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Could Corruption Sink Uganda’s Development Plan?
Posted in: Anti-Corruption, Blog, Government, In The News by Marco Puccia on May 5, 2010
An interesting article in The Guardian (UK) recently expressed concern over the threat the corruption in Uganda could play in dismantling its otherwise strong National Development Plan. Development experts have commended the plan, but cautioned that its success is strongly predicated on transparency and accountability.
Corruption and the country’s rapid population growth risk hindering the economic growth forecasted in Uganda‘s recent National Development Plan (NDP), according to a report in the Observer newspaper.
The report warns that without proper monitoring and evaluation, the ambitious plan, unveiled earlier this month, would surely fail to deliver.
[...]
“The NDP’s successful implementation will in many ways hinge on the government’s ability to ensure compliance with internal government reporting requirements,” Theophane Nikyema, the United Nations Development Programme (UNDP) resident coordinator, told the Observer.
As a Whistleblower Protection Act (protecting whistleblowers from incrimination and offering 5% of money recovered) makes its way through Parliament, the bill is met with skepticism and a national sentiment that corruption is endemic and a “way of life” in Uganda. A recent World Bank report estimates that $250 million is stolen by government officials every year in Uganda. According to a separate report by the Public Procurement and Disposal of Public Assets Authority, $184 million are lost annually in procurement scams — a number that accounts for approximately 70% of the national budget and more than what the country receives in annual foreign aid!
“Corruption is one of the most serious problems hindering development in Uganda,” says Mukotani Rugyendo, senior advocacy and communications officer, at Uganda Debt Network, an advocacy and lobbying coalition against corruption.
While the Whistleblowers Act above would be a great step in the right direction, the government needs to make a public example that it is willing to prosecute corrupt colleagues. Another necessary step is making sure that villagers know how much money in government contracts was given to build a local school, for example, so that they can account for how the funds are spent. Access to information, a cultural shift in understanding the misdeeds of corruption, the tools for M&E as well as reporting, and the political strength and willpower to prosecute corrupt individuals and institutions are all needed to help stymie corruption in Uganda.
While the goal of the National Development Plan to become a middle-income country in 30 years is reasonably feasible, it could just as reasonably be sunk by the selfish graft and corruption that haunts the country and the continent’s development.
[Photo Credit: Flickr User International Rivers]
Economist: The Corruption Eruption
Posted in: Anti-Corruption, Blog, In The News by Marco Puccia on May 3, 2010
A great article called “The Corruption Eruption” was published in The Economist over the weekend. The article hit on the rising attention around corporate corruption and makes the argument that combating corruption within your organization is not just an ethical issue — it makes strong business sense as well.
The ethical case against corruption is too obvious to need spelling out. But many companies still believe that, in this respect at least, there is a regrettable tension between the dictates of ethics and the logic of business.
False: Bribery Is the Price You Must Pay To Ender Some of the World’s Most Difficult Markets
The article cites the examples of Reebok, Google, Novo Nordisk, and IKEA as Western companies that have successfully prospered in emerging markets without engaging in corruption. In fact, “IKEA has gone to great lengths to fight corruption in Russia, including threatening to halt its expansion in the country, firing managers who pay bribes and buying generators to get around grasping officials holding up grid connections.”
“What is more, Mr Nichols argues, it is misguided to dismiss entire countries as corrupt. Even the greasiest-palmed places are in fact ambivalent about corruption: they invariably have laws against it and frequently produce politicians who campaign against it. Multinationals should help bolster the rules of the game rather than pandering to the most unscrupulous players.”
False: Bribery Can Speed Up The Otherwise Glacial Pace of Bureaucracy
According to a World Bank study by Daniel Kaufmann and Shang-Jin Wei, companies that pay bribes actually end up spending more time negotiating with bureaucrats. Furthermore, the cost of borrowing tends to be much higher for corrupt companies because of regulatory fluctuation.
In fact, standing up against corruption can help speed things along for your organization! The article cites Texaco as a great example of this:
“Texaco, and oil giant now subsumed by Chevron, had such an incorruptible reputation that African border guards were said to wave its jeeps through without engaging in the ritual shakedown”
The Hidden Costs of Corruption
1.) Slippery Slope - Once you give into corruption the first time, more solicitations will invariably follow. Word will quickly spread to others that you are willing to “pay”, and the ingenuity of bribe-takers will quickly come up with new ways to solicit payments. Many corrupt businesses and organizations open themselves up to blackmail.
2.) The Psychological Toll – The article cites Philip Nichols of the Wharton School explaining that “corrupt business people habitually compare their habit to having an affair: no sooner have you given in to temptation than you are trapped in a world of secrecy and guilt.”
Increased Visibility, Legal Pressure Being Applied
With increased methods for rapid and anonymous communication (Blogging, Twitter, E-mail, etc.), more public pressure is being applied to companies and organizations to act in an ethical manner. Corruption is much more difficult to hide these days, and the likelihood of getting caught is much higher today than even just 5-10 years ago.
Legal pressure on pursuing cases of corruption is also on the rise. Legislation such as the Foreign Corrupt Practices Act (FCPA) and Britain’s Bribery Act has been revamped with stricter authorities and increased attention. Legislation has been left open to interpretation, allowing prosecutors to pursue even less-blatant cases of corruption (eg. lavish entertainment). Under the legislation, senior managers can be held personally liable for corruption on their watch — risking both massive fines and prison time.
