Fixed capital has long been considered as an engine of growth both as a factor of production and as an embodiment of technological progress. Countries that had made sustained accumulation of fixed capital were able to achieve higher and sustained economic growth and development while those who had not lagged behind. For instance, economic development in Sub-Saharan Africa has been severely constrained by inadequate saving and investment, among other things. The average annual gross domestic saving rate by 41 sub Saharan African countries during the period 1980-2010 was as little as 14.3% of GDP while the average fixed investment was 20% of GDP for the same period. Therefore, sub-Saharan Africa’s burgeoning debt was not primarily meant to finance investment as the saving- investment gap was only about 6% of GDP during the past three decades.
Sub Saharan Africa’s dismal average economic growth of about 3.8% during the past three decades was therefore a direct consequence of low saving and low investment. The Sub Saharan Africa average saving and investment rates pale in comparison to the saving and investment rates of the newly industrialized and emerging Asian economies, such as China, whose saving and investment rates of over 40% of GDP ensured real economic growth rates of over 10% during the same period, i.e. 1980-2010.
Average annual growth in Africa reached above 5% during the past decade following the commodity price boom since the early 2000s but was dampened by the global economic and financial crises during 2008-2009. Growth rebounded in 2010 and is projected to reach 5.5% in 2011 making sub Saharan Africa the second fastest growing region in the world following Asia.
However, heavy dependence on growth driven by improved commodity terms of trade subjects the sub continent to vagaries of global demand uncertainty. Unless improved commodity terms of trade translates into higher saving and investment, the sustainability of the current improved growth performance will be at stake. Equally important is the continuation of economic and political reforms that are required to enhance the participation of the private sector in economic development, and also improve productivity and investment efficiency.
This brief paper presents an overview of investment efficiency, savings and economic growth in 41 sub Saharan African countries for the past three decades using data from the IMF, World Economic Outlook Data Base, April 2011. Six countries have been excluded from the analysis for lack of consistent time series data. These are Djibouti, Liberia, Mauritania, Sao Tome and Principe, Sudan and Zimbabwe.
Investment Efficiency in Sub Saharan Africa
There are two broad concepts of efficiency: allocative efficiency and technical or production efficiency usually measured by total factor productivity. Some empirical analysts use these broad concepts of efficiency to assess inefficiency in aggregate investment in terms of excess investment demand that captures the deviations of actual investment from the desired investment. These approaches usually use nonparametric methods, such as Data Envelopment Analysis (DEA), as well as, parametric methods including multiple linear or non- linear regression models.
In this brief article, we use a simple approach based on marginal productivity of capital, known commonly as the Incremental Capital Output Ratio (ICOR) to measure investment efficiency in 41 sub Saharan African countries for the period 1980-2010. ICOR is the ratio of investments in some previous period or periods and growth in output in subsequent period or periods measured at constant prices.
Growth in output is not attributed only to investment in fixed capital. It could be due to growth in productivity (partial or total factor productivity), increased use of labour input or improvement in the level of education of the labour force (growth in human capital), and/or improvements in productive capacity utilization. However, changes in fixed investment still explain a significant portion of growth in output particularly in developing countries with limited fixed capital stock and therefore the efficiency with which this input is utilized provides a useful clue about the correlation between the later and economic growth.
The higher the ICOR, the lower is the implied investment efficiency. That is fixed investment is more efficient if fewer dollars are required to generate a unit growth in output. The average ICOR for sub Saharan Africa for the period 1980-2010 was 5.23 and was comparable with the ICOR for of about 5 during the 1980-2003 period. This implies that fixed investment in sub Saharan Africa is pretty efficient and the level of investment efficiency in the sub region is comparable with that of China during the early two decades of its rapid industrialization. This is not only because the sub region is capital scarce but also because there have been marked improvements in business climate and political environment during the past two decades. Therefore, no wonder that foreign direct investment surged in Africa from less than US$15 billion in early 2000s to over US$80 billion in 2007 before the inflow was hit by the global financial and economic crises of 2008-2009.
While average investment efficiency in sub Saharan Africa is high, performance varies from country to country. The 41 countries in sub Saharan Africa can be classified into three groups based on their ICOR performance for the period 1980-2010: (a) those with ICOR value of 1-5, (b) those with 6-9, and (c)) those with ICOR values of above 10.
The majority of the 41 counties (i.e. 25 countries) in the sub region recorded higher investment efficiency during the past three decades. These countries include both the least developed countries with very low fixed capital stock base, as well as, some middle income economies with higher level of capital stock. These best performing countries with ICOR value of 1-5 are: Botswana, Cameroon, Central African Republic, Comoros, DRC, Republic of Congo, Equatorial Guinea, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinean Bissau, Kenya, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Rwanda, Seychelles, Togo, Uganda, and Zambia. Most of these countries are not only face extreme capital scarcity but have also shown some progress in opening up their economies during the past 3 decades.
The countries with medium investment efficiency level of ICOR 6-9 include: Benin, Burundi, Cape Verde, Eritrea, Mauritius, Sierra Leone, and Swaziland. Mauritius is among the Upper Middle income countries and top reformers in the sub region. Lower investment efficiency may imply an over investment in the economy where marginal investment needed to generate a unit output was greater during the past three decades than during the earlier years of its economic expansion.
Investment efficiency was the lowest in the following countries during the past three decades: Angola, Chad, Cote d’Ivoire, South Africa and Tanzania. All of these four countries have experienced some form of economic and political upheavals during the past three decades. Preliminary data analyses showed that South Africa’s ICOR was comparable with that of China for the post-Apartheid period, but the number was very high for the pre 1994 period, i.e. 1980-1994 pulling the country’s overall performance significantly down. Investment efficiency was very low during the Apartheid rule in South Africa, due to global isolation and heavy state control over the economy. Thus if we exclude the pre 1994 period South Africa’s investment efficiency will fall within the first group of best performers. Poor performance by Angola, Cote d’Ivoire and Tanzania reflects the continued impacts of civil war and socialist mode of production in the case of the later which contributed to wasteful investment.
Investment required to achieve a minimum growth threshold of 7 percent
While Africa’s growth performance is the second best in the world at present, the continent still lags behind other regions in terms of socioeconomic development. Over 380 million people in Africa today live below poverty line, while youth unemployment is as high as 70% in some countries. Most economies are still heavily dependent on rain fed subsistence agriculture with extremely limited investment on irrigation. Weak economic structure reinforces poverty and poses a major risk to the sustainability of the current growth fuelled by commodity price boom.
African countries will not be able to address this fundamental economic challenge with current growth rates of 5% or less. They should achieve a minimum of 7% annual growth rate individually or collectively for the coming two decades to make a dent on poverty and unemployment. With an average ICOR of 5.23, the sub Saharan Africa region therefore requires a minimum fixed investment of 35% of GDP over the coming two decades collectively or by each country. Given the current actual average regional fixed investment rate of 20% of GDP, the desired investment rate of 35% over the coming two decades seems insurmountable, but not unrealistic. China’s economic growth during the past three decades was fuelled by fixed investment of over 40% of GDP. China’s massive investment was financed by extraordinarily high household and public savings which at times reached 50% of GDP. The major challenge for Africa, in this respect, is a culture of low savings, which we expound in the following section.
Saving-investment gap in Sub Saharan Africa
When domestic household and public savings fall short of the fixed investment needs of a country, this leads to a saving-investment gap. This gap is exacerbated when export earnings of a country fall short of import demand leading to a second, foreign exchange gap. Most developing countries in Sub Saharan Africa are often characterized by both gaps. Except five countries, i.e. Botswana, DRC, Gabon, The Gambia, Namibia, and South Africa, the rest of 41 sub Saharan African countries had an average saving -investment gap ranging from 1% to nearly 30% of GDP during the past three decades.
The saving-investment gap, however, significantly varies across the countries in the sub region. Countries that faced relatively lower saving-investment gaps ranging between 1-5% in the sub region during the period under review include Angola, Cameroon, Central African Republic, Comoros, Republic of Congo, Cote d’Ivoire, Eritrea, Ghana, Kenya, Mali, Nigeria, Swaziland and Uganda. The lower gap by some countries reflects increased savings from oil revenues, while lower gap by others simply mean lower level of investment.
Countries in the sub region with the average saving investment-gap of 6-10% during the stated period include Benin, Burkina Faso, Burundi, Central African republic, Ethiopia, Guinea, Guinea Bissau, Madagascar, Malawi, Mauritius. Niger, Rwanda, Senegal, Sierra Leone, Tanzania and Zambia, while those with average saving-investment gap of above 11% include Cape Verde, Chad, Equatorial Guinea, Lesotho, Mozambique, Seychelles and Togo.
The poor performance of the sub region in terms of the saving-investment gap reflects two major challenges: First, most countries are characterized by low saving and low investment and hence are at the risk of being trapped in vicious circle of poverty if the they do not raise their saving and investment rates immediately; and second if they raise their investment levels without a concomitant increase in domestic savings they may be trapped in vicious cycle of debt which could undermine the value of their investments, provided money borrowed is invested in economic development. Since the recent economic crisis proved that most of the aid pledged by non-African donors is unlikely to be delivered, the only sustainable solution to Africa’s development challenge is aggressive domestic resource mobilization for development. This could be supplemented by foreign direct investments, if the countries in the sub region speed up the current economic and political reforms.
Concluding remarks
Africa is rising. After 5 decades of civil strife and economic stagnation, the first decade of the 21st century shone a new light on the continent. Africa is no more a hopeless dark continent. Like its diamonds in the West, South and at the center, the continent is shining.
It is also shining as a second fastest growing continent in the world. However, there is no time for complacence as Africa is still the least developed continent in the world plagued with high level of poverty, unemployment, political instability and corruption. To sustainably address these fundamental socio economic challenges the region should at least grow by 7% per annum for the coming two decades. However, this is unlikely to be achieved with the current investment rate of 20% and the saving rate of 14% of GDP.
While the return to investment in Africa is high, it is such low levels of investment and saving that are holding the continent back. Given higher returns to investment, Africa’s economic transformation will depend on radical shift in the saving culture of its people, further economic and political reforms, and accelerated fixed investment.
As long as Africa’s fates continue to be decided by capricious whims of individual despots, its people will continue to languish under poverty for decades to come. Transparency, accountability and good governance are unlikely to be achieved without well functioning and independent institutions that are able to hold any individual including the leaders accountable for their actions.
Dr. Wolassa Kumo Introduction
Africa is endowed with rich and diverse natural resources ranging from oil and gas to various minerals including diamond, gold, uranium, copper, zinc, cobalt and so on. At the end of 2010, 17 of the 53 African countries produced and exported oil with Libya and Nigeria holding the world’s 8th and 10th biggest oil reserves respectively. Ghana became the latest African country to join the club of world oil producers in December 2010 when it pumped crude oil from an offshore field in the Gulf of Guinea for the first time. Other major oil producers include Angola, Equatorial Guinea, Egypt, Gabon, Chad, Sudan, Cameroon, the Central African Republic, and etcetera. Africa currently holds over 10% of the world’s oil reserves and supplies over 12% to the global market. Countries rich in mineral resources in Africa include South Africa, Democratic Republic of the Congo (DRC), Botswana, Namibia, Mozambique, Niger, Zambia, Mali, Sierra Leone, Mauritania, Liberia and etcetera. Oil, gas and minerals contribute up to 95% of the foreign exchange earnings in some of these resource rich African economies.
Nevertheless, the benefits from the abundant natural wealth have not adequately trickled down to the majority of the African population. As a result, about 40% of the continent’s 1 billion people still live below the poverty line, i.e. US$1.25 a day. For instance, in Nigeria, Africa’s second top oil producer, over 70% of the population lived below the poverty line according to the 2007 estimates. In Equatorial Guinea, another major oil producer in Africa, and the richest country in the continent in terms of per capita income, over 77% of the population lived below the poverty line according to the 2006 estimate. Almost all resource rich African economies are ravaged by high level of poverty and unemployment.
Globally, 3.5 billion people live in countries rich in oil, gas and minerals. However, many of them still suffer from poverty, corruption and conflict emanating from weak governance [1].
The correlation among the natural resource endowment, economic growth and poverty has been contentious for decades. Among the vast empirical and theoretical literature on the impact of natural resource endowments on economic development, two contrasting views dominate the debate. The first view emphasizes that the development performance in mineral and oil rich and dependent economies has remained worse compared to the economies less endowed with and less dependent on such resources and that natural resource endowment is a curse rather than a blessing. This view is dubbed by economists as The Natural Resources Curse Hypothesis. Another view considers natural resources as endowments that can potentially spur economic growth and development in these countries. This, however, hinges on four fundamental factors: (1) conducive policy, legal and regulatory framework for extraction and use of oil and mineral resources; (2) promoting linkages between the extractive industries and the other sectors of the economy; (3) full involvement of communities in the decision making processes pertaining to exploration, exploitation and use of incomes from extractive industries; and (4) institutional capability, good governance and management of the natural resource revenues. While all factors are fundamental to ensuring oil and mineral wealth makes a dent in poverty in resource rich economies, good governance, accountability and transparency remain the cornerstone. The following section scrutinizes the global efforts towards promoting transparency and accountability in extractive industries in developing economies.
