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CLAMPING DOWN ON CORRUPTION

Putting the Big C on the Development Agenda
***8Grand corruption has spread like a cancer around the world in the past 30 years, says a new book. But the author believes "the C word" is at last being taken seriously. (World Bank Board to review its anticorruption policies in late May). Daniel Nelson writes from London***
SIZE may not matter in sex. according to the manuals, but it certainly does when it comes to corruption.
Whereas five per cent "commission" on a $ 100,000 project may be interesting to a senior official, it takes five per cent of a $ 5 million contract to get the attention of a head of state.
"The corollary." says George Moody-Stuart, author of a new book on corruption (Grand Corruption : World View Publishing. UK), "is that there is little prospect in many countries in the South of making a large equipment sale or undertaking a major project without grand corruption being involved."
Grand corruption is his name for the misuse of public power by heads of state, ministers ana top officials for private gain as opposed to the petty extortion of having to pay $ 100 to get a telephone connected in Indonesia.
Although "for the man in the street it is worse to have a corrupt policeman than a corrupt president", he says, "it’s impractical to fight every battle at the same Ume. It's best to start with the big stuff."
And tfhen it comes" to serious money, size is one of three crucial factors. He calls the others mystification and immediacy.
"The more complicated the subject matter of a contract, the better," he says in explanation of mystification. It is easy to check up on the price of cement, but purchases of fighter aircraft are covered by so many clauses and conditions that the true cost can easily be Hidden.
Sales of military hardware are a constant source of corruption precisely because of the size and complexity of . the deals.
Sometimes, military con-
tracts are given precedence over more beneficial projects — new hospitals, for instance — because the former offer better opportunities for personal payouts. This distortion of priorities. he argues, is more damaging than the straightforward
cost Increases that result from corruption.
The immediacy factor comes from the short-term thinking of most politicians and top civil servants: "They want the money now, or in three months." says Moody-Stuart, a retired businessman. who now campaigns on business corruption worldwide.
He believes the cancer of corruption has spread in the past 30 years, moving from the exception to the norm. And although his book focuses on developing countries, he says the initiatives come from the sellers and suppliers rather than from the buyers and receivers. As Malaysian Prime Minister Mahathir Mohamad has pointed out angrily in response : to criticisms of developing countries: 'We can't take bribes unless you offer them." Corrup-' tion will never be wiped out, says Moody-Stuart, but it can be kept down.
Top of his list of remedies is the use of criminal law. He cites the United States Foreign Corrupt Practices Act. which makes it an offence to try to bribe in another country and which, he believes, has had a significant impact among US firms. There are exceptions, however. Of one US company, a friend commented: "Those are the sort of people who give corruption a bad name."
Despite foot-dragging by Germany. Moody-Stuart expects all industrialised countries to criminalise corrupt practices by their firms operating abroad in the next few years. "It's pretty cynical to say you can't bribe the chairman of a local company, but you can do it abroad." he says.
Taxation and auditing procedures can help, as do democracy and a free press. He gives the example of the cancellation of a dubious $ 150 million radar contract in Tanzania after it received publicity (but praises Tanzania as a country currently making a serious effort to tackle the problem).
Another suggestion is for debt write-offs in return for "open books". He doubts thq; valu? of voluntary codes of conduct. and considers that the best hope for early and effective action in developing countries lies with the financing agencies.
Although he says many business executives believe that the African and Asian Development Banks are capable of being bribed to favour one project over another, the World Bank president. James Wolfen-sohn, is now confronting the issue.
Wolfensohn refers to a tidal wave of interest: "When I first came to the Bank, you didn't go in (to discussions) and talk about corruption. Now it is an
item in practically every discussion you have."
When asked at an April news conference about "the C word", he said, "it would be quite wrong for us to come in like the police". It was a matter for governments themselves. Nevertheless, the Bank was carrying out spot audits on its projects, and running training workshops with MPs. civil servants and non-government organisations in several countries including Ghana. Jordan. Malawi. Tanzania and Uganda.
It was encouraging countries
to make no-bribery pledges, which could be incorporated into projects and contracts, and would continue pressing for less regulation of economies, "because regulation breeds corruption. Every time you have got to get an approval, there is someone who may need some help to get an approval."
A paper on corruption is to be considered by the Bank’s board at the end of May. but Wolfensohn believes the Bank's new stance "is already tightening things up significantly". — Gemini News