MAKE CORRUPTION, NOT POVERTY, HISTORY

Among the recommendations made at the G8 shadow meeting in Moscow in preparation for the St Petersburg summit is that international organizations such as the World Bank and the World Trade Organization be overhauled. The concern is that these outfits now entrench poverty and inequality.
One year after the G8 Gleneagles summit, there is little wonder why no progress has been made by the ‘group of rich’ in reducing poverty in Africa. The answer is corruption. Kenya’s problems are a classic example of those that plague the rest of the continent. Corruption in Kenya is widespread because conditions are ripe for it. The motivation to earn income is extremely strong, exacerbated by poverty. Furthermore, risks such as illness, accidents, and unemployment are high as people generally lack the many risk-spreading mechanisms including insurance and a well-developed labor market that are available in wealthier countries.
Corruption has prevented Kenya’s economic development and has rotted her democracy; it has been the gangrene making the country’s other problems untreatable. It is the single biggest reason for Kenya’s economic meltdown. In a poll commissioned by the agency Rope Starch International in nineteen developing countries, corruption was the fourth on the list of top fifteen national concerns of citizens, after crime, inflation, and recession.
Kenya is a true yet sad example of what can happen to a country when corruption becomes pervasive and of how once corruption becomes a way of life -- transition out of it is extremely difficult. Corruption becomes institutionalized; it becomes a way of life. Kenya's corruption problem is rooted in the African tradition of presenting gifts as a token of appreciation. After the country became independent from Britain in 1963, a benign custom turned institutional as unscrupulous individuals began demanding "gifts" in exchange for services. Proud of their new-found freedom, Kenyans initially turned a blind eye toward the mounting corruption. It didn't matter how you acquired your wealth, if you were a rich man you were a hero. And now we are trying to change the mentality of some 32 million Kenyans that if you acquire wealth the wrong way you are a thief.
Corruption in Kenya is both a symptom and a cause of institutional deficiencies, thriving because of poorly designed economic policies, lack of competition, and weak accountability of public authorities. Corruption inevitably results as people try to circumvent the extensive controls and regulations, and take advantage of the loopholes. The ruling class, comprising the exploitative capitalists and the corrupt public servants emerge as the winners.
Addressing corruption effectively means tackling these underlying causes. The World Bank country director Colin Bruce said that despite laws like the civil service code of conduct and the declaration of assets by public servants, Kenya is close to loosing the war on graft. If any real progress it to be made, emphasis must be put on prevention through reforming economic policies and institutions such that opportunities to engage in corruption and incentives to be corrupt will weaken. Efforts to improve enforcement of anticorruption legislation using the police, ethics offices, or special watchdog agencies within government will not bear fruit otherwise. It is then no wonder that Kenya with its numerous anti-corruption commissions and taskforces have had little success.
If the West is truly dedicated in helping Africa then it should spend all its resources in making corruption, not poverty, history. The rich countries could begin by helping African governments to retrieve the money politicians have stashed in Western banks. If this is done, the continent will request fewer loans from the West. Everyone will be happy -- the West will have more peace of mind, and Africans will have enough to live on without putting their bottomless begging bowls
Offshore banking and tax havens are world champions in building empires for crooks and then protecting them behind smoke screens. This facilitates the corrupt elites and oligarchs to own businesses with very complicated structures. The practices of some foreign banks are also debatable. However unethical practices by foreign banks and defects in the international economic system and other external factors alone are insufficient to explain Africa's economic crisis. Nor could foreign companies exploit African economies without the connivance or active encouragement of corrupt government officials.

Shreya Hasmukhlal Shah,
Kenyan graduate student at the International Business School,
Brandeis University