How to help China’s anti-corruption reformers


Proposed new bilateral investment treaties would improve transparency and help tackle corruption in China, says Robert Zoellick, a former World Bank president, US trade representative and deputy secretary of state:

Chinese reformers believe that bilateral investment treaties will help them fight favouritism and corruption, remove onerous regulations that choke market competition, improve uneven law enforcement, and shrink the advantages enjoyed by state-owned enterprises. As one Chinese official told me, if the authorities offer equal and fair treatment to foreigners, China’s private sector can demand the same. Reformers recognise that small and medium-sized enterprises would be the biggest winners from fairly enforced economic rules.

“Bilateral treaties, technical though they might be, can be potent tools,” says Zoellick, a board member of the National Endowment for Democracy. “They can assist China’s market reforms, deepen constructive economic ties with the west, and strengthen the international rule of law. They also offer a positive agenda to buffer inevitable differences,” he writes for The Financial Times.

But reports suggest that the ruling Communist Party is resorting to more familiar and less technocratic approaches to curbing corruption, while cracking down on grassroots anti-graft campaigners, including Xu Zhiyong, the “quiet lawyer holding Beijing to account” and the broader New Citizens Movement (see above).

Brutality yields graft confessions

The anti-corruption crackdown has netted officials at most levels of government, many of whom have been investigated and questioned under an internal disciplinary process called shuanggui, China Digital Times reports. While stories have emerged about mistreatment and harsh conditions in shuanggui facilities, the AP’s Gillian Wong gives a detailed account of torture from four local officials held in Hunan:

Zhou, land bureau director for the city of Liling, was confined in the party’s secret detention system at a compound in central Hunan, touted as a model center for anti-corruption efforts. Nobody on the outside could help him, because nobody knew where he was.

In a rare act of public defiance, Zhou and three other party members in Hunan described to The Associated Press the months of abuse they endured less than two years ago, in separate cases, while in detention. Zhou said he was deprived of sleep and food, nearly drowned, whipped with wires and forced to eat excrement. The others reported being turned into human punching bags, strung up by the wrists from high windows, or dragged along the floor, face down, by their feet.

All said they talked to the AP despite the risk of retaliation because they were victims of political vendettas and wanted to expose what had happened. Party representatives contacted by the AP denied the abuses had taken place.

[…] Wang Qiuping, party secretary of an industrial park in Ningyuan, said he was slapped often and forced to stand and kneel for hours during a detention of 313 days. His deputy Xiao Yifei told the AP he was hooded for more than a month and beaten up by an interrogator who went by the nickname “Tang the Butcher.” Xiao provided the AP with a receipt from a local party discipline office showing his sister paid 35,000 yuan, or $5,700, in “violation fees” to secure his release after 208 days. And Fan Qiqing, a contractor, said he was kicked and lashed with a metal whip and wooden plank during his 431-day detention and forced to take hallucinogenic drugs.

A Ningyuan party official who refused to give his name said the investigation involving all three men was carried out in a “civilized manner” and no one was tortured.

In April, a suspect died during a shuanggui investigation. Read more about the anti-corruption drive and about shuanggui, via CDT.

Corruption fears over Indonesian polls



As Indonesia prepares to elect a new parliament and president in the coming months, Deutsche Welle examines how political graft is undermining the Southeast Asian country’s democratic and economic achievements of the past decade.

Many analysts regard Indonesia’s accomplishments after the overthrow of longstanding authoritarian ruler Suharto in 1998 as remarkable. The world’s largest Muslim democracy with more than 250 million people has not only managed to expand its economy at an average rate of 5.5 percent over the past decade.

It has also undertaken “one of the most ambitious institutional reform programs attempted anywhere,” by rapidly decentralizing power, creating a constitutional court and a powerful anti-corruption commission,” according to the US-based National Democratic Institute (NDI). …..

NDI Senior Program Officer David Caragliano argues in a recently published article on that with no clear presidential front-runner and a higher parliamentary threshold for parties to enter the national legislature, the elections could be the most closely contested in the nation’s history. Therefore, he argues, “the incentives for increased electoral manipulation, vote buying and fraud are clear, at a time when the independence and competence of electoral administrative bodies are increasingly under question.”


