Poisoning the system

OF ALL THE PROBLEMS within their society, corruption is probably the one that Arabs complain about most – in private if not always in public. Resentment at official corruption has become a galvanising factor for opposition movements, especially the Islamist opposition, providing them with opportunities to claim the moral high ground. Rampant corruption in the Palestinian Authority, for example, is generally regarded as a key factor behind the unexpected electoral victory of Hamas in 2006.

“Corruption starts top-down,” said Aida Saif al-Dawla, an Egyptian political activist and professor of psychiatry. “If I’m corrupt the only way to ensure that I am safe is to corrupt my juniors. When you go higher up, it is called commission – it has a nicer name.”

Whatever name it goes by, corruption flourishes at all levels where the social climate is conducive. It ranges from petty “survival” corruption where government employees supplement their meagre salaries by extracting money from the public in small amounts, to “structural” corruption involving government contracts and “commissions” on them, often with the knowledge and blessing of the highest echelons of power.

In general, the bigger the contract the more scope there is for making money on the side – and in the Middle East oil money has made matters worse. With booming revenues from the 1960s onwards, the Gulf states had plenty to spend on vast infrastructure projects and military aggrandisement, and western governments and companies were happy to supply their needs. But securing a contract was not simply a matter of offering the best service at the most competitive price. Shortly after David Owen took over as Britain’s foreign secretary in 1977 he received a confidential letter from the British embassy in Jeddah explaining the complexities of doing business with the Saudis:

The exact nature of the Saudi decision-making machinery is obscure but certainly much is settled by agreement between the senior princes. To secure a contract, a company must secure the support not merely of a senior prince, often through an established agent through whom very substantial commissions have to be paid, but also of many ministers and officials down the line.

Western governments and companies connived in this, apparently without serious qualms, because they knew their export sales depended on it. It was also difficult to avoid when rivals were resorting to bribes and the use of fixers too. In the words of Sir Ian Gilmour, a former British defence secretary, “You either got the business and bribed, or you didn’t bribe and didn’t get the business.”

Probably the most notorious of these east-west deals was al-Yamamah, a series of contracts under which Britain supplied arms to Saudi Arabia (see below).

The extent of corruption

THERE IS no doubt in the minds of most Arabs that corruption is rife. More than 90% of participants in a survey for the Arab Human Development Report (2004) believed it to be pervasive. Though the survey covered only five countries – Algeria, Jordan, Lebanon, Morocco and Palestine – “it is not expected to be less widespread in those countries that were not part of the survey,” the report said. It noted that in the countries surveyed “politicians, businessmen and high-ranking officials head the list in the spread of corruption”, while corruption is also considered prevalent among the judiciary and in social relations. In another survey, conducted in Lebanon, 74% of Lebanese felt that “bribery is necessary to secure a contract from any public institution” and a quarter of those questioned believed that “all Lebanese politicians are corrupt”.

Such problems are certainly not confined to the Arab world, but in international comparisons the Arab countries fare badly. In the Corruption Perceptions Index for 2008 compiled by Transparency International, only one Arab country ranked among the top 30 (out of 180). Qatar, 28th in the list, was regarded as the least corrupt, while Iraq and Somalia were the most corrupt. This annual survey also assigns a score between one and 10, with 10 regarded as highly clean and zero as highly corrupt. Several countries, such as Denmark, Finland, New Zealand and Sweden regularly score nine points or more but in 2008 only five Arab countries managed to reach above the half-way mark:

For obvious reasons, actual levels of corruption are notoriously difficult to measure on the basis of hard evidence. Transparency International’s index relies on the assessments of experts and business people – “those who are most directly confronted with the realities of corruption in a country” . It focuses specifically on perceptions of corruption among public officials and politicians.

A different approach to corruption measurement comes from the World Bank, which publishes its Worldwide Governance Indicators every year. Six indicators are considered, all of which have some bearing on corruption levels: accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. Extrapolating from the World Bank’s figures, the Arab Human Development Report of 2004 compared the Arab countries with six other regions of the world: Africa, Asia, Europe, North America, Latin America and Oceania. In terms of accountability, the Arab countries were the worst by a wide margin, while in terms of political stability, government effectiveness, rule of law and control of corruption, only Africa was worse than the Arab countries.

Effects of corruption

IN PRACTICAL terms, corruption has many harmful effects. It is intrinsically unfair; it undermines democratic processes, distorts free markets, denies people equality of opportunity and in general creates obstacles to progress. Though petty corruption (small payments to low-level officials) is often regarded as unimportant, evidence compiled by Transparency International shows that the poorest in all societies are the ones hit the hardest by bribery: “They face the most demands for bribes and they are more likely to pay. This in turn means that corruption acts as a regressive tax that increases income inequality. Denied their basic rights and free access to public services, the poor suffer most in corrupt environments.”

Petty corruption also has the effect of making inefficient bureaucracies even more inefficient: delays and obstructions proliferate in order to maximise the revenue from bribes that circumvent them. Where bribery is used to circumvent legitimate requirements (to over-ride safety regulations, for example) it has the effect of lowering standards and undermining government policies. Knowledge that the state’s official representatives are also engaged in corruption not only encourages others to do the same but lowers respect for the legitimacy of government.
Higher-level corruption involves much larger amounts of money, often in the form of kick-backs on government contracts. The problem here is not just the percentages creamed off into private hands but the way contracts can be shaped at the country’s expense to maximise private gain. As Dieter Frisch, the former director-general for development at the European Commission has noted:

The corrupt decision-maker may well be tempted to accept a substandard quality of service which will make his personal profit all the greater. Thus, with a road-building project for example, complicity between government departments and contractors may result in corner-cutting with regard to agreed standards of quality so that the savings made may be shared out between the two parties.

