Anti-Corruption Website
Namibia's Zero Tolerance for Corruption Campaign
|
Anti-Corruption Website
|
|||||||||||||||||||||||||||||
|
Home • Namibia Brief • Campaign Information • Integrity • Links • Contact • Disclaimer • SiteMap | |||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||
| Cost of Corruption | |
|||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||
| Foreword | Causes of Corruption | |||||||||||||||||||||||||||||
| Corruption is a global phenomenon with a negative effect. It is socio-economically wasteful, politically destabilizing and destructive of governmental capacity. | Low Salaries: |
|||||||||||||||||||||||||||||
| The economic, social and political
costs of corruption are: |
||||||||||||||||||||||||||||||
| Escalating poverty levels | ||||||||||||||||||||||||||||||
| Corruption leads to a growing gap between the rich and the poor and deepens poverty by enriching a few at the expense of fellow citizens. Under a corrupt system, there is a concentration of wealth in the hands of a tiny minority of the population. Resultantly, income distribution becomes highly skewed. Closely associated with the concentration of wealth in the hands of a few, a distorted consumption pattern, aimed at meeting the luxurious lifestyle of the urban elite, emerges. | ||||||||||||||||||||||||||||||
| Corrosion of economic development | ||||||||||||||||||||||||||||||
| Economic development is essential for every nation, in essence, corruption contributes to huge national debt, which may become impossible to service. Economic reforms require transparency, accountability, free and fair competition, deregulation, reliance on market forces and private initiative. Corruption therefore counters economic reforms and constrains the country’s capacity to undertake them. Resultantly, the efficiency of the economic system breaks down through the creation of unfair competition, price increases, wasted resources and increased unemployment. Inevitable, poverty increases. Corruption has an undesirable negative impact on both the revenue and expenditure side of the government budget. On the revenue side, paying bribes for reduced taxes, fees, and custom duties lead to revenue (income) losses for the state. Crimes such as embezzlement, fraud and the misappropriation of funds increase these losses. The impact on expenditure is less obvious, primarily because large benefits can be gained from corrupt deals on items that are expensive, where costs are not apparent and which are considered to serve national interest so that they have to be conducted in secret. Expensive military equipment and large expensive projects ideally meet these requirements and, as good candidates for corrupt deals, are ideal for inclusion in the national budget. In contrast, teachers’ salaries, outreach health care programs and pensions do not provide such opportunity for kickbacks and tend to receive minimal attention in the budgets of corrupt regimes. Resultantly, priority needs that would contribute to development and easing the burden on citizens are ignored. Associated with dictators of poor countries, corruption on a grand scale includes embezzlement of huge sums of public funds and is associated with mismanagement, wastage, inequity, and social decay. Capital accumulated by corruption that is invested or banked off-shore is a considerable loss for the development of the country. Corruption furthermore contributes directly to an increase in underground activities. Such economic activities are either illegal (such as the drug and arms trade or smuggling business) or legal (but not officially recorded to evade taxes). As a result, key macroeconomic indicators and data (such as foreign trade statistics, the official exchange -, inflation - and the interest rates) represent only the formal sector and no longer reflect the country’s true economic status. Official macroeconomic data becomes unreliable to asses economic performance or to provide a foundation for policy making analysis. As proper economic accounting and macroeconomic management becomes difficult, there is not much hope for economic development, modernization, or the emergence of a well functioning market economy. |
||||||||||||||||||||||||||||||
| Undermined legitimacy of the public service | ||||||||||||||||||||||||||||||
| Under a corrupt system, developmental decisions affecting the country and communities are not made according to what is just and true, but according to how much there is to gain financially by such decisions. Corrupt decisions are not made to benefit all the citizens of a country; instead, they are selfish acts placing the interests of an individual or special group before those of the community in general. Corruption increases the cost of administration, since the public has to pay more to access public services. The burden of corruption falls more heavily on the poor as they cannot afford to pay the required bribes. When competition for jobs is extreme, corruption often takes the form of ethnic discrimination. As a result, corruption can intensify interethnic tension and distrust and can exacerbate problems of national integration in developing countries. Corruption leads to the employment of people without required skills, expertise and training and nothing more than their political or ethnic qualifications. Accordingly, the employee is unable to fulfil the requirements of his/her job description, will not be respected by subordinates and the quality of service delivery by the public service is undermined. |