In 2000 the World Bank commissioned a review on extractive industries (oil, gas and minerals), headed by Dr. Emil Salim (former Indonesian State Minster for population and Environment), which involved an independent stakeholder consultation process. The World Bank agreed with the recommendations of the review and endorsed its main message that extractive industries can contribute to sustainable development when there is strong governance and transparency; the benefits from industry reach the poor; and the rights of people affected by extractive industry investments are protected, among other things [2].
Following the results of the World Bank review of extractive industries, the Extractive Industries Transparency Initiative (EITI) was launched in Britain in June 2003. The United States endorsed the initiative in June 2004. The EITI is governed by board members drawn from implementing countries, supporting countries, civil society organizations and industry and investment companies.
The main objective of the EITI is to increase transparency in financial transactions between governments and companies within the extractive industries so that revenue from natural resources are directed to government spending on health, education and other development priorities [1]. This would be achieved through a voluntary disclosure of revenue flows and payments by the government of and companies operating in implementing resource rich countries. Implementation of EITI must be consistent with the following criteria [1]:
a) Regular publication of all material oil, gas and mining payments by companies to governments (“payments”) and all material revenues received by governments from oil, gas and mining companies (“revenues”) to a wide audience in a publicly accessible, comprehensive and comprehensible manner.
b) Where such audits do not already exist, payments and revenues are the subject of a credible, independent audit, applying international auditing standards.
c) Payments and revenues are reconciled by a credible, independent administrator, applying international auditing standards and with publication of the administrator’s opinion regarding that reconciliation including discrepancies, should any be identified.
d) This approach is extended to all companies including state-owned enterprises.
e) Civil society is actively engaged as a participant in the design, monitoring and evaluation of this process and contributes towards public debate.
f) A public, financially sustainable work plan for all the above is developed by the host government, with assistance from the international financial institutions where required, including measurable targets, a timetable for implementation, and an assessment of potential capacity constraints.
There are two categories of EITI implementing countries: Candidate countries and compliant countries. To become a candidate country, a resource rich nation must sign up to implement EITI and meet the following four indicators: committing to implement the EITI; committing to work with civil society and private sector; appointing an individual to lead the implementation and producing a Work Plan that has been agreed with stakeholders. When countries fully implement the EITI they become compliant countries [1].
At present, globally, 35 countries have signed up to implement the EITI. Of these, 11 countries have fully complied with the EITI rules. These countries include: The Central African Republic, The Kyrgyz Republic, Niger, Nigeria, Norway, Yemen, Ghana, Liberia, Mongolia, Timor-Leste, and Azerbaijan.
Extractive Industry Transparency in Africa
Transparency in extractive industries has improved in Africa. Africa accounts for 5 of the 11 countries in the world that have fully complied with the rules of the EITI as of 2011. However, given the sheer size of natural resource endowments and the number of African countries holding these resources, the continent has a long way to go to achieve full transparency in the exploitation and use of these resources.
Outside of Nigeria, Niger, the Central African Republic, Ghana and Liberia which have fully complied with the EITI transparency requirements, 16 other African countries have signed up to implement the EITI initiative. These include: Burkina Faso, Cameroon, Chad, Cote d’Ivoire, DRC, Gabon, Guinea, Madagascar, Mali, Mauritania, Mozambique, Republic of the Congo, Sierra Leone, Tanzania, Togo, and Zambia.
Countries rich in mineral resources in Southern Africa such as South Africa, Botswana, and Namibia have not signed up for EITI. Nor have any of the oil and gas rich northern African countries such as Libya, Algeria and Egypt and the central African country of Equatorial Guinea. Although mineral and oil wealth have contributed to rapid economic progress in these economies during the past decades, high levels of poverty and unemployment still remain the biggest challenge. Ambitious and non-pragmatic new growth trajectories aimed at accelerated job creation being proposed in these economies may require more transparency and accountability in the exploitation and use of natural endowments than what the traditional practices entail.
This has become more evident since the onset of the Arab North Africa revolution that has toppled two regimes and is threatening to topple the third one. Post revolution and current evidences in these countries have demonstrated that in spite of some progresses in economic development, incomes from natural resources have been largely squandered by the political elites while 40-50% of the population languished below poverty line.
A 26 year old and unemployed young man, Mohammed Bouazizi, who sparked the revolution in Tunisia and the Arab world by setting himself on fire following the confiscation of unlicensed vegetable cart and its goods he used to sell for living in the streets by a policewoman, echoed the plight of not only Tunisian youth but millions of young college and high school graduates allover Africa and the Middle East. Mohammed Bouazizi has since become a legend in the Arab World and of course in the rest of freedom loving world. The Bouazizi Revolution is just only the beginning! Dictators who cling on to power and embezzle incomes from natural resources that belong to all citizens of a country will pay dearly sooner or later. The waves of democratic revolutions in the Arab world and its resounding successes within a relatively short period of time have exhilarated the quest for freedom, democracy, the rule of law and good governance in the rest of the Africa continent, the Middle East and the world at large.
Concluding Remarks
The sad reality about Africa is that it is so rich and yet it is so poor. This remains the most perturbing paradox of our time. The continent holds the world’s largest reserves of diamond and gold, and large reserves of copper, platinum, manganese, oil and gas, and millions of acres of fertile agricultural land, and yet its people remain the poorest in the world. Africa, a “Treasure Island” in the words of a world renowned Kenyan academic, Professor Ali Mazrui, remains an island of abject poverty, hunger, malnutrition, HIV/AIDS pandemic, civil unrest, corruption, nepotism, cronyism, and despotism.
As long as Africa’s fates continue to be decided by capricious whims of individual despots, its people will continue to languish under poverty for decades to come. Transparency, accountability and good governance are unlikely to be achieved without well functioning and independent institutions that are able to hold any individual including the leaders accountable for their actions.
While many African countries are moving in the right direction in this regard, some are regressing backwards. Political, religious, ethnic and racial intolerances are on the rise in several countries in the continent. Economic recovery from a sudden global shock caused by unfettered western capitalism hinges on political and social stability in the continent while inclusive economic development requires greater transparency and good governance. Where the continent’s despots make such transformation impossible, it is incumbent on the people of Africa to rise in unison and emulate the great people of Egypt, Tunisia, and Libya.
