Before addressing the motive of corruption-greed, poverty and capitalism- let me extend thanks to Rodney Sieh and his co-workers for the efforts on their part to expose corruption in Liberia. Fighting corruption is now occurring in every corner of the world. Yet a successful war on corruption cannot be won without combating all motive of corruption. So while President has not held a national conference to discuss the ills of Liberia, it was interesting to hear her identifying motive of corruption.
Surprisingly, President Sirleaf left out the primary motive (capitalism) and presented two types of motive (greed and poverty) of corruption during her interview with a Liberian newspaper, New Democrat. Well renowned economists had and continue to point at capitalism as the primary culprit of corrupting the financial system that collapsed in 1630, 1907, 1933, 1987, 1989, 2000 and 2008.
Many writers have already put the accused bureaucrats under scrutiny. So, I am not concerned with the efforts to identify which Presidential advisors received bribes or whether the President herself received bribes. Neither am I searching for investors who provided $2.5 million or 600k in kickbacks. Rather, Liberia should identify reasons why the donors provided kickbacks to bureaucrats, who were either greedy or poor. A study is necessary to ensure that Liberia does not, once again, become a victim of “Resource Curse.” This phrase is applied when investors' management of resources breeds chaos, instead of prosperity.
Instituting prosperity is difficult, more so when capitalism, another motive of corruption is not addressed. That's why this article focuses on the corrupting aspects of capitalism since the other two types of motive (greed and poverty) are self-explanatory. An economic system called capitalism or Darwinism (i.e., the idea of the fittest survives, or everyone for himself) enhances ingenuity, but it also promotes selfishness, greed or exacerbates poverty. And at most times it ends up creating other motive of corruption, by creating environment in which employees are compelled to augment their meager resources. Worse, capitalists usually blackmail, intimidate and post threats to well-paid, selfless and patriotic employees who decline grafts. (John Perkins, Economic Hit Man).
Chief executives offering bribes in exchange for favors from bureaucrats are performing business responsibilities, and not driven by poverty or greed. A German corporation, Siemens like many corporations sets an allocated amount, every year, to bribe officials of any country whenever necessary. (NY Times, 12/21/08). In Liberia, Mittal Steel or Cellcom did offer vehicles, bribes, etc to lawmakers and advisors in exchange of favors. Of course favors in the form of miniscule taxes do reduce government's revenue, thereby forcing citizens to fetch for additional sources to make ends meet.
Conflict of interest (an employee serving two masters), cultivated by profiteers, adds to the layers of corruption. Capitalists, searching to increase profits, usually, opt for less investment in skilled manpower. Consequently, the shortage of professionals allows, for instance, our lawmakers to also serve as lawyers for Bong Mines, Firestone, etc. And other advisors become part-time employees, partners, customers or suppliers.
Exchanging bribes for a country’s natural sold on the cheap is the primary reasons why the privileged few accumulate enormous wealthy at the expense of Liberia. Because once they become de facto owners of lucrative assets, they do anything to increase profit such as polluting drinking water, etc. For instance, hedge fund managers do bet on the weather (snow, sun, rain, temperature). (NY Times, 01/18/09). So if capitalism is a fragile financial system that uses bribes to produce unimaginable wealth for a privileged few while breeding chaos in communities, according to Paul Volcker, a former Federal Reserve chairman, why President Sirleaf is not considering capitalism as one of the motive of corruption?
Additionally, how can President Sirleaf embrace capitalism to fulfill her promise of food sufficiency, if President George W. Bush is switching from capitalism to socialism in resuscitating U S industries? As Den Xiaoping said "It doesn't matter if a cat is white or black, as long as it catches the mouse." President Nicolas Sarkozy of France and Prime Minister Gordon Brown of Britain accepted this concept and called an Economic Forum to change capitalism as we know. Nonetheless, President Sirleaf, did preach the American-style capitalism, which President Sarkozy pronounced dead. At the Economic Forum held in Paris, France this month, she said that government’s intervention will promote corruption and reduce any sustainable economic benefits to be derived from capitalism.
I guess President Sirleaf’s aversion to any alternative to capitalism blinded her to the purpose of the Forum. Having attended George W. Bush Economic Forum held in the U.S. in November 2008, European countries organized the January 2009 Conference because they are opposed to the American-style capitalism. In case the European Forum is new, President Sirleaf should be aware of reasons why countries in South America reject World Bank policies in favor of socialