From poverty to power - Oxfam-Québec

From poverty to power - Oxfam-Québec From poverty to power - Oxfam-Québec

12.07.2015 Views

2 POWER AND POLITICS I STEAL, THEREFORE I AMdifficult not to sell their votes for a bag of flour, and under-paid civilservants often fail to resist the temptation of a bribe. But attitudes andbeliefs also play a role. Oxfam staff in East Africa, Indonesia, andCentral America report a widespread belief in these regions thatpeople in positions of influence should help their families and homecommunity, a mindset that often leads to public tolerance of whatelsewhere would be seen as unacceptable graft.Poverty encourages petty corruption and, conversely, developmentdiminishes the threat it poses. Development increases the capacity ofthe government to collect taxes, pay decent wages, and spend more ondetecting and punishing malfeasance among officials – all of whichhelp to make corruption less corrosive of the system. In Cambodiaand the Czech Republic, salary top-ups for health workers, combinedwith commitments to codes of ethical good practice, led to a decline ininformal bribe payments and greater access to health services for poorpeople. 118 Unions and professional associations play an importantrole as partners in developing professional standards and in engagingworkers in improving services.The huge variations between countries at similar levels ofdevelopment suggest that more can be done than merely waiting forgrowth to help make the problem manageable. Japan exhibits similarlevels of corruption to much poorer Chile, according to TransparencyInternational’s 2007 Corruption Perception Index, while Uruguayranks well ahead of Italy, despite having only one-seventh of itsincome per capita. 119Grand corruption is different. It not only affects national budgets,as in the case of presidents Mobutu (Zaire) and Suharto (Indonesia),each of whom stole billions, but also the private sector, where ‘assetstripping’ by executives and owners robs industry of its ability toinvest, develop, and compete. More subtly, close ties between membersof socio-economic elites can lead to politicians and officials settingpolicies that favour their friends and family members in the privatesector, rather than the economy as a whole. In sectors such as oil and gas,arms, and construction, sizable bribes are routinely paid by large firmsto state officials in exchange for contracts, while numerous privatisationprogrammes have provided the pretext for large-scale transfers ofwealth from the state to well-connected members of the elite.87

FROM POVERTY TO POWERTHE CURSE OF WEALTHA fundamental factor contributing to grand corruption is a country’sreliance on natural resources. The great Uruguayan writer EduardoGaleano termed it the ‘curse of wealth’. Abundant deposits of oil, gas,or minerals act as poison in the bloodstream of politics, creatingincentives for get-rich-quick power-mongering, rather than the longterminvestment and hard slog that has underlain the success ofresource-poor countries such as South Korea or Taiwan whose onlyeconomic asset was their people. In Nigeria, by contrast, $300bn in oilrevenues has ‘disappeared’ since the 1960s, 120 leaving little tangibleimpact on a nation virtually devoid of paved roads, in which over 70per cent of the population live on less than $1 a day. 121Natural resources can sever the ‘social contract’ between state andcitizen. When a government can rely on royalties from oil, it neednot tax citizens to raise revenue, and so need not cultivate publiclegitimacy but instead retains power through bribery. In such circumstances,democracy can be a double-edged sword. A study by PaulCollier of Oxford University found that, where countries have bothcompetitive elections and ‘checks and balances’ in the form of freemedia and an independent judiciary, natural resources generallybenefit the economy, because governments are forced to be moreaccountable and effective. However, take away the institutional checksand balances, and competitive elections seem to unleash even worsecorruption and chaos, as parties jostle to get their hands on the wealth.In such countries, economic growth is even lower than under authoritarianregimes. The implications for the future of Iraq are sombre. 122Natural resources are not a developmental death sentence, however.The way Botswana has managed its diamond wealth stands in starkcontrast with the devastation wrought by ‘blood diamonds’in Angola,Sierra Leone, and the DRC, while Malaysia has graduated from tin andrubber production to microwaves and mobile phones. What mattersis having, or creating, sufficiently strong and accountable institutionsto cope with the money coming out of the ground.Effective states can resist the lure of spoils politics and build longtermdevelopment based on revenue from natural resource windfalls.Norway charges an estimated 75 per cent tax rate on its oil and has88

2 POWER AND POLITICS I STEAL, THEREFORE I AMdifficult not <strong>to</strong> sell their votes for a bag of flour, and under-paid civilservants often fail <strong>to</strong> resist the temptation of a bribe. But attitudes andbeliefs also play a role. <strong>Oxfam</strong> staff in East Africa, Indonesia, andCentral America report a widespread belief in these regions thatpeople in positions of influence should help their families and homecommunity, a mindset that often leads <strong>to</strong> public <strong>to</strong>lerance of whatelsewhere would be seen as unacceptable graft.Poverty encourages petty corruption and, conversely, developmentdiminishes the threat it poses. Development increases the capacity ofthe government <strong>to</strong> collect taxes, pay decent wages, and spend more ondetecting and punishing malfeasance among officials – all of whichhelp <strong>to</strong> make corruption less corrosive of the system. In Cambodiaand the Czech Republic, salary <strong>to</strong>p-ups for health workers, combinedwith commitments <strong>to</strong> codes of ethical good practice, led <strong>to</strong> a decline ininformal bribe payments and greater access <strong>to</strong> health services for poorpeople. 118 Unions and professional associations play an importantrole as partners in developing professional standards and in engagingworkers in improving services.The huge variations between countries at similar levels ofdevelopment suggest that more can be done than merely waiting forgrowth <strong>to</strong> help make the problem manageable. Japan exhibits similarlevels of corruption <strong>to</strong> much poorer Chile, according <strong>to</strong> TransparencyInternational’s 2007 Corruption Perception Index, while Uruguayranks well ahead of Italy, despite having only one-seventh of itsincome per capita. 119Grand corruption is different. It not only affects national budgets,as in the case of presidents Mobutu (Zaire) and Suhar<strong>to</strong> (Indonesia),each of whom s<strong>to</strong>le billions, but also the private sec<strong>to</strong>r, where ‘assetstripping’ by executives and owners robs industry of its ability <strong>to</strong>invest, develop, and compete. More subtly, close ties between membersof socio-economic elites can lead <strong>to</strong> politicians and officials settingpolicies that favour their friends and family members in the privatesec<strong>to</strong>r, rather than the economy as a whole. In sec<strong>to</strong>rs such as oil and gas,arms, and construction, sizable bribes are routinely paid by large firms<strong>to</strong> state officials in exchange for contracts, while numerous privatisationprogrammes have provided the pretext for large-scale transfers ofwealth from the state <strong>to</strong> well-connected members of the elite.87

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