK would not actually be forcing these countries to liberalise, and one would have to be deeply unkind to accuse the junior minister of engaging in any sort of mendacious, mealy mouthed sophistry.

Lest anyone should believe that adhering to such (voluntary) liberalisation would yield great benefits for the countries concerned - as well as for western businesses - Christian Aid was once again on hand to dispel the myths. A few days after the debt deal was announced the agency released a report setting out the real costs of "free trade" for Africa. "Trade liberalisation has cost sub-Saharan Africa US$272 billion over the past 20 years. Had they not been forced to liberalise as the price of aid, loans and debt relief, sub-Saharan African countries would have had enough extra income to wipe out their debts and have sufficient left over to pay for every child to be vaccinated and go to school. Two decades of liberalisation has cost sub-Saharan Africa roughly what it has received in aid. Effectively, this aid did no more than compensate African countries for the losses they sustained by meeting the conditions that were attached to the aid they received. And these losses dwarf the US$40 billion worth of debt relief agreed at the recent meeting of G7 finance ministers."

Irrespective of these crippling losses for the continent, New Labour’s philanthropists are keen to give still greater latitude to the fearless entrepreneurs of the global north in the opening up of Africa; for the good of its people, naturally. On 9 July 2005 the Business Action for Africa summit opened in London, chaired by the head of Anglo American, and with speakers including executives from Shell, British American Tobacco and De Beers. Delegates were also treated to a message from Tony Blair. The summit was tasked with inaugurating the Investment Climate Facility, a $550m fund to be financed by the UK’s foreign aid budget, the World Bank and the other G8 nations, but “driven and controlled by the private sector”. The fund was launched by Niall Fitzgerald, currently head of Reuters and formerly Unilever’s representative in apartheid South Africa. Fitzgerald hopes the facility will create a “healthy investment climate”, offering business “attractive financial returns compared to competing destinations”. One wonders how attractive the financial returns for Africans living on less than $2 a day will be from this venture, although the results of Christian Aid’s research, not to mention Africa’s own bitter experience, gives us some indication.

To return to the conventional focus of discussions concerning corruption, its worth noting how corrupt western “aid” policies contribute to the form of corruption that so vexes the editorial writers at the Sunday Express. One of the neo-liberal strings attached to western loans is that poor countries cut back on public expenditure. Institutions facing the axe include schools (teaching the literacy that is an essential for holding government to account in a democratic society), the judiciary, the police and civil servants, all of whom are needed to help curtail corruption in any society. Those who keep their jobs often have their wages slashed - making them susceptible to bribery should they wish to splash out on luxury goods like food, or even education, healthcare and water if these essentials are also privatised at the behest of the World Bank and the IMF.

In summary, not only is much of the west’s third world policy intrinsically corrupt, but those policies also contribute a great deal toward corruption in Africa, the spoils of which may in turn find a warm welcome in the western banking system.

There is certainly widespread corruption in Africa, but to blame the continent’s problems principally on the corruption of its officials is, as we have seen, not nearly the whole story. The issue is a complex one, and the west plays a significant role to say the least; both in contributing to African corruption and in imposing its own corrupt policies. In addition, when acknowledging the western role, it is also necessary to acknowledge the massive disparity in financial and political power between Africa and the west, in order to identify who is best placed to solve the problem.

Doubtless there are some, including many well-paid members of the political classes desperate to absolve the west of its share of responsibility for Africa’s plight, who will continue to invoke a corruption that is, for them, all but an intrinsically African cultural deficiency. But there are also, among the 79% in the UK who blame corruption for Africa's problems, those with a genuine desire to help solve the continent’s problems in whatever way they can. The latter group should, in noting the significant, probably decisive role of their own elected governments, at least be encouraged by the fact that much of the corruption damaging Africa can be prevented by political action within their own countries, directed at the governments that they themselves have elected.

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