Some people will dismiss them as the gaffes of an eccentric royal, but Prince Andrew’s remarks over that Kyrgyzstan brunch are more serious than that. Here is a senior representative of the British people treating corruption with a levity that its victims would find nauseating, rather than sending a clear message to British businesses operating in Kyrgyzstan.
There are few issues that are more important to poor countries, or poor people, than corruption, for economic and political reasons. Whether corruption harms a country economically depends largely on whether stolen money is spirited out of the country to be spent or invested elsewhere, or reinvested locally. Corruption was endemic in Britain in the 19th century, just as it is in China today – but because the money is invested domestically, it hardly hinders economic growth. But in many other countries, including Kyrgyzstan, vast quantities of money leave the country, thus undermining fragile hopes for economic progress while further enriching a small elite. Most money corruptly stolen in Africa (estimated in 2005 at almost $150bn, far more than it receives in aid) flows abroad, where it is easier to hide and/or invest, and only 10% to 20% ever returns to the continent.
For the poorest, though, it is the political side of corruption that is perhaps most devastating. Being poor means being powerless because money is power. The slow building of accountable systems (including laws that are fairly enforced, public servants who do their jobs without favour and private companies that are held in check by a responsible state) is one of the best ways, if not the only way, for poor communities to gradually claim control over their own lives, reducing the possibility of arbitrary actions that keep them poor or undermine years of progress.
The development sector has been too silent on corruption. Although partner organisations in poor countries regularly raise it as one of the most important issues they face, spokespeople in the global north are reticent to elaborate for fear of losing support for development from a sceptical public. This is not a credible way forward. The risk of losing the public’s trust because of word-mincing on corruption is greater than losing it because of the odd case splashed in the news.
The argument is fairly simple and non-explosive. Firstly, corruption is rife in most countries, including those that enjoy pointing it out elsewhere. The entire EU commission resigned in 1999 amid allegations of fraud and corruption. Corruption is not easily rooted out, and westerners should be careful before pointing to deficiencies elsewhere. Nevertheless, corruption is generally worse in poorer countries because accountability mechanisms (such as legal structures, auditors, a bold and free press) tend to be weaker.
Secondly, there is very little evidence linking corruption to aid. Some studies show that aid leads to more, others argue that it helps reduce corruption. When aid bolsters regimes known to be highly corrupt because they are “friendly” to the donor, the cause for accountability is set back. When aid is conditioned on rapid privatisation (as happened in Russia or Mozambique) corruption is likely to take hold. On the other hand, aid spent well can reduce corruption if civil servants get a slightly higher wage, or lawyers and judges are trained with aid money. There is a fair amount of consensus that donor money and pressure has led to central banks in Africa being better run now than previously. Aid money is certainly stolen just like other money is stolen – but that is no more an argument against aid than it is against levying taxes. It is an argument for clamping down on corruption.
Thirdly, foreign businesses might not be able to make things much better, but they can certainly make things worse. Prince Andrew suggested that outsiders could do little to tackle corruption saying: “They [Kyrgyzstan’s people] themselves have to have a change of heart.” This is not entirely wrong. Ultimately it is only action by domestic civil society that will make a difference. But that can either be supported by outsiders, or undermined. When foreign businesses engage in corrupt practices, they are not acting neutrally; they are actively cementing corruption, and undermining the hopes of those who want to see democracy and accountability in their lifetimes. Prince Andrew should be supporting the Publish What You Pay campaign, and others like it, rather than questioning the importance of journalism in rooting out corruption.
Were these unguarded comments a one-off and unrepresentative of a usually strict view of British representatives on corruption? Or were they typical of an attitude towards British business abroad that turns a blind eye to practices that cement corruption, because of a warped kind of patriotism that puts short-term commercial interests before poverty reduction? The truth is that both attitudes exist in multinational business, from recklessness to responsibility. Those Kyrgyzs fighting (often at risk to themselves) for more accountability and less corruption would undoubtedly appreciate trade ambassadors from any country coming down on the side of responsibility, even if that means losing out on a deal now and then.