94 - Winning the Global Battle Against Kleptocrats
“And we’re going all in on dekleptification.” Those were USAID Administrator Samantha Power’s words when she released her agency’s new guide to mitigating the massive role that kleptocrats play in destabilizing and impoverishing two-thirds of our planet’s countries.
She made it clear that USAID wanted to help the globe’s beleaguered nations to “root out deeply entrenched corruption.” Her guide is intended to help countries “implement radical transparency and accountability,” and to stiffen their spins when they attempt to introduce “anti-corruption structures.” The guide wants to assist country after country as each attempts to move “rapidly and aggressively” to combat the corrupt forces that sap life and livelihoods. Power wants to assist endangered nations in introducing meaningful reforms and then making those reforms “harder to reverse.”
Foreign assistance programs from the Nordic nations, the United Kingdom, and Japan may have at various times tried to fend off kleptocrats in the developing world. USAID has been aware of kleptocratic pressures and on the major extent to which corruption has long compromised donor efforts to help countries in Africa, Latin America, the Middle East, and Asia. But not until now has any assistance program publicized a determination to struggle against the corrupt forces that envelope so many poor and otherwise promising nations.
The task is huge. The actions of kleptocrats bedevil at least forty-five of Africa’s fifty-four political jurisdictions, by my quick count. Only Botswana, Mauritius, Cape Verde, the Seychelles, Rwanda, and maybe Senegal and Ghana clearly stand apart from places such as Nigeria, South Africa, and Zimbabwe, where kleptocracy has long flourished.
Just recall ex-President Jacob Zuma’s construction of a $27 million retirement villa with state funds or his conniving with the infamous Gupta brothers to loot almost everything that could turn a profit for him and them in South Africa. Or remember the late President Robert Mugabe’s systematic accumulation of the diamond wealth of Zimbabwe and his grabbing copper, cobalt, and other mineral winnings after intervening militarily in the Congo’s war in 1997.
A president of Malawi made frequent flights to Asia to deposit cash resulting from tenderpreneurship gone rogue. A predecessor gave himself monopolies over trucking and sugar so that he could profit from their high prices. Another Malawian president, in an earlier role, swindled its Strategic Grain Reserve in a time of acute maize scarcity.
All of these actions in Africa alone will have been duplicated in Asia. As we discussed here last week, a all-powerful prime minister of Malaysia relieved his country of at least $1 billion, and used those funds to invest in an American movie, purchase a big yacht, and buy massive amounts of jewelry for his wife, who is standing trial now for her own peculations.
Uruguay, Chile, and Costa Rica have largely avoided the massive frauds that have undermined the governments of the rest of South and Central America. Brazil’s upcoming election next month is between an incumbent president who has found innumerable ways to favor his sons and other family, trading peculation opportunities for votes, against a former president who was jailed for accepting beach-front accommodation in exchange for letting his nation’s big oil company provide kickbacks to politicians.
There is no doubt that corruption greatly hinders the economic and social development of the world’s least well-off jurisdictions. As we have known for decades, corruption distorts priorities. Costly infrastructure may be constructed precisely because it provides rewards to the politicians who award the contracts, not because that road or that stadium is needed, as opposed to a new school or hospital. An earlier president of Malawi constructed a palace of 300 rooms and offices; he never lived in it for more than a few days, but he ordered expatriate workmen to redo the central three-story spiral staircase a dozen times, presumably because he could collect kickbacks.
Pay for play, pay for influence, pay for opportunity to peculate -- such concepts motivate the kleptocrats of the world, whether politicians, bureaucrats, or hustlers (like the Guptas of South Africa). Avarice prevails, especially for the big men (and women) who are out for themselves, not for the public interest.
Administrator Power and her staff will try to limit the efficacy of those who abuse the public trust for personal gain, and thus to strengthen the ability of a country to work on behalf of its long deprived people. Botswana has done so exceptionally well, with decades of solid 7 percent annual growth. But Botswana, like Prime Minister Lee Kuan Yew’s Singapore, was determined from the beginning (1966) to stanch temptations to cheat the public and distort the developmental advances that Botswana wanted for all of its peoples. When gem diamonds were found, Botswana directed the wealth that comes from their unearthing to the people, not to the privileged classes that confiscated wealth from oil in Angola and Nigeria. Thus, Botswanans have long enjoyed per capita incomes higher than nearly all of mainland Africa’s other countries, even those with flowing petroleum.
Deklepification, the USAID guide says, is the process of uprooting entrenched kleptocratic structures. USAID’s initiative is building upon successful reform efforts in Ukraine, Romania, Georgia, Moldova, Malaysia, the Dominican Republic, and elsewhere. In those places reformers innovated radical transparent disclosure requirements, “strictly independent accountability bodies, and structurally inclusive economic growth policies.” USAID now hopes to influence the transitioning of other countries in the same more policy helpful direction.
Exactly how to bring such virtuous betterment to fruition is a complex enterprise. Let us hope that USAID succeeds in injecting some of its worthy improvements into the political process in the many countries permeated with kleptocracy.
USAID says that it will buck up those who seek to reform: “The objective of dekleptification support is to help reformist governments deliver upon public mandates for anti-corruption, converting windows of opportunity into virtuous circles. That’s when inclusive institutions become more effective and popular over time, and thus more resilient to attempts by foreign and domestic kleptocrats to regain power and undermine reform.”
At the very least, this U. S. government initiative will draw attention to one of the key impediments to improved livelihoods and prosperity in much of the world. The World Economic Forum estimates that corruption costs citizens across the globe as much as $2.6 billion annually. RAND Europe claims that Bulgaria loses 20 percent of its annual GDP, for example, to kleptocratic corruption. The World Bank says that corruption costs the world $1 trillion each year. Economists calculate that many of the countries of the developing world lose at least 2 or 3 percent growth because of corruption. Let us hope that Administrator Power’s promising endeavor actually delivers reforms and progress. The peoples of the world will be better off even if her initiative is only marginally successful.