Corruption (part 2)

You may have gathered that corruption is becoming a special subject of ours out here, as it is always a hot topic here in Indonesia (see blogs passim).

While fighting corruption here, by trying to persuade Indonesians that the road to sustainable development passes over the bridges of civil society, we often find ourselves being seen as unimpeachable British crusaders for honesty in all transactions. This is a fairly uncomfortable position, and we try to emphasise that the reason why Britain is relatively less corrupt than Indonesia is not through the essential honesty of its citizens, but because of the numerous systems that are in place to make corruption difficult.

I tell our local colleagues that in the absence of certain elements of civil society (a free and inquisitive media, strong government institutions, trustworthy judges, auditors and tax collectors) British people are probably fairly corruptible. For instance, how many respectable middle-class people have paid the builder in cash to avoid VAT?

However, I held on to the idea that the British have enough belief in some form of social contract to prevent them ever becoming overtly corrupt, regardless of how frictionless it may appear to be. To be exposed as a corrupt businessman, or policeman, or council officer is still to suffer social stigma, whereas in Indonesia such people are treated with a certain misplaced respect.

It is therefore interesting to read about how the British Government caved into pressure from a cabal of arms dealers to soften anti-corruption regulations applying to exports covered by the Export Credits Guarantee Department. (The ECGD is a means whereby you, the taxpayer, subsidise the export costs of certain items to other parts of the world. In particular, the British Government deems it necessary to provide credit guarantees for arms exports to Saudi Arabia, that beacon of democracy and human rights in the Middle East).

You can read the full story here: http://www.thecornerhouse.org.uk/item.shtml?x=107362

Jean Eaglesham wrote in the Financial Times on 14 January 2005:

"Lobbying ministers for the right to turn a blind eye to corrupt activities that boost overseas profits is not an activity any business would wish to advertise. So it is not surprising industry moved swiftly to try to distance itself from yesterday's court battle over the dilution of curbs on overseas bribery.

The government has agreed to a full public consultation on the anti-bribery rules to avert a court challenge to its one-sided consultation with business.

The CBI employers' body protested that the legal challenge was simply a "dispute about the process of government" between Patricia Hewitt, the trade and industry secretary, and anti-corruption campaigners.

Business had been "inadvertently caught up" in the wrangle, the CBI said. But this protestation that industry was an innocent bystander to the government's actions sits uneasily with documents connected to the case. These show how BAE Systems, Airbus and Rolls-Royce spearheaded an intensive - and highly successful - industry lobbying campaign, persuading Ms Hewitt to override her civil servants."

(You should note that I am quoting the Financial Times here, not The Guardian!)

When those pillars of civil society such as the Government and the CBI collude to water down anti-corruption initiatives, it is tempting to conclude that Globalisation is the means whereby we preach modern Western-style honest dealing to developing countries, while participating in old-fashioned envelope-passing under the table. Such practices perpetuate bad regimes, prop up oligarchies and contribute towards deepening poverty.