Corruption’s Cost in the Arab World

Courtesy John K. Cooley

Athens–Do you need a local driver’s license in, say, Lebanon, Egypt, or Cameroon?

Well, weeks of paperwork and delays may be avoided if you resort to the Mideastern practice of slipping baksheesh – a traditional term for a bribe – to the right official.

Want to park your car on a street in traffic-choked Cairo? Or in a safe place in bomb-threatened Kabul? The friendly cop is likely to look the other way – for a banknote or two.

Petty corruption, virtually universal in much of the Middle East, Africa, Asia, and parts of Latin America, is only the iceberg’s tip. Starting a business or angling for a government contract can call for sometimes astronomical under-the-table outlays in cash or kind. “Corruption and lack of transparency [in business and government deals] still constitute a very important challenge for the development of the [Mideast] region,” reports Transparency International (TI), a Berlin-based anticorruption organization, in its latest annual report.

Another private research group, Enterprise Surveys, found that Bangladesh leads in this category. Nearly 86 percent of firms working there needed to present tax inspectors with “gifts.” Here in the European Union, Greece led this category with a hefty 56 percent of firms.

In 2004, Arab experts recently surveyed development in their own region for the UN Development Program’s Arab Human Development Report. Surveys in five main countries of the area showed that 90 percent of people believed that political and economic corruption pervaded their societies. A main complaint: People in power monopolize the main sectors of the economy, “either directly or as ‘partners’ of successful businessmen.”

Transparency International’s new index of perceptions of public corruption in 180 countries and territories scores them from zero to 10, with zero the maximum level of corruption and 10 the lowest.

It’s clear from this list that countries suffering from dictatorships, authoritarian regimes, or conflict often display the most corruption; democracies, the least. Burma and Somalia are at rock bottom at 1.4 on the index; New Zealand, Finland, and Denmark emerge with the least corrupt societies at 9.4 each. The US, by comparison, ranks 20th at 7.2.

In 2005 the United Nations Convention Against Corruption entered into force.

Jordan, Kuwait, Libya, Qatar (which ranks with Israel about 6 on a scale of 10 on the Enterprise Surveys list as the least corrupt Mideast states), the United Arab Emirates, and Yemen all ratified the UNCAC.

Jordan has led Arab-area efforts to promote and implement legal reforms required by the UNCAC. Kuwait’s ratings drop this past year jolted the wealthy oil state. In late-September a former Kuwait Defense Ministry official was sentenced to life imprisonment and fined $72 million for corruption. After Bahrain’s crown prince publicly warned that no minister accused of corruption could escape justice, the government recently began to arrest allegedly corrupt business executives.

Present and past Western administrations haven’t always blocked corrupt practices by their firms. Former Prime Minister Tony Blair’s British government had to quash “on national security grounds” an investigation of alleged huge under-the-table payments to high-ranking Saudis on a huge military aircraft deal dating back to the 1980s. Some US officials and congressmen would like to find out a lot more about recent allegations in Vanity Fair magazine. The article charges that some $9 billion in US bank notes flown to Iraq from Federal Reserve funds in early months of the 2003 invasion completely vanished or were never properly accounted for.

Clearly, Western governments who would claim the moral high ground and lead the hard slog against global baksheesh should scrutinize their own households. They might find that their glass houses may not withstand stones thrown by others.

John K. Cooley, a former Monitor correspondent, covered the Middle East and North Africa for more than 40 years. His forthcoming book is “Currency Wars.”

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