Corruption is unsustainable
Statement by Peter Eigen, Chairman of
on the launch of the Corruption Perceptions Index 2002
28 August 2002 --
At the UN Monterrey Conference on Financing for Development in
March 2002, US President Bush announced the tying of billions of dollars of
additional development assistance over the next three years to a commitment to
good governance, including anti-corruption measures.
But the initiative cannot come from donor countries alone. That is why I applaud
the New Partnership for Africa's Development, which has bold aims launched by
African leaders, aims that will be in the spotlight this week at the UN Summit
for Sustainable Development in Johannesburg. Good governance and transparency
are essential to sustainable development.
as international institutions and donor bodies must now insist on transparency
and good governance, so must politicians grasp the challenge at the national
level. TI’s new Corruption Perceptions Index, which includes 102 countries – the
highest number in the history of the index - makes it clear that an enormous
task lies ahead of them. They must set the framework for investment such that
the rule of law is applied and enforced fairly, not arbitrarily, so that for
instance extractive industries, such as oil-drilling, are sustainable both for
the natural environment and the development of the local economy.
The Johannesburg Summit must lead to action. Corruption impedes
sustainable development and robs the children of today of the resources they
will need to survive tomorrow. When the leaders sign the Johannesburg
Declaration, they must make pledges they can keep, not raise false hopes.
Take the case of water. The world’s freshwater supplies are
shrinking, and it is more evident than ever that clean drinking water is one of
the earth’s most valuable resources. As water becomes more scarce, particularly
in Asia, efficient planning and fair distribution are vital to sustainability
and to the livelihood of millions, especially children, who are vulnerable to
water-borne disease. Today, 1.2 billion people do not have reliable access to
safe water. Transparent, efficient and honest management of water supplies and
sustainable planning are urgently needed to save lives. At the current rate of
decline of fresh water supplies, as many as 5 billion people will be in danger
of water shortages within two decades.
This year’s catastrophic floods and droughts have been
exacerbated by the effects of illegal logging and deforestation. Major
water-diversion projects may be necessary, but the Three Gorges Dam in China is
just one of many plagued by corruption: decisions on solving the water crisis
are prevented by bribery; it is now an emergency situation: decisions must be
made to meet the needs of future generations, not the short-term profit of
corrupt public officials or businesses.
Politicians increasingly pay lip-service to the fight against
corruption but they fail to act on the clear message of TI's Corruption
Perceptions Index: that they must clamp down on corruption to break the vicious
circle of poverty and graft. Seven out of ten countries score less than 5 out of
10 in the CPI 2002, which reflects perceived levels of corruption among
politicians and public officials – and many of these are the poorest countries.
Political elites and their cronies continue to take kickbacks at
every opportunity. Hand in glove with corrupt business people, they are trapping
whole nations in poverty and hampering sustainable development. Corruption is
perceived to be dangerously high in poor parts of the world, but also in many
countries whose firms invest in developing nations.
In the past year, we have seen
setbacks to the credibility of democratic rule. In parts of South America, the
graft and misrule of political elites have drained confidence in the democratic
structures that emerged after the end of military rule. Above all, it is the
political parties that have undermined economic prosperity. Argentina, where
corruption is perceived to have soared, joins Panama, Honduras, Guatemala,
Nicaragua, Venezuela, Bolivia, Ecuador, Haiti and Paraguay with a score of 3 or
less in the CPI 2002.
In Argentina, first under President Menem, then President de la
the state seems to have been captured by a network of leaders who
misuses it in the service of their business and political interests. That is why
an economic and social crisis has spiralled out of control. If businessmen only
lobby to secure contracts illegally or to obtain sector benefits, their
companies will have no lasting value for any stakeholders.
there are some parts of the world showing progress. The EU candidate countries,
most notably Slovenia, are perceived to be increasingly less corrupt. The recent
steps by President Vladimir Putin to introduce tax reforms and new laws fighting
money-laundering are beginning to show the prospect of a lessening in perceived
corruption in Russia, but the CPI 2002 indicates that Russia has a long way to
go and remains seriously corrupt, together with Uzbekistan, Georgia, Ukraine,
Kazakhstan, Moldova and Azerbaijan, all of which score less than 3 against a
clean score of 10.
The many high-profile scandals and bankruptcies in the United
States in recent months, from Enron through Global Crossing to WorldCom,
underscore the need for there to be far-reaching reforms to strengthen ethics
and social responsibility in business. The recent revelations about money
laundering and fraud, to which former Enron executive Michael Kopper has already
pleaded guilty, could well be just the tip of the iceberg.
Corrupt political elites in the developing world, working
hand-in-hand with greedy business people and unscrupulous investors, are putting
private gain before the welfare of citizens and the economic development of
their countries. From illegal logging to blood diamonds, we are seeing the
plundering of the earth and its people in an unsustainable way.
That is why TI argues for civil society monitoring of both
governments and businesses. They are both part of the problem, and only by
engaging with them both together, can we begin to find solutions, and a level
playing field for all stakeholders in society, including company employees, the
community at large and all those who care about ending poverty and securing a
sustainable ecosystem for the future.
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September 02, 2002