||||||||||||||||||||||||||||||
| Damage to reputation and investment potential of a country | ||||||||||||||||||||||||||||||
| With the end of the cold war, there is less interest by major donors to distribute development aid based on political considerations and preference is given to good governance considerations. As a result, donor countries consider whether development aid is used efficiently and effectively, ascertaining whether the target group of the aid indeed benefits from it. As a consequence of corruption, outside donors may withdraw from the development arena in developing countries. Additionally, corruption’s impact on foreign investment is considered to be particularly harmful for a developing economy. Corruption not only raises the initial costs of investment but, by increasing risks and uncertainty, can reduce the incentive to invest. Foreign direct investment is vital to a developing country and it is crucial to provide a climate for investments. Corruption makes it difficult for a low income country to establish and maintain trustworthy and consistent economic conditions. |
||||||||||||||||||||||||||||||
| Destabilizes democracy and governments | ||||||||||||||||||||||||||||||
| Corruption can create conflict between nations and destroys trust and confidence in democracy and in governments. It undermines democracy and the legitimacy of the regime and may be a direct cause of political instability and the disintegration of existing political institutions. Corruption casts doubt on the government’s honesty and on the exercise of justice in the country. It destroys the public’s trust in the government and creates an atmosphere of helplessness and despair among the citizenry. This lack of trust and the despair can destabilise governments and destroy the economy. At the root of corrupt practices is the exchange of money or rewards. International travel, parties, hotel accommodation, gifts and discounts on purchases are a common ways of bribing officials. These corrupt practices often determine the structure of political and economic relationships within a given context, undermining democracy and the rule of law. For example, when bribes are paid to prevent law enforcement, respect for the rule of law is undermined and, ultimately, lost. At the international level, it creates major disturbances in international economic and political relations. Corruption cultivates a culture of dishonesty and creates distrust in leaders. Corrupt people need to conduct their corrupt activities in secret in order to evade punishment. This concept of secrecy contravenes the idea of democracy in which sovereignty is vested in the people and the government must be transparent in order to remain accountable. Corruption undermines democracy due to this lack of accountability and transparency. Corrupt elected representatives and officials show no respect for the democratic rights of the citizens they represent and serve. Economic gain through corrupt means can cause serious social harm and hinder the protection of public interest. Corruption can be defined as the diversion of public resources to non-public purposes and, as public services are neglected, ordinary citizens are the indirect victims of corruption. |
||||||||||||||||||||||||||||||
| Increased serious crimes | ||||||||||||||||||||||||||||||
| Corruption paves the way for other serious crimes, including terrorism, drug trafficking, gun running, money laundering, identity theft, trade in humans and endangered species. Unlike other types of corruption such as bribery, embezzlement and nepotism, which are in essence usually non-violent, widespread corruption and an inadequate legal and administrative system with insufficient resources, allow organised, violent crimes to flourish. Frequently linked to a murky, dangerous underworld, such organised, sophisticated crime syndicates are willing to protect their interests at any costs and find it increasingly easy to buy help, favours and influence from the public and private sectors without fear of any repercussions. | ||||||||||||||||||||||||||||||
| Weakened moral values | ||||||||||||||||||||||||||||||
| Corruption is condemned everywhere in the world and by all the major religions of the world. It is an attack on moral values and if it is not stopped, it breeds an evil that destroys a society. Greed, at the heart of corruption, is a great motivator and in the event that the crime of corruption is not punished, perpetrators are willing to sacrifice their moral standards, values and integrity for money. | ||||||||||||||||||||||||||||||
| Home | Namibia Brief | Campaign Information | Integrity | Links | Contact | Disclaimer | Site Map | ||||||||||||||||||||||||||||||