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Eric Bloch Column

Corruption consuming fabric of economy

nguage: JA”>THE Minister of Finance and Economic Development, Herbert Murerwa, is reported to have told the National Economic Consultative Forum (NECF) that “corruption has become like a cancer striking on the fibre of our economy”.

In view of this unacceptable circumstance, he informed the NECF that government is “finalising legislation on an anti-corruption commission in compliance with” the Zimbabwean constitution. Progress to that end was, he stated, that the Attorney General’s office has prepared a draft Bill which is to be forwarded to cabinet for consideration and approval. Thereafter, the Bill will be placed before parliament with a view to promulgation before the end of 2003.

Not only is such action necessary — it is very long overdue. The tolerance of corruption ever since Independence in 1980 has pervaded every sector of society. It is equally pronounced within the public and the private sectors. It has long been known that there are many in high office, or closely related to those in high office, who have unstintingly availed themselves of the numerous corrupt opportunities that confront them everyday. Some of those are politicians, others are public servants, and their corrupt practices are wide-ranging and diverse. They have ranged from accepting “commissions” into foreign banking accounts, to receiving gratuitous allocations of shares in companies and participation in “joint ventures”, demanding and being given “gifts” of overseas trips, motor vehicles, and the like, and to their children being awarded “scholarships” for study at leading schools or universities in Europe or the United States.

They include circumventing prescribed, long-established tender procedures for the award of government contracts, and diverting business opportunities from promoters seeking requisite authorisation to themselves and their relatives. And they include the unauthorised usage, misuse, and abuse of state assets.

The private sector is no less guilty of corruption. Instances of purchasing officers receiving handouts in exchange for ensuring that orders are directed to particular suppliers, the falsification of claims for travel expense reimbursement, and unauthorised use of motor vehicles are but a very few examples of the myriad corrupt practices that have become the norm in commerce and industry. So frequent and extensive are instances of corruption that many have come to accept them as inevitable facets of operation.

In describing corruption as a cancer, Murerwa is absolutely correct. It spreads insidiously throughout the body of the economy, debilitating it more and more until it suffers an agonising, hideous death. To counter it and halt its spread, the first action necessary is to diagnose it. That the minister has clearly done, notwithstanding that for almost 23 years government has sought to deny the existence of the ailment or, at the most, to downplay and disregard it.

The second stage is to appreciate the disastrous consequences of allowing the cancer to continue unhindered. Over and above the moral consequences of corruption upon society, it has disastrous repercussions upon the economy and therefore upon the wellbeing of the population (other than the beneficiaries enriching themselves at the expense of the nation).

Corruption is a very major contributor to inflation in several ways. When bribes are paid, whether in cash or in kind, it is in order to gain an advantage. He who pays the bribe treats it as a business expense which he costs into the selling prices of his goods or services, thereby increasing those prices to levels higher than would otherwise apply. If those prices are for supplies to the state, they increase the total of the state’s expenditure and thereby the extent of its deficit, and consequently also the extent of its borrowings. And when state borrowings are excessive, they fuel inflation. The same consequences result from corrupt abuse of state assets.

Similarly, corruption in the private sector increases the costs of production or of business operations, forcing the businesses to pass those costs on to their customers, and hence inflation continues to rise. Corruption also erodes the moral fibre of society. The acceptance of corruption and the failure to contain it or bring its perpetrators to justice motivates many to consider all crime, and especially commercial crime, to be acceptable. Not only is there a direct negative impact upon the economy, but there is an equally great, albeit indirect, repercussion upon investment and international funding support.

Whilst, to varying degrees, corruption exists worldwide, most investors are ill-disposed to invest in environments where corruption is particularly pronounced. Not only do they not wish to be tainted by association with the image of gross corruption, but they are aware of the corrosive effects of corruption upon an economy and that, therefore, investment into an extremely corrupt environment must be subject to excessive risk because of the adverse economic circumstance.

However, government’s intent now to progress the promulgation of an Anti-Corruption Bill and to establish an Anti-Corruption Commission, is meaningless unless there is a concurrent change of government attitude to corruption. Existing legislation has given the state the tools with which to prosecute the corrupt and yet the prosecutions have not occurred. Years ago, the Chidyausiku Commission identified numerous abuses of the payment of compensation for physical and other losses sustained by Zimbabweans during the pre-Independence struggle. However, very few prosecutions resulted, and there must be many hundreds of files gathering dust in the offices of the Attorney-General.

The same can be said of allegations by a former government minister that corruption was then widespread within the National Oil Company of Zimbabwe. Despite those allegations, no prosecutions have materialised. And these are but two of many examples.

It is inevitable to draw certain conclusions from the fact that in its youth, Zanu PF introduced a leadership code which required regular and total disclosure of assets and of networth. But, when has the party ever applied that code? If it has (which is beyond contemplation), how can it be explained that so many have accumulated vast wealth way beyond their known sources of income, no mater how astutely that income may have been invested?

Based upon track record, the now contemplated legislation must be viewed sceptically, until government demonstrates that it will not merely be an addition to the statute book, but will be unreservedly applied. In particular, the intended Anti-Corruption Commission will be meaningless unless it is composed of persons of undoubted repute and integrity, willing to fulfil their duties without fear or favour. The commission will have to be equipped with the implements which will make it possible to fulfil its functions absolutely. Those implements must include the power of subpoena of persons, records and documents. They must also include the power of plea-bargaining and of amnesty, so that the commission has the opportunity of maximised access to required information. And, independently of the Attorney-General’s office, the commission must have the power of prosecution. That power must be unrestricted, no constraints of non-prosecution because of the status or influence of any who should be prosecuted existing. The commission must, when possessed of good and sound grounds, be empowered to initiate proceedings against any, irrespective of their position in society.

To reinforce those powers, the commission must also be given the requisite investigative resources, including forensic accountants, skilled lawyers and other appropriate skills. It must be given unequivocal support of all arms of government, and especially of those as are the economic ministries, the Reserve Bank of Zimbabwe, and the Zimbabwe Republic Police and the Central Intelligence Organisation. Unfortunately, but unavoidably, the involvement of some of those arms of government will be synonymous with the maxim “it takes a thief to catch a thief”.

There can be little doubt as to the good and genuine intentions of Murerwa, but can the same be said of government as a whole, or will the promulgation of the proposed anti-corruption legislation be just another of the facile government facades that have characterised much of its policies hitherto?

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