At their very worst, the disastrous effects of corruption mean that the conception of a project, and ultimately its very choice, are determined by corruption. As far as conception is concerned, a good example would be the purchase of a technology which is wholly unsuited to the particular needs of a country or the choice of a capital-intensive project – more lucrative in terms of corruption – rather than a labour-intensive one which would nevertheless be far more beneficial to that nation’s development.

The peak of perversion, Frisch continued, is when government priorities are shaped in a way that generates the greatest personal gain for the decision-makers.

Although such practices are seriously at odds with standard Islamic teaching, there are specific factors in Arab countries that exacerbate the problem of corruption and make it so prevalent:

The politico-legal structure of some Arab states makes it difficult to differentiate between corruption in its conventional form (abuse of public office for personal gain), and an inherent failing (rigged rules) in the system itself. For example, in some states both law and custom decree that the land and its natural resources belong to the ruler, and fail to distinguish at this level between the private and public life of the ruler, while the private property of the ordinary citizen becomes a grant from the ruler. In such a situation, it is difficult to talk of corruption in governance, for whatever the ruler does, he is disposing of his own property.

Some regimes set up economic institutions attached to their military or security apparatus, to finance their activities. Here again matters become confused; it becomes difficult to draw the line between the exercise of an official function (since individual corruption may be but a reflection of the corruption of the whole situation) and what can be described as personal corruption.
In addition, there are ways to manipulate laws that, in many Arab countries, do not allow senior officials to carry out private business while they occupy an official post. Many officials circumvent the law by allowing members of their families to set up companies and enterprises that often benefit from the official’s position and relations [AHDR 2004, p136].

Source: What's Really Wrong with the Middle East, by Brian Whitaker (Saqi Books, 2009).

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Further information

The effects of corruption on development
Dieter Frisch. The Courier ACP-EU, No 158, July-August 1996.

Corruption Perceptions Index
Transparency International

Corruption Perceptions Index
Background information from Wikipedia

Transparency International’s corruption perceptions index: whose perceptions are they anyway?
A critique by Theresa Thompson and Anwar Shah. World Bank, March 2005.

Worldwide Governance Indicators
Reports from the World Bank, 1996-2008

United Nations Convention against Corruption
Full text, plus list of signatories.

The United Nations Convention against Corruption: a primer for development practitioners
Discussion of the convention by Jessica Schultz. Anti-Corruption Resource Centre, 2007.

Confidential letter to David Owen
From the British embassy in Jeddah, ECO/121/3(E), 3 May 1977.

Morocco’s 'video sniper' sparks a new trend
menassat.com, 12 November 2007.

Letter from Antony Acland
To Sam Falle, British Ambassador in Kuwait, 11 June 1970. British National Archives, WO S2/20748.

Egypt school exam cheats jailed
BBC website, 9 September 2008.

Tricksters go academic
Gamal Nkrumah. Al-Ahram Weekly,19 June 2008. .

Former Syrian PM commits suicide
BBC website, 22 May 2000.

Syria's night of long knives
By Gary Gambill. Middle East Intelligence Bulletin, Vol 2 No 5, June 2000.

Syrian state inquiry finds minister killed himself
Brian Whitaker. The Guardian, 14 October 2005.

Syrian official 'arrested for corruption'
BBC website, 25 June 2000. .

Two former ministers convicted, imprisoned on corruption charges
Middle East Intelligence Bulletin, Vol. 3, No. 11, November 2001.

Airbus’s secret past
Discussion of corruption allegations involving Airbus. The Economist, 12 June 2003.

Three Syrian MPs to be tried for stealing public funds
Middle East Intelligence Bulletin, Vol 2 No 6,July 2000.

Saudi bribery cases surge, despite crackdown
Amy Glass. ArabianBusiness, 20 February 2008.

Eight health officials accused of graft
By PKAbdul Ghafour. Arab News, 30 July 2008.

Saudi health ministry exposes bribery attempt
By Mariam Al-Hakeem. GulfNews, 13 August, 2008.

Contaminated blood bags implicate member of parliament
By Ahmed Maged. Daily Star Egypt, 10 January 2007.

Public prosecutor files a notice of appeal
By Ahmed Shalabi. Al-Masri al-Youm, 11 June 2008.

A tale of corruption in Syria: the case of Taleb al- Jassim
By Hassan Al Huwaidi. Tharwa Foundation, 5 November, 2008

Eyewitness report: corruption plagues Damascus International Airport
By Ajmad Al-Shami, lawyer and human rights activist. Tharwa Foundation, 13 June, 2008

Rising competition in Syrian university a sign of corruption, nothigher standards
( Tharwa Foundation)

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Al-Yamamah

al-Yamamah
Background from Wikipedia

The BAe Files
Investigation of al-Yamamah by the Guardian.

Briefing for the prime minister’s meeting with Prince Sultan
British Ministry of Defence, 25 September 1985.

BAE accused of secretly paying £1bn to Saudi prince
By David Leigh and Rob Evans. The Guardian, 7 June 2007.

BBC lifts the lid on secret BAE slush fund
By Michael Robinson. BBC website, 5 October 2004.

BAE chief linked to slush fund
By David Leigh and Rob Evans. The Guardian, 5 October 2004. .

Saudi prince 'received arms cash'
BBC website, 7 June 2007.