If Mr Bashir of the Sudan and certain former African leaders are found guilty and punished, the intelligentsia may begin to demand from Mr Ocampo a good explanation why America’s Gang of Five is at large. Our civil society movements may want to know why George Bush, Dick Cheney, Donald Rumsfeld, Colin Powell and Condoleeza Rice have not yet been mooted even for arrest for having ordered the murder of millions and millions of Iraqi and Afghani children and their parents.
By: Philip Ochieng By the “man-bite-dog” criterion of news taught in our schools of journalism, what happened at the African Union summit the other day should have been but a snippet tucked far away in the rear pages of our newspapers. For there was absolutely nothing new in it.
It was nothing but a run-of-the-mill “dog-bite-man” story. It is what African and other Third World leaders routinely do.
They commit tyranny and robbery and murder all the time and then, when accosted either at home or in international councils — try to depict one another as archangels.
If it had been known in advance that the human rights issue would come before Their Excellencies, even a child would have predicted that they would vote to a man ? not to mention the woman from Monrovia — to defend to the hilt the Man-on-Horseback in Khartoum.
No, it was not because they all love the Sudanese strongman.
It was only because none of the other heads of state and government may be innocent of the actions for which Omar al Bashir is wanted by Mr Ocampo in the historic Dutch city of international “justice.”
If Mr Bashir is arrested and taken to The Hague — if the International Criminal Court (ICC) finds him guilty of gross violations of human rights in Darfur — he will have opened a hideous can of worms for all the present and many former African and other Third World rulers.
Indeed, that precedent may prove extremely dangerous even for First World leaders.
The ICC itself has been accused of selective thirst for the blood of former and present tyrants.
It seems to go after Third World despots with much more gusto than it does after developed world leaders.
The Third World’s intelligentsia — including Africa’s — may be waking up slowly.
If Mr Bashir and certain former African leaders are found guilty and punished, the intelligentsia may begin to demand from Mr Ocampo a good explanation why America’s Gang of Five is at large.
Our civil society movements may want to know why George Bush, Dick Cheney, Donald Rumsfeld, Colin and Condoleeza Rice have not yet been mooted even for arrest for having ordered the murder of millions and millions of Iraqi and Afghan children and their parents.
The Spanish Daniel in The Hague may have to explain to humanity why Tony Blair, Gordon Brown and Jack Straw are still gallivanting all over the world as champions of freedom, democracy and human rights when they were central to the holocaust in the Middle East.
London, Washington, Paris, Rome and a city near The Hague may have to answer human rights questions about Latin America, Algeria, Korea, Kenya (during Mau Mau), Vietnam, Laos, Cambodia, Indonesia, Southern Africa and East Timor and other Portuguese colonies.
And the respondents may include John Kennedy, Richard Nixon, Harold Wilson, Ronald Reagan, George Bush Senior, John Major, Margaret Thatcher, Helmut Kohl, Jacques Chirac, Nicolas Sarkozy and Silvio Berlusconi.
Yet, notwithstanding all this, there is just no Ararat from which African heads of state can defend anyone among them.
All of them are guilty of one crime or another — including mal-government, looting, corruption, complete neglect of mass suffering, nepotism and tribalism.
How many have not trampled underfoot all the tenets and institutions of good governance? How many have not rigged elections?
How many have not tried to tamper with the constitution to make themselves presidents-for-life? How many have not colluded to assassinate their rivals?
How many have not tried to impose their sons as heirs? And — most germane to our topic — how many have not organised armed clashes and ethnic cleansing?
Darfur, then, is merely the most spectacular, most tragic, example of this heartless playing around with human life.
Otherwise, which one of Africa’s leaders has the moral or political or juridical authority to declare that Mr Bashir does not deserve to face justice in the Hague? Which? Bongo? Bouteflika? Guebuza? Mubarak? Mugabe? Museveni? Sirleaf-Johnson? Wade? Zenawi?
But, of course, our own sense of justice — the tenet that you are innocent until proved guilty — constrains us to give Mr Bashir the benefit of the doubt. It is within the realm of possibility that the Tartar is not guilty.
But the fact remains that, under his regime, millions of human beings have been slaughtered in Darfur and that the culprit-victim line appears to coincide with the race line. The culprit appears to belong to the same race as those in charge in Khartoum.
That is why it has been claimed — rightly or wrong — that the blood-thirsty Janjaweed militia has vital links with official Khartoum.
It is why the leaders of a country like Kenya, Uganda or Tanzania should have an active subjective interest in that matter — if, for one thing only, because blood is thicker than water.
But, much more important than that, it is imperative for the world to be quite clear in its mind who the culprit is.
Yes, Mr Bashir is innocent till proved guilty. But, because he is among the prime suspects, some internationally sanctioned judicial authority must be the one to give him the certificate of innocence.
That is why it is upon the ICC that it devolves to investigate Mr Bashir.
Nobody has the right or the knowledge to declare him guilty or innocent except an authority like the ICC, after it has gone thorough Mr Bashir’s secret cabinets with a toothcomb.
As for the other African leaders, as nearly as we can see, all of them defend Mr Bashir against Mr Ocampo merely so as to pre-empt the probability of judicial “radioactivity” catching up with them — the usual dog-bite-man story.
About The Author: Philip Ochieng — is a Kenyan Editor with the Nation Media Group. Like Obama Senior, he too went to the US on the famous Tom Mboya Airlift of 1959 [ when hundreds of Kenyan students were given scholarships to American universities ].
Sam Vaknin, Ph.D. Corruption runs against the grain of meritocratic capitalism. It skews the level playing-field; it guarantees extra returns where none should have been had; it encourages the mis-allocation of economic resources; and it subverts the proper functioning of institutions. It is, in other words, without a single redeeming feature, a scourge. Strangely, this is not how it is perceived by its perpetrators: both the givers and the recipients. They believe that corruption helps facilitate the flow and exchange of goods and services in hopelessly clogged and dysfunctional systems and markets (corruption and the informal economy "get things done" and "keep people employed"); that it serves as an organizing principle where chaos reins and institutions are in their early formative stages; that it supplements income and thus helps the state employ qualified and skilled personnel; and that it preserves peace and harmony by financing networks of cronyism, nepotism, and patronage.
I. The Facts
In 2002, just days before a much-awaited donor conference, the influential International Crisis Group (ICG) recommended to place all funds pledged to Macedonia under the oversight of a "corruption advisor" appointed by the European Commission. The donors ignored this and other recommendations. To appease the critics, the affable Attorney General of Macedonia charged a former Minister of Defense with abuse of duty for allegedly having channeled millions of DM to his relatives during the recent civil war. Macedonia has belatedly passed an anti-money laundering law recently, but failed, yet again, to adopt strict anti-corruption legislation.
In Albania, the Chairman of the Albanian Socialist Party, Fatos Nano, was accused by Albanian media of laundering $1 billion through the Albanian government. Pavel Borodin, the former chief of Kremlin Property, decided not appeal his money laundering conviction in a Swiss court. The Slovak daily "Sme" described in scathing detail the newly acquired wealth and lavish lifestyles of formerly impoverished HZDS politicians. Some of them now reside in refurbished castles. Others have swimming pools replete with wine bars.
Pavlo Lazarenko, a former Ukrainian prime minister, is detained in San Francisco on money laundering charges. His defense team accuses the US authorities of "selective prosecution".
They are quoted by Radio Free Europe as saying:
"The impetus for this prosecution comes from allegations made by the Kuchma regime, which itself is corrupt and dedicated to using undemocratic and repressive methods to stifle political opposition … (other Ukrainian officials) including Kuchma himself and his closest associates, have committed conduct similar to that with which Lazarenko is charged but have not been prosecuted by the U.S. government".
The UNDP estimated, in 1997, that, even in rich, industrialized, countries, 15% of all firms had to pay bribes. The figure rises to 40% in Asia and 60% in Russia.
Corruption is rife and all pervasive, though many allegations are nothing but political mud-slinging. Luckily, in countries like Macedonia, it is confined to its rapacious elites: its politicians, managers, university professors, medical doctors, judges, journalists, and top bureaucrats. The police and customs are hopelessly compromised. Yet, one rarely comes across graft and venality in daily life. There are no false detentions (as in Russia), spurious traffic tickets (as in Latin America), or widespread stealthy payments for public goods and services (as in Africa).
It is widely accepted that corruption retards growth by deterring foreign investment and encouraging brain drain. It leads to the misallocation of economic resources and distorts competition. It depletes the affected country’s endowments – both natural and acquired. It demolishes the tenuous trust between citizen and state. It casts civil and government institutions in doubt, tarnishes the entire political class, and, thus, endangers the democratic system and the rule of law, property rights included.
This is why both governments and business show a growing commitment to tackling it. According to Transparency International’s "Global Corruption Report 2001", corruption has been successfully contained in private banking and the diamond trade, for instance.
Hence also the involvement of the World Bank and the IMF in fighting corruption. Both institutions are increasingly concerned with poverty reduction through economic growth and development. The World Bank estimates that corruption reduces the growth rate of an affected country by 0.5 to 1 percent annually. Graft amounts to an increase in the marginal tax rate and has pernicious effects on inward investment as well.
The World Bank has appointed in 2001 a Director of Institutional Integrity – a new department that combines the Anti-Corruption and Fraud Investigations Unit and the Office of Business Ethics and Integrity. The Bank helps countries to fight corruption by providing them with technical assistance, educational programs, and lending.
Anti-corruption projects are an integral part of every Country Assistance Strategy (CAS). The Bank also supports international efforts to reduce corruption by sponsoring conferences and the exchange of information. It collaborates closely with Transparency International, for instance.
At the request of member-governments (such as Bosnia-Herzegovina and Romania) it has prepared detailed country corruption surveys covering both the public and the private sectors. Together with the EBRD, it publishes a corruption survey of 3000 firms in 22 transition countries (BEEPS – Business Environment and Enterprise Performance Survey). It has even set up a multilingual hotline for whistleblowers.
The IMF made corruption an integral part of its country evaluation process. It suspended arrangements with endemically corrupt recipients of IMF financing. Since 1997, it has introduced policies regarding misreporting, abuse of IMF funds, monitoring the use of debt relief for poverty reduction, data dissemination, legal and judicial reform, fiscal and monetary transparency, and even internal governance (e.g., financial disclosure by staff members).
Yet, no one seems to agree on a universal definition of corruption. What amounts to venality in one culture (Sweden) is considered no more than hospitality, or an expression of gratitude, in another (France, or Italy). Corruption is discussed freely and forgivingly in one place – but concealed shamefully in another. Corruption, like other crimes, is probably seriously under-reported and under-penalized.
Moreover, bribing officials is often the unstated policy of multinationals, foreign investors, and expatriates. Many of them believe that it is inevitable if one is to expedite matters or secure a beneficial outcome. Rich world governments turn a blind eye, even where laws against such practices are extant and strict.
In his address to the Inter-American Development Bank on March 14, 2002 President Bush promised to "reward nations that root out corruption" within the framework of the Millennium Challenge Account initiative. The USA has pioneered global anti-corruption campaigns and is a signatory to the 1996 IAS Inter-American Convention against Corruption, the Council of Europe’s Criminal Law Convention on Corruption, and the OECD’s 1997 anti-bribery convention. The USA has had a comprehensive "Foreign Corrupt Practices Act" since 1977.
The Act applies to all American firms, to all firms – including foreign ones – traded in an American stock exchange, and to bribery on American territory by foreign and American firms alike. It outlaws the payment of bribes to foreign officials, political parties, party officials, and political candidates in foreign countries. A similar law has now been adopted by Britain.
Yet, "The Economist" reports that the American SEC has brought only three cases against listed companies until 1997. The US Department of Justice brought another 30 cases. Britain has persecuted successfully only one of its officials for overseas bribery since 1889. In the Netherlands bribery is tax deductible. Transparency International now publishes a name and shame Bribery Payers Index to complement its 91-country strong Corruption Perceptions Index.
Many rich world corporations and wealthy individuals make use of off-shore havens or "special purpose entities" to launder money, make illicit payments, avoid or evade taxes, and conceal assets or liabilities. According to Swiss authorities, more than $40 billion are held by Russians in its banking system alone. The figure may be 5 to 10 times higher in the tax havens of the United Kingdom.
In a survey it conducted in February 2002 of 82 companies in which it invests, "Friends, Ivory, and Sime" found that only a quarter had clear anti-corruption management and accountability systems in place.
Tellingly only 35 countries signed the 1997 OECD "Convention on Combating Bribery of Foreign Public Officials in International Business Transactions" – including four non-OECD members: Chile, Argentina, Bulgaria, and Brazil. The convention has been in force since February 1999 and is only one of many OECD anti-corruption drives, among which are SIGMA (Support for Improvement in Governance and Management in Central and Eastern European countries), ACN (Anti-Corruption Network for Transition Economies in Europe), and FATF (the Financial Action Task Force on Money Laundering).
