Corruption and the private sector

Last week, Secretary General of the Organization of American States (OAS) José Miguel Insulza used his opening address at the Second Conference on the Progress and Challenges in Hemispheric Cooperation against Corruption to reflect on the role that corruption continues to play in retarding development and disfiguring democracy, particularly in developing countries. In his presentation Secretary General Insulza asserted, among other things, that the private sector being “part of the problem” of global corruption ought to see itself as part of the solution.

Here in Guyana not a few businessmen concede that the private sector is indeed part of the problem of corruption, though the practice is usually justified using the argument that businessmen are actually victims of extortionist government officials who have so disfigured some state institutions that corruption has become the norm rather than the exception, and that you either become part of that norm or else concede considerable advantage to those of your competitors who are prepared to do so. This is precisely the argument that has been made in respect of transacting business with the Customs Department and some other state agencies.

Other examples of seemingly corrupt practices to which state officials and private contractors are believed to be party are to be found in the various discrepancies in the local tender and procurement procedures, particularly at the level of government ministries and state institutions. The details of these – ranging from blatant flouting of tender procedures to dubious contractual arrangements for the procurement of goods and services on behalf of the state – are set down with monotonous regularity in successive Annual Reports of the Auditor General though government appears to be stricken by either an inability or a reluctance to investigate these irregularities, even in the face of the most compelling evidence of wrongdoing.

Corruption, both here in Guyana and elsewhere, persists chiefly because there has been a demonstrable absence of will on the part of the state to do everything in its power to rein in corrupt practices.

As to whether or not corrupt private sector officials are unduly concerned about what the OAS Secretary General calls “probity and transparency” in transactions involving the state and the private sector, the evidence would appear to suggest that they are not. More than that one fears that what Mr Insulza describes as considerations of “legal imperative and a social good for the citizenry and the international community” simply do not belong in a culture of corruption. Corrupt practices – not only in Guyana but everywhere – are driven by an absence of concern for either legal or moral considerations. In fact, such practices are designed for the precise reason of securing unfair advantage.

There are cases too in which corruption  manifests itself beyond the level of an aberrant few state functionaries who do deals with private businessmen. Some states are known to be thoroughly corrupt, from top down, so that there need be no fear of legal consequence since those who are the custodians of the law are the very ones guilty of transgressions. As the nineteenth century economist and statesman Frederic Bastiat put it, “When plunder becomes a way of life for a group of men living together in a society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.”  So that corruption, as it is in some societies, assumes the nature of a virtue rather than a vice and – as some of our private sector people have asserted – those who eschew corrupt practices not only become laughing stocks but lose out materially to those who embrace it.

Here in Guyana two considerations render the mitigation of the corrupt practices between the public sector and business difficult to accomplish. First, there is the perception that the official response to corrupt practices is being prosecuted largely at the level of rhetoric that is invariably followed by a lack of any kind of remedial or  corrective action. There are simply far too many cases of suspected corrupt practices reflected in overpayments to private contractors that are never recouped, seeming shakedowns by Customs officers, questionable practices in the awarding of contracts and other kinds of irregularities that warrant official attention but get little if any.

While, therefore, we agree with Secretary General  Insulza’s observation that there is inspiration to be drawn “from a  participatory model that allows for collaborative efforts among those who wish to contribute to a solution to this problem,” the problem of corruption, that is, we fear that it seems sometimes that those seeking “a solution” grow fewer and fewer in number and that the glorification of corrupt practices suggests that contrary to what Mr Insulza appears to believe those practices benefit more than just “a few corrupt people.”

How to persuade states to pursue “criminalization of national and transnational bribery” in cases where some states are themselves riddled with corruption is a question which international organizations with anti-corruption agendas are yet to get their minds around. More than that, how to rein in corruption at the level of the private sector if you operate in a country where you pay under the table, so to speak, for every state service ranging from the timely acquisition of an import licence to expediting the clearance of goods imported into a country is not a question which the OAS Secretary General seeks to answer, but one which must surely have crossed his mind.

At the same conference Colombian Vice – President Angelino Garzon admonished the private sector to recognize that the state is not “a spoil of war” and that “the practice of bribery and of trying to corrupt public officials does a lot of harm to society.” The sad truth is that – with due respect to the views of the Colombian Vice- President – the state is, sometimes, “a spoil of war” and those who control the machinery of the state often own it. What this means of course is that public officials, frequently, are by no means victims but ‘sellers’ of state services in a marketplace where demand is invariably high and where there is no shortage of private sector ‘buyers’ who are only too willing to acquire those services.

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