Corruption kills -- especially in sub-Saharan Africa
Guest post by Aaron Scheinberg
Mr. Scheinberg, a Truman National Security
fellow, is a graduate of the United States Military Academy at West
Point and served in the Army for five years. He was an infantry and tank
platoon leader in Iraq from 2005-07 and was awarded the Bronze Star for
combat service in the “Triangle of Death” before becoming a Civil
Affairs Officer in the Babel Province of Iraq. Upon leaving the
military, he enrolled in a dual degree program at the Harvard Kennedy
School of Government (MPA/ID) and Columbia Business School (MBA). He
spent this past year working in international development and fighting
corruption in Tanzania. This is his first guest post at The Reaction.
In a region where over 70 percent of citizens still depend on
subsistence farming to survive, and where the number of people living on
less than a dollar a day has increased fifty percent over the last 15
years, any barrier to growth in farming and agro-business can literally
kill millions. And who is to blame for strengthening this hideous
poverty trap? Certainly, some blame lies with the African governments
and international donors, but one of the most corrosive agents operating
in Africa today is China. President Obama must take advantage of
Chinese President Hu Jintao's recent visit to the U.S. to press China on
its enabling of corruption in Africa.
This past summer, as part of my internship for the Harvard Kennedy School
International Development Program, I had the opportunity to work in East
Africa. I joined a social for-profit company called Anza Technologies
that sells low-cost, "poverty alleviating" products to rural subsistence
farmers. Our business model relies on the fact that we can make our
products out of recycled materials and sell them for a very low price.
Every cent matters when it comes to these farmers, yet we’re constantly
struggling with the high costs of distribution. The culprit – other than
poor roads and railway systems – is corruption.
In fact, bribery along the supply chains in Tanzania accounts for
10-33 percent of the total cost of transportation and distribution.
Along the major road from Dar-es-Salaam to Iringa, an average truck is
stopped between 10 to 15 times by police and traffic cops. Foreign
businesses must decide whether to "grease the wheels" and pay off these
police or take a long-term outlook and refuse to engage in bribery. But
of course, not only do these businesses pay the bribes, they account for
bribery as a "cost of doing business" in Africa.
While American companies may not be immune to such bribery, it’s the
BRIC countries, most notably China, that are most likely to engage.
Transparency International's Bribe Paying Index reveals that China is
one of the largest suppliers of bribery around the world (second only to
Russia), particularly in Africa. With all of the rhetoric surrounding
China’s desire to invest in Africa, leaders should beware of the cost
that comes with such investment.
Consumers in sub-Saharan Africa also need to beware of China's
so-called "investments." This summer I witnessed first-hand the huge
influx of fake and sub-standard consumer products from China into the
local village and city markets. Chinese businessmen trying to make a
quick yuan dumped millions of dangerous consumer and electronic goods
onto unknowing consumers and unregulated markets.
For some poor farmers, these products were just an inconvenience,
breaking down long before they should have. For others, the goods were a
real health hazard, made with harmful materials and wires that were
prone to starting fires. By pushing prices so low and subsequently
de-legitimizing entire industries, these businessmen squeezed honest
dealers out of the market. The situation has gotten so bad that last
week the Tanzanian government issued a 30-day ultimatum for Chinese
businessmen to leave the Kariakoo market entirely, one of the largest
markets around Dar-es-Salaam.
The culture of corruption and its acceptance by the Chinese starts at
the top. It's no wonder that Chinese businesses in Africa are so
comfortable with unethical actions when Hu Jintao's own son was involved
in a corruption scandal in Namibia in 2009. Therefore, targeting
China's leadership is essential to solving this crisis. President Obama
needs to use the Chinese president’s recent visit as an opportunity to
pressure China to act more responsibly around the world, particularly in
Africa.
Instead of furthering the suffering of the African people, foreign
businesses should team up together to form an ideological-economic union
that will fight bribery. If the thousands of businesses in Africa
jointly decide to refuse to pay bribes along the supply chains, pressure
will mount against the police and companies engaging in bribery.
And African citizens must demand products that come from "corruption-free" companies. Any "prisoner's dilemma"-type risk in this
union could be ameliorated through education in the long-term costs of
corruption. The end of bribery and corruption is good for business and
is good for the African people.
Labels: Africa, Barack Obama, China, corruption, Hu Jintao, Tanzania
1 Comments:
What is "ethical"?
We think we know, but our certainty is based upon the culture in which we were raised.
What is not "ethical" in the Occidental culture is not necessarily what is not "ethical" in the Chinese culture.
I am not trying to pass judgment on the Chinese culture, nor upon the culture of "the West", but we need to realize that in at least some cultures, bribery is not "unethical", it is merely a cost of doing business.
Is there an absolute right and wrong?
I think so, but in my imposing that absolute upon others, would I be unethical?
I am not in the least trying to say what is happening in Africa is right, but I wonder how we can think our ways of doing things is "right" when we have so many sins to account for (do your own review for that accounting).
By Jack, at 12:12 PM
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