Moreover, The moral authority of those who preach against corruption in poor countries – the officials of the IMF, the World Bank, the EU, the OECD – is strained by their ostentatious lifestyle, conspicuous consumption, and "pragmatic" morality.
II. What to Do? What is Being Done?
A few years ago, I proposed a taxonomy of corruption, venality, and graft. I suggested this cumulative definition:
• The withholding of a service, information, or goods that, by law, and by right, should have been provided or divulged.
• The provision of a service, information, or goods that, by law, and by right, should not have been provided or divulged.
• That the withholding or the provision of said service, information, or goods are in the power of the withholder or the provider to withhold or to provide AND That the withholding or the provision of said service, information, or goods constitute an integral and substantial part of the authority or the function of the withholder or the provider.
• That the service, information, or goods that are provided or divulged are provided or divulged against a benefit or the promise of a benefit from the recipient and as a result of the receipt of this specific benefit or the promise to receive such benefit.
• That the service, information, or goods that are withheld are withheld because no benefit was provided or promised by the recipient.
There is also what the World Bank calls "State Capture" defined thus:
"The actions of individuals, groups, or firms, both in the public and private sectors, to influence the formation of laws, regulations, decrees, and other government policies to their own advantage as a result of the illicit and non-transparent provision of private benefits to public officials."
We can classify corrupt and venal behaviors according to their outcomes:
• Income Supplement - Corrupt actions whose sole outcome is the supplementing of the income of the provider without affecting the "real world" in any manner.
• Acceleration or Facilitation Fees - Corrupt practices whose sole outcome is to accelerate or facilitate decision making, the provision of goods and services or the divulging of information.
• Decision Altering (State Capture) Fees – Bribes and promises of bribes which alter decisions or affect them, or which affect the formation of policies, laws, regulations, or decrees beneficial to the bribing entity or person.
• Information Altering Fees - Backhanders and bribes that subvert the flow of true and complete information within a society or an economic unit (for instance, by selling professional diplomas, certificates, or permits).
• Reallocation Fees – Benefits paid (mainly to politicians and political decision makers) in order to affect the allocation of economic resources and material wealth or the rights thereto. Concessions, licenses, permits, assets privatized, tenders awarded are all subject to reallocation fees.
To eradicate corruption, one must tackle both giver and taker.
History shows that all effective programs shared these common elements:
• The persecution of corrupt, high-profile, public figures, multinationals, and institutions (domestic and foreign). This demonstrates that no one is above the law and that crime does not pay.
• The conditioning of international aid, credits, and investments on a monitored reduction in corruption levels. The structural roots of corruption should be tackled rather than merely its symptoms.
• The institution of incentives to avoid corruption, such as a higher pay, the fostering of civic pride, "good behavior" bonuses, alternative income and pension plans, and so on.
• In many new countries (in Asia, Africa, and Eastern Europe) the very concepts of "private" versus "public" property are fuzzy and impermissible behaviors are not clearly demarcated. Massive investments in education of the public and of state officials are required.
• Liberalization and deregulation of the economy. Abolition of red tape, licensing, protectionism, capital controls, monopolies, discretionary, non-public, procurement. Greater access to information and a public debate intended to foster a "stakeholder society".
• Strengthening of institutions: the police, the customs, the courts, the government, its agencies, the tax authorities – under time limited foreign management and supervision.
Awareness to corruption and graft is growing – though it mostly results in lip service. The Global Coalition for Africa adopted anti-corruption guidelines in 1999. The otherwise opaque Asia Pacific Economic Cooperation (APEC) forum is now championing transparency and good governance. The UN is promoting its pet convention against corruption.
The G-8 asked its Lyon Group of senior experts on transnational crime to recommend ways to fight corruption related to large money flows and money laundering. The USA and the Netherlands hosted global forums on corruption – as did South Korea in 2003. The OSCE has responded with its own initiative, in collaboration with the US Congressional Helsinki Commission.
The south-eastern Europe Stability Pact sports its own Stability Pact Anti-corruption Initiative (SPAI). It held its first conference in September 2001 in Croatia. More than 1200 delegates participated in the 10th International Anti-Corruption Conference in Prague last year. The conference was attended by the Czech prime minister, the Mexican president, and the head of the Interpol.
The most potent remedy against corruption is sunshine – free, accessible, and available information disseminated and probed by an active opposition, uncompromised press, and assertive civic organizations and NGO’s. In the absence of these, the fight against official avarice and criminality is doomed to failure. With them, it stands a chance.
Corruption can never be entirely eliminated – but it can be restrained and its effects confined. The cooperation of good people with trustworthy institutions is indispensable. Corruption can be defeated only from the inside, though with plenty of outside help. It is a process of self-redemption and self-transformation. It is the real transition.
III. Asset Confiscation and Asset Forfeiture
The abuse of asset confiscation and forfeiture statutes by governments, law enforcement agencies, and political appointees and cronies throughout the world is well-documented. In many developing countries and countries in transition, assets confiscated from real and alleged criminals and tax evaders are sold in fake auctions to party hacks, cronies, police officers, tax inspectors, and relatives of prominent politicians at bargain basement prices.
That the assets of suspects in grave crimes and corruption should be frozen or "disrupted" until they are convicted or exonerated by the courts – having exhausted their appeals – is understandable and in accordance with the Vienna Convention. But there is no justification for the seizure and sale of property otherwise.
In Switzerland, financial institutions are obliged to automatically freeze suspect transactions for a period of five days, subject to the review of an investigative judge. In France, the Financial Intelligence Unit can freeze funds involved in a reported suspicious transaction by administrative fiat. In both jurisdictions, the fast track freezing of assets has proven to be a more than adequate measure to cope with organized crime and venality.
The presumption of innocence must fully apply and due process upheld to prevent self-enrichment and corrupt dealings with confiscated property, including the unethical and unseemly use of the proceeds from the sale of forfeited assets to close gaping holes in strained state and municipal budgets.
In the United States, according to The Civil Asset Forfeiture Reform Act of 2000 (HR 1658), the assets of suspects under investigation and of criminals convicted of a variety of more than 400 minor and major offenses (from soliciting a prostitute to gambling and from narcotics charges to corruption and tax evasion) are often confiscated and forfeited ("in personam, or value-based confiscation").