Nigeria’s anti-graft bank governor to fight ‘bombshell’ suspension

nigeriaLamido_Sanusi_2011_ShankbonePresident Goodluck Jonathan of Nigeria removed the governor of the country’s central bank from his post on Thursday, after the bank governor repeatedly charged that billions of dollars in oil revenue owed to the treasury was missing, the New York Times reports:

The dismissal of the bank governor, Lamido Sanusi (left), was seen as further evidence of the Nigerian government’s weakening resolve in tackling widespread corruption, a problem that has plagued the country since independence, analysts said.

Exactly how much money may be missing is unclear, as Mr. Sanusi acknowledged in a letter to the Nigerian Senate this month. It could be “$10.8 billion or $12 billion or $19 billion or $21 billion — we do not know at this point,” he wrote, adding that the apparent diversion “has been going on for a long time” and could “bring the entire economy to its knees” if it is not stopped.

But he may have taken on too big an opponent in the national oil company. The sprawling company acts as the country’s oil buyer, seller, explorer, producer, processor and regulator, and is “at the nexus between the many interests in Nigeria that seek a stake in the country’s oil riches,” according to a 2010 Stanford University study.

“Sanusi has long been the proverbial gnat in Nigerian president Goodluck Jonathan’s ear, a constant irritation and this month the source of explosive allegations that could interfere with Mr Jonathan’s rumored bid for re-election next year,” says analyst William Wallis:

But the decision to suspend Mr Sanusi from his position as governor of the Central Bank of Nigeria (CBN) could cost Nigeria dearly. Together with the nomination on Thursday of a successor perceived as less challenging, it stunned investors and sent the naira plummeting to historic lows.

Anticorruption activists said that explanation for his dismissal would not be widely believed, the Times adds.

“Nigerians will see it as the result of the whistle he has blown on the non-remittances by the N.N.P.C. to the Federation Account,” said Dauda Garuba of the Revenue Watch Institute, which is supported by George Soros’s Open Society Foundations, among others. “Public opinion agrees with Sanusi.”

Another watchdog group, the Policy and Legal Advocacy Center, said that Mr. Sanusi’s removal exposed “the wider ramifications and impunity of corruption currently bedeviling the fiscal responsibility and accountability of this government.”

In Nigeria, grantees of the National Endowment for Democracy, such as the Socio-Economic Rights and Accountability Project (SERAP), have urged the US to use its leverage to “press the government to exercise political will in fighting high level corruption.”

It is as yet unclear what Sanusi’s “suspension” means, says Council on Foreign Relations analyst John Campbell:

The Central Bank is supposed to be independent of the government; the governor may be removed only by the National Assembly, not the president, and only with cause. The presidential statement announcing the suspension refers to on-going investigations into “breaches of enabling laws, due process, and mandate of the Central Bank.” Sanusi says he will fight the “suspension” to preserve the Central Bank’s independence. At the very least, his “suspension” raises questions about how real the independence of the Central Bank will be.


Spring at last in Bosnia-Herzegovina?


Photo by Nidžara Ahmetašević

Two years ago, Jasmin Mujanovic wrote that a “Bosnian Spring” was the country’s only hope for a brighter future. Now, the spring has come, and with it, the storms, she contends:

For nearly twenty years, Bosnians and Herzegovinians have suffered under the administration of a vicious cabal of political oligarchs who have used ethno-nationalist rhetoric to obscure the plunder of BiH’s public coffers, says Mujanovic, a Visiting Scholar at the Harriman Institute at Columbia University:

The official unemployment rate has remained frozen for years at around 40 percent, while the number is above 57 percent among youth. Shady privatisation schemes have dismantled what were once flourishing industries in Tuzla and Zenica, sold them off for parts, and left thousands of workers destitute, with many still owed thousands of dollars in back-pay. Pensions are miserly too; the sight of seniors digging through waste bins is a regular one in every part of the country, while the wages of BiH’s armies of bureaucrats and elected officials have only grown.

The protests that have erupted across Bosnia in recent days were in some ways no surprise, Florian Bieber writes from Sarajevo:florianbieber-sarajevo

While the JMBG protests fizzled out last year , nothing was resolved and it was clear that new protests would occur, just when and how remained unclear (this also clearly emerged from the discussion at the conference on protests we organized in Graz in December, see here, here and here). What was a surprise was the extent to which they quickly spread from the first protests in Tuzla across Bosnia and the degree to which the occupation and burning down of government buildings became a central feature. Here are some features that have struck me in following the debates and the protests themselves in recent days:

Another defining feature of the protests is the combination of social grievances with dissatisfaction with government and corruption (see here how this fits into the larger picture), Bieber notes:

It is thus not just about opposition to the particular form of economic transition that Bosnia experienced, but also about the state capture. Now, a question that will not be easily settled is the degree to which the Dayton superstructure is to blame. I have been generally skeptical about scapegoating Dayton (here I disagree with Eric Gordy’s otherwise very insightful remarks on Bosnia), not because it is good, but because there are other causes. Many cities in Bosnia are badly governed, including Sarajevo, but Dayton has nothing to do with the functioning of the cities. The reasons that the cities (and cantons) are mismanaged, is less their institutional set-up, but the political elite that governs them. …While the Dayton constitution is far from ideal, talking of changing it is different from actually changing it (I am thus sympathetic to the argument Jasmin Mujanovic makes, but worry that it would not help the protests to achieve change and rather get bogged down in constitutional debates a la Sejdić-Finci, I have written more about this earlier). Constitutional reform has been the third rail of Bosnian politics since the war; it is divisive and will risk bringing ethnicity into the debate.

The fury on display in the streets of BiH over the past few days was an ugly sight, Mujanovic writes for Al Jazeera:

But what is still more hideous has been the past twenty years of corruption, thieving and manipulating on the part of the entirety of the BiH political establishment. Already, they have attempted to deny any personal responsibility and to offer duplicitous temporary solutions. It is much too late for them.

For the people of BiH, however, this is merely the beginning. Tumultuous days are no doubt ahead, but as long as the citizens of this little land do not forget the fear they inspired in their rulers tonight and continue to press their demands, together, they may yet usher in a truly democratic Spring.



Why is corruption less of a taboo? West ‘must help Africa root out graft’

Few countries have experienced the corruption curse more than Guinea, the country’s President Alpha Condé told this week’s Davos Forum.

For generations, internal corruption and a lack of governance and democracy allowed a few predator companies to steal the assets of our people with impunity, he writes for The Guardian:

The Sudanese philanthropist, Mo Ibrahim, recently said of one of the contracts the government are now investigating: “Are the Guineans who did that deal idiots or criminals? Or both?” A good question. And one we hope to answer with the imminent publication of a review into the contracts signed in those dark days of dictatorship.

Guinean activists (above) this week commemorated the massacres of 22 January, 2007, and denounced impunity for rights violations.

There is a terrible irony in our struggle to bring our economy back from the brink, Condé notes:

It is that Guinea is incredibly rich in natural resources – with the largest bauxite deposits and the single largest untapped iron ore assets in the world – none of which, until now, the people of Guinea have enjoyed. A small number of offshore companies, aided and abetted by corrupt domestic regimes, bled Guinea’s resources for decades. ….We are doing everything we can to create a state built on transparency and the rule of law. We do not expect western countries to solve our problems for us. But, starting with those few corrupt institutions they host, I do ask them to be part of a joint solution. 

“Condé’s stance on corruption is an extremely positive development for Guinea and West Africa as whole,” said Kamissa Camara, the National Endowment for Democracy’s West Africa Program Officer. “Elected in 2010 amid high political tensions, Guinea’s first democratically-elected president started his term with some very difficult challenges, including reform of the mining sector.”

“This undertaking has been undermined by ethnic violence throughout the country and in the capital, Conakry,” she adds. “But recent successfully-held legislative elections provide Condé with a solid foundation to push his reform agenda.”

Sometime in the late 1980s-early 1990s there was a shift in thinking about the role of corruption in development, says Augusto Lopez-Claros, the director of Global Indicators and Analysis at the World Bank.

What were the factors that contributed to this shift? he asks, writing on the World Bank blog:

One that quickly comes to mind is linked to the falling of the Berlin Wall ….. It was obvious that it was not inappropriate monetary policies that led to the collapse of central planning but rather widespread institutional failings, including a lethal mix of authoritarianism (i.e., lack of accountability) and corruption……….

A second factor was growing frustration with the plight of people in Africa and other parts of the developing world. ….A third factor had to do with developments in the academic community. In particular, research on the importance of property rights, education and training, and institutions, …. (For a nice survey see, for instance, Acemoglu et. al., “Institutions as the Fundamental Cause of Long-Run Growth”…. Globalization and its supporting technologies have clearly led to a remarkable increase in transparency and to people’s demand for openness and greater scrutiny

Also contributing to the shift in attitude was the work of Transparency International and the publication of its Corruption Perceptions Index (CPI), which prompted World Bank president, James Wolfensohn, to encourage efforts to develop a broad range of governance indicators, including those capturing the extent of corruption.

Read the rest.