Arab Fight against Corruption and Bribery
Michel Morkos Al Hayat - 25/08/08//
Corruption is a global phenomenon that hits governing structures in rich countries and spreads like wildfire in poor ones. It makes a few rich and turns the people poorer, to the detriment of growth. Arab nations are among the most corrupt and public money-wasting countries, not because some groups accuse their ruling governments of corruption, but rather because the Corruption Perceptions Index (CPI) - released by Transparency International based on studies carried out by the World Bank, the Economic Intelligence Unit, the African Development Bank and the Asian Development Bank - shows that 15 out of 19 Arab countries lag behind in fighting corruption.
In this regard, the UAE and Morocco were the scene last week of two major developments related to the fight against corruption and bribery.
The Ruler of Dubai (VP and PM of the UAE) issued a statement firmly calling to fight "corruption, bribery and abuse of power" as rumors spread over violations and irregularities in some public real estate institutions. The government insisted on fighting all kinds of corruption in public or private institutions. With the country buttressing its rule, it reached the top two ranks among Arab countries in terms of transparent governance and fight against corruption, as shows the 2006/2007 CPI.
As Morocco celebrated the anniversary of the Revolution of King and People, the King championed "good economic governance" calling for fighting corruption, bribery and waste of public funds, and providing a suitable economic environment that relieves the needy segments of society. Morocco aims at improving its transparency ranking, moving from the 11th position (on an Arab level) in 2006 to the 8th in 2007 and from the 79th (globally) to the 72nd position. While the UAE ranks among the first four Arab countries that earned positive points in the transparency index, it did however fall from the first to the second spot (on an Arab level) and from the 31st to the 34th spot (globally).
Corruption is one of the most important impediments to economic growth, especially in poor countries where officials go too far in bribery and waste public funds, abusing the entrusted power for private gains. They usually agree with other officials in donor or investing countries and attempt together to make illegal profits. Rich top scoring countries on the transparency scale, carry out - through their citizens - corruption in poor countries. They forge mafia-like alliances that squander public funds, decrease the feasibility of projects and siphon funds away to world banks that adopt secrecy. According to an UNCTAD report, the capitals smuggled from Africa in 30 years reached $400 billion - equaling almost double the continent's debts. In addition, the average funds smuggled between 1991 and 2004 reached $13 billion annually with 30 billions smuggled in 2003 alone.
The 2007 transparency indexes show tight links between poverty and mounting corruption worldwide. Still, wealth is a source of corruption. Major money institutions rob small ones and officials in institutions proven to be transparent may be lured by wealth. This has happened in large financial institutions that collapsed following the US mortgage crisis. Banks with global reputation had to buy off their clients' shares, because they were deceptive. The State of New York forced five floundering firms - namely Merrill Lynch, UBS and City Group - to buy $43 billion worth of stocks from shareholders. In France, a misplaced investment caused a $7 billion loss to Société Générale.
Accordingly, in countries like the UAE, where global money surpluses flow from oil, real estate, stocks or any other source, it is natural for riches to lure senior ranking officials and civil servants, especially amidst the mounting demand and the soaring prices of real estate. In countries like Morocco, where bribery and favoritism cost the economy 2.5 percent of its GDP (World Bank report), strict anti-corruption measures need to be taken.
In general, 15 Arab nations must step up their efforts to reach middle ranks in CPI. Corruption varies by country, whether imported or caused by the rulers, the people or by private or public institutions. In all cases, corruption holds back growth in numerous Arab countries in Africa and the Middle East.
Will the Arab Development Summit due next January 2009 save the ruling political structure from corruption?
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