Technically and theoretically, assets can be impounded or forfeited and disposed of even in hitherto minor Federal civil offenses (mistakes in fulfilling Medicare or tax return forms)
The UK’s Assets Recovery Agency (ARA) that is in charge of enforcing the Proceeds of Crime Act 2002, had this chilling statement to make on May 24, 2007:
“We are pursuing the assets of those involved in a wide range of crime including drug dealing, people trafficking, fraud, extortion, smuggling, control of prostitution, counterfeiting, benefit fraud, tax evasion and environmental crimes such as illegal dumping of waste and illegal fishing." (!)
Drug dealing and illegal fishing in the same sentence.
The British firm Bentley-Jennison, who provide Forensic Accounting Services, add:
"In some cases the defendants will even have their assets seized at the start of an investigation, before any charges have been considered. In many cases the authorities will assume that all of the assets held by the defendant are illegally obtained as he has a “criminal lifestyle”. It is then down to the defendant to prove otherwise. If the defendant is judged to have a criminal lifestyle then it will be assumed that physical assets, such as properties and motor vehicles, have been acquired through the use of criminal funds and it will be necessary to present evidence to contradict this.
The defendant?s bank accounts will also be scanned for evidence of spending and any expenditure on unidentified assets (and in some cases identified assets) is also likely to be included as alleged criminal benefit. This often leads to the inclusion of sums from legitimate sources and double counting both of which need to be eliminated."
Under the influence of the post-September 11 United States and the FATF (Financial Action Task Force on Money Laundering), Canada, Australia, the United Kingdom, Greece, South Korea, and Russia have similar asset recovery and money laundering laws in place.
International treaties (for instance, the 1959 European Convention on Mutual Legal Assistance in Criminal Matters, the 1990 Convention of the Council of Europe on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS 141), and The U.N. Convention against Corruption 2003- UNCAC) and European Union Directives (e.g., 2001/97/EC) allow the seizure and confiscation of the assets and "unexplained wealth" of criminals and suspects globally, even if their alleged or proven crime does not constitute an offense where they own property or have bank accounts.
This abrogation of the principle of dual criminality sometimes leads to serious violations of human and civil rights. Hitler could have used it to ask the United Kingdom’s Assets Recovery Agency (ARA) to confiscate the property of refugee Jews who committed "crimes" by infringing on the infamous Nuremberg race laws.
Only offshore tax havens, such as Andorra, Antigua, Aruba, the British Virgin Islands, Guernsey, Monaco, the Netherlands Antilles, Samoa, St. Vincent, the US Virgin Islands, and Vanuatu still resist the pressure to join in the efforts to trace and seize suspects’ assets and bank accounts in the absence of a conviction or even charges.
Even worse, unlike in other criminal proceedings, the burden of proof is on the defendant who has to demonstrate that the source of the funds used to purchase the confiscated or forfeited assets is legal. When the defendant fails to furnish such evidence conclusively and convincingly, or if he has left the United States or had died, the assets are sold at an auction and the proceeds usually revert to various law enforcement agencies, to the government’s budget, or to good social causes and programs. This is the case in many countries, including United Kingdom, United States, Germany, France, Hong Kong, Italy, Denmark, Belgium, Austria, Greece, Ireland, New Zealand, Singapore and Switzerland.
According to a brief written by Jack Smith, Mark Pieth, and Guillermo Jorge at the Basel Institute on Governance, International Centre for Asset Recovery:
Article 54(1)(c) of the UNCAC recommends that states parties establish non-criminal systems of confiscation, which have several advantages for recovery actions: the standard of evidence is lower (“preponderance of the evidence” rather than “beyond a reasonable doubt”); they are not subject to some of the more restrictive traditional safeguards of international cooperation such as the offense for which the defendant is accused has to be a crime in the receiving state (dual criminality); and it opens more formal avenues for negotiation and settlements. This is already the practice in some jurisdictions such as the US, Ireland, the UK, Italy, Colombia, Slovenia, and South Africa, as well as some Australian and Canadian States."
In most countries, including the United Kingdom, the United States, Austria, Germany, Indonesia, Macedonia, and Ireland, assets can be impounded, confiscated, frozen, forfeited, and even sold prior to and without any criminal conviction. In Australia, Austria, Ireland, Hong-Kong, New Zealand, Singapore, United Kingdom, South Africa, United States and the Netherlands alleged and suspected criminals, their family members, friends, employees, and partners can be stripped of their assets even for crimes they have committed in other countries and even if they have merely made use of revenues obtained from illicit activities (this is called "in rem, or property-based confiscation"). This often gives rise to cases of double jeopardy.
Typically, the defendant is notified of the impending forfeiture or confiscation of his or her assets and has recourse to a hearing within the relevant law enforcement agency and also to the courts. If he or she can prove "substantial harm" to life and business, the property may be released to be used, though ownership is rarely restored.
When the process of asset confiscation or asset forfeiture is initiated, banking secrecy is automatically lifted and the government indemnifies the banks for any damage they may suffer for disclosing confidential information about their clients’ accounts.
In many countries from South Korea to Greece, lawyer-client privilege is largely waived. The same requirements of monitoring of clients’ activities and reporting to the authorities apply to credit and financial institutions, venture capital firms, tax advisers, accountants, and notaries.
Elsewhere, there are some other worrying developments:
In Bulgaria, the assets of tax evaders have recently begun to be confiscated and turned over to the National Revenue Agency and the State Receivables Collection Agency. Property is confiscated even when the tax assessment is disputed in the courts. The Agency cannot, however, confiscate single-dwelling houses, bank accounts up to 250 leva of one member of the family, salary or pension up to 250 leva a month, social care, and alimony, support money or allowances.
Venezuela has recently reformed its Organic Tax Code to allow for:
"(P)re-judgment enforcement measures (to) include closure of premises for up to ten days and confiscation of merchandise. These measures will be applied in addition to the attachment or sequestration of personal property and the prohibition against alienation or encumbrance of realty. During closure of premises, the employer must continue to pay workers, thereby avoiding an appeal for constitutional protection."
Finally, in many states in the United States, "community responsibility" statutes require of owners of legal businesses to
"abate crime" by openly fighting it themselves. If they fail to tackle the criminals in their neighborhood, the police can seize and sell their property, including their apartments and cars. The proceeds from such sales accrue to the local municipality.
In New-York City, the police confiscated a restaurant because one of its regular patrons was an alleged drug dealer. In Alabama, police seized the home of a senior citizen because her yard was used, without her consent, for drug dealing. In Maryland, the police confiscated a family’s home and converted it into a retreat for its officers, having mailed one of the occupants a package of marijuana.