The Department of Justice is actively pursing 150 FCPA-related cases today, as opposed to only 8 in 2001. 38 countries have signed onto the OECD’s 1997 anti-corruption convention (opening the door for cross-border prosecutions). Several high-profile cases including Britain’s BAE Systems being fined $140m, Daimler paying out $184m in fines, and Seimens being fined $1.6 billion has set a new tone in the fight against corruption.
The Next Steps…
According to a survey of 500 prominent firms by Transparency International, the average company only scored 17 out of a possible 50 points on “anti-corruption practices”. The article reads:
Companies need to develop explicit codes of conduct on corruption, train their staff to handle demands for pay-offs and back them up when they refuse them.
Explicitly standing up against corruption through your organization is not just a piece of “Corporate Social Responsibility” or ethical standards. It can literally strengthen your organization and ability to conduct business in the market you are trying to reach!
TED Video: Peter Eigen, Transparency International
Posted in: Anti-Corruption, Blog, Foreign Assistance, Video by Marco Puccia on April 28, 2010
Peter Eigen was one of the very first people to bring the issue of “corruption” to the mainstream. Institutions like the World Bank, his former employer, had policies against interfering in the internal affairs or politics of any member country — and at the time corruption was written off as merely a political issue. But Peter Eigen recognized the deeper social and economic consequences of corruption: It destroys credibility in institutions, tears apart societies, and serves as a barrier to economic growth and a black hole for investment in development projects. Peter Eigen was a trailblazer when he started Transparency International! Check out his TED talk here:
It’s Our Money, Where’s It Gone?
Posted in: Anti-Corruption, Blog, Video by Marco Puccia on December 28, 2009
Global Integrity posted this video on their blog, Global Integrity Commons, a while back and I wanted to make sure I share it with our readers as well. The following documentary was put together by The International Budget Partnership and shows how community members in Kenya are standing up to challenge corruption in their district by demanding access to information and conducting their own “social audits”.
This is a process that has been taken up in many countries across the globe, where ordinary citizens or councils of elders are taking charge of holding those with the discretion of spending taxpayer money to account through social/communal audits. It’s an awesome trend to see, and this documentary does a great job of capturing the movement!
International Anti-Corruption Day: Don’t Let Corruption Kill Development
Posted in: Anti-Corruption, Blog, Government by Anand Chandrasekhar on December 10, 2009
December 9th was marked all over the world as International Anti-corruption Day. The theme for this year was “Don’t let corruption kill development”. An apt theme considering that the World Bank Institute puts the annual loss attributed to corruption around the $1 trillion mark. As the Secretary General of the U.N said in his commemorating speech;
“When public money is stolen for private gain, it means fewer resources to build schools, hospitals, roads and water treatment facilities. When foreign aid is diverted into private bank accounts, major infrastructure projects come to a halt. Corruption enables fake or substandard medicines to be dumped on the market, and hazardous waste to be dumped in landfill sites and in oceans. The vulnerable suffer first and worst.”
Rooting Out Corruption in Afghanistan
Posted in: Anti-Corruption, Blog, Government, Video by Marco Puccia on December 7, 2009
Corruption in Afghanistan stands to be the largest prospective challenge to overcome in the country’s “nation building” effort. It can be argued that fight against corruption and an illicit underground economy in Afghanistan will be a larger force to combat that both the Taliban and Al Qaeda. Aleksandr Shkolnikov recently published a post on the CIPE Development Blog posing the question, “What is to be done?”
His post included this excellent video from CBS News that I wanted to make sure I share with my readers here:
The Story of John Githongo
Posted in: Anti-Corruption, Blog, Government by Marco Puccia on November 5, 2009
It was February of 2005, and a startled Kenyan government was in the midst of an international manhunt. Police cars scoured the streets of Nairobi in the dark of night; officers knocking on doors, barking dogs in tow. The Kenyan High Commission in London had deployed its own search team. The man they were looking for: freshly resigned Permanent Secretary of Ethics and Governance, John Githongo.
Days earlier, on the morning of February 6th, 2005, Mr. Githongo had arrived, suitcases in hand, on the front steps of a London flat owned by friend and former colleague Michela Wrong. He had snuck away from his hotel where he was staying on official business. After settling in, he told his confidant, “One of the first things I need to do is resign”.
Book Review: It’s Our Turn to Eat
Posted in: Anti-Corruption, Blog, Foreign Assistance, Government by Marco Puccia on
It’s Our Turn to Eat, by Michela Wrong, tells the story of John Githongo — the famous whistle-blower of corruption under the Kibaki Administration in Kenya. Before picking up the book, I was concerned that I would be reading a lot of what I already knew — considering A. I wrote a paper on him several months ago, and B. I had explored a lot of the inner-workings of Kenyan politics during many-a-nights after Kiswahili class at a nearby bar with my professor going hours-on-end. As I began reading, however, I was enthralled by the insider and historical perspective that Wrong presents. I suppose to be expected, given Michela Wrong is a longtime friend of John Githongo and the first person he reached out to in his self-imposed exile in London.