20 January 2013

Ethiopia: Mounting Corruption Risk Poses Momentous Challenge to Economy


Corruption is one of the areas where the Ethiopian political sphere deliberates and acts without certainty. The usual dogmatic debate, often supported with meticulous evidence, does not take place. Everything that is said and done is anecdotal.

The ruling EPRDF effectively exploits this uncertainty. It often goes on the defensive, saying that all criticisms about the prevalence of corruption are hypothetical and are not reflected on the ground. Strictly speaking, the popular rhetoric goes: there is only a high 'perception' about corruption.

Global research on the risk and impact of corruption supports this very rhetoric. Most of the undertaken research could not design and deploy effective methodologies to study the prevalence of corruption within the state structure. Thus, they settle for analysing the mere perceptions of citizens.

As rare as it may be, the study disclosed by the World Bank, last week, has brought a milestone change in the debate about corruption inEthiopia. It has elevated the debate to a higher state, for it categorises the whole economy into sectors, and calculates the risk of corruption in each.

Its uniqueness stems from its approach of tracing corruption across the value chain of development; from policy making to actual payment. Unlike other research, as if to show its regard for policy, it aligned the risk of corruption with actual developmental undertakings.

To the dismay of the ruling EPRDFites, the study has identified a high corruption risk in major economic sectors; from construction to mining. It also states that the risk of corruption in the telecommunications and pharmaceuticals sectors is increasing at an alarming rate. Overall, the survey has shown that corruption, if left on its own, could soon become a real-time developmental challenge forEthiopia.

Comparatively, what has been identified by the World Bank's study coincides with earlier studies on corruption perception. If there is one thing that it has done uniquely, it is to ring the alarm bell even louder. And therein lies the debate.

For the EPRDFites, the new study is just another alarm bell drawn from perception and institutional gaps. It is only a showcase of the probability of corruption in each of the sectors involved. Though better than the neo-liberal bias of institutions, such as Transparency International (TI), they argue, it is still short of concrete evidence about the prevalence of corruption as a pandemic.

Critics seem to agree with the failings of the report. It ought to go beyond analysing risks, to rightly tagging a price on the scourge. It should have tried to measure the developmental impact of the risk, in each of the sectors, the argument goes. If it had done so, they reflect, it would have brought the intensity of the pandemic to light.

Beyond the categorised debate, however, the alarm bell of the new study provides the policy sphere with a unique impulse, which, if utilised properly, could clean the burgeoning economy of corrupt practices. Yet, whether this could happen or not, depends largely on the political commitment of the ruling Revolutionary Democrats.

If the results of the latest study are anything to go by, the development endeavours of the country are at risk. Failing to take action will affect the very objectives that the EPRDFites advocate.

Improved access to basic services, from education to primary health care, remains the foremost evidence of economic development inEthiopia. In addition to this, are improvements in telecommunications penetration, infrastructure expansion and treatment of incurable diseases, such as HIV/Aids.

At the base of the looming corruption risk in these sectors is the ever increasing alignment of service provision and governmental investment. Much of the investment in the basic sectors is undertaken by the government.

Different tiers of the state apparatus are involved in the value chain of service provisions; from planning to effecting payment. Gaps in the chain risk both public investments and their intended developmental results.

Of course, a debate over institutionalisation would not hold water, for the EPRDFites have rightly institutionalised the fight against corruption. They have put in place a corruption watchdog with deployable legal instruments.

Where the gap exists is on the attitude towards corruption. By and large, the ruling EPRDFites focus purely on developmental results and provide just marginal attention to the developmental costs of corrupt activities.

It is through mainstreaming a change in behaviour that the fight might be as comprehensive as it should be. Institutionalisation could not deliver an end.

Creating a policy sphere impermissible to corruption would involve internalisation of the costs of the fight within the costs of the developmental undertakings. But, it cannot happen without accepting the level of risk involved.

Despite their legal independence, corruption watchdogs would be energised when supported with visible governmental commitments. This would happen because the policy sphere would be impermissible to corruption and unlawful activities. By extension, this would create a favourable environment for the watchdogs to identify and legally account for malpractices.

For a nation where over 85pc of the aggregate economic consumption originates from the government, the risk of corruption cannot be separated from public investment portfolios. Putting in place the right mechanisms to infuse transparency, within the public investment system, will be vital in the fight against corruption. But, it cannot help to reduce the risk without favourable attitudinal change within the implementing bureaucracy.

True, highlighting the development results of the past two decades, as the EPRDFites often do, might be important to consolidate enough positive momentum towards envisioned economic aspirations. However, it cannot be sustained if the process is not clean enough.

Sustainable economic development, complemented by effective service provisions and inclusive growth, could not be ensured without capable bureaucracy that delivers results. The effectiveness and efficiency of such a bureaucracy cannot be maintained in the long-run unless the operational system is made transparent.

For the EPRDFites, doing so would not cost a lot. What would be required is to internalise the threads of the fight against corruption within the policy making regime. Certainly, the past years of institutionalisation would have a lot to offer in these terms.

Thus, the stake for the anti-corruption czars and the government is to take the risk analysis, undertaken by the World Bank, one step further. It is indeed high time for the EPRDFites to clear the development path of all corrupt activities and fill the systemic gaps with tailored checks and balances.

No doubt that internalisation of the risks is the way forward, in order to complement the speedy economic growth with adequate developmental benefits.

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