Note – The Psychology of Corruption
Most politicians bend the laws of the land and steal money or solicit bribes because they need the funds to support networks of patronage. Others do it in order to reward their nearest and dearest or to maintain a lavish lifestyle when their political lives are over.
But these mundane reasons fail to explain why some officeholders go on a rampage and binge on endless quantities of lucre. All rationales crumble in the face of a Mobutu Sese Seko or a Saddam Hussein or a Ferdinand Marcos who absconded with billions of US dollars from the coffers of Zaire, Iraq, and the Philippines, respectively.
These inconceivable dollops of hard cash and valuables often remain stashed and untouched, moldering in bank accounts and safes in Western banks. They serve no purpose, either political or economic. But they do fulfill a psychological need. These hoards are not the megalomaniacal equivalents of savings accounts. Rather they are of the nature of compulsive collections.
Erstwhile president of Sierra Leone, Momoh, amassed hundreds of video players and other consumer goods in vast rooms in his mansion. As electricity supply was intermittent at best, his was a curious choice. He used to sit among these relics of his cupidity, fondling and counting them insatiably.
While Momoh relished things with shiny buttons, people like Sese Seko, Hussein, and Marcos drooled over money. The ever-heightening mountains of greenbacks in their vaults soothed them, filled them with confidence, regulated their sense of self-worth, and served as a love substitute. The balances in their bulging bank accounts were of no practical import or intent. They merely catered to their psychopathology.
These politicos were not only crooks but also kleptomaniacs. They could no more stop thieving than Hitler could stop murdering. Venality was an integral part of their psychological makeup.
Kleptomania is about acting out. It is a compensatory act. Politics is a drab, uninspiring, unintelligent, and, often humiliating business. It is also risky and rather arbitrary. It involves enormous stress and unceasing conflict. Politicians with mental health disorders (for instance, narcissists or psychopaths) react by decompensation. They rob the state and coerce businessmen to grease their palms because it makes them feel better, it helps them to repress their mounting fears and frustrations, and to restore their psychodynamic equilibrium. These politicians and bureaucrats "let off steam" by looting.
Kleptomaniacs fail to resist or control the impulse to steal, even if they have no use for the booty. According to the Diagnostic and Statistical Manual IV-TR (2000), the bible of psychiatry, kleptomaniacs feel "pleasure, gratification, or relief when committing the theft." The good book proceeds to say that " … (T)he individual may hoard the stolen objects …".
As most kleptomaniac politicians are also psychopaths, they rarely feel remorse or fear the consequences of their misdeeds. But this only makes them more culpable and dangerous.
Here is a sad truism about our country: Shame is dead. Well, almost. This is not breaking news, I know; but have you noticed that whatever remains of shame is being buried along with humility, integrity and love of country?
Have you noticed the giant twin monuments of greed and impunity we have erected on the graveyards of wisdom and honour?
Greed, impunity, smallness of mind, and indifference to suffering: these are the tenets of what appears to be the fastest growing religion this side of the misery kingdom. It is a gospel practiced by the political apostolate and encouraged by a chorus of hosannas from the power elite and tribal congregations.
Shame and honour are endangered and may soon be extinct. How do we know this?
We know it when, while the Government declares a “disaster” and begs the world for food, grain reserves are looted for personal gain.
We know it when the findings of an expensive commission set up to investigate the irregular sale of a hotel are ignored and those most culpable rewarded with ministerial positions.
We know that integrity and executive competence are in terminal decline when political cronies in their mid 70s continue to head Government state enterprises when younger, qualified Kenyans are available.
You can tell the depth of shamelessness to which we have sunk when our business and academic elite go to the World Economic Forum to ‘intelligently‘ talk about the ‘State of Africa‘, and return home to promote narrow ethnic interests.
In a recent article, Nobel laureate Wangari Maathai argued the presidency is not to blame for out-of-control corruption and greed. She put the blame on a faulty constitution. Really? Does she really believe that a new constitution is a substitute for leadership integrity and competence? Those with executive power serially ignore the current laws.
Stand against Moi regime
I suspect the good woman was merely doing a complicated tap-dance around the truth. This would be unfortunate. We do not want to associate the illustrious professor with cowardice and political apologetics, would we? After all, it was her fearless stand against Moi’s regime that helped build her reputation as a courageous freedom fighter ? a reputation that was partly responsible for the Nobel Prize.
There was also the curious statement by Michael Ranneberger, the United States ambassador to Kenya, defending Government efforts in fighting corruption.
Later, in the company of other envoys, he appeared to reverse course. Will someone tell the ambassador to please kindly zip-up? Kenyans know the hanky-panky and highly suspect role he played in the 2007 presidential elections and its tragic outcome. Enough of your wisdom sir.
But we cannot be too hard on the ambassador. He is, after all, trying to secure the interests of his country ? however baffling his methods may appear to us. It is up to us to secure our own.
Can anything be done about greed, executive incompetence and impunity?
Some think the answer is in a national conference, ‘The Kenya We Want‘. I have no quarrel with conferences if they are structured to actually achieve tangible results. But I think we have our priorities wrong.
Kenya we want
For a start, if we must have a conference, let it be called “How to Get the Kenya We Want”.
We know what kind of Kenya we want; it is getting it that is the problem. For this reason, I think the conference should have been an internal affair focused on the question: “Can We Advance National Interests through Pursuit of Narrow Ethnic Interests?”
The participants should have been economic and academic elite in general and tribal think-tanks in particular. The sooner we have such a conference the better.
Do we really need foreigners to tell us why Molo Town has no fire engine? We need a frank and open discussion about ethnically-motivated and elite-enabled greed, impunity and executive incompetence. This is the real issue. Why dance around it?
I have a question for the elite (myself included): when we dine and wine in posh clubs and hotels at home and overseas, what do we really think about those horrid pictures of poverty-stricken Kenyans living like wild dogs?
And to the mass media: Thanks for your service to the country, but remember that a steady drumbeat of depressing news soon becomes harmless background noise. New, creative approaches are needed to continuously jolt the nation into shame and action.
Do not allow shame to die.
About The Author: Kap Kirwok — ( Stra...@gmail.com ) is based in the USA where he works for an international development agency
Introduction
By the “man-bite-dog” criterion of news taught in our schools of journalism, what happened at the African Union summit the other day should have been but a snippet tucked far away in the rear pages of our newspapers. For there was absolutely nothing new in it.
Corruption runs against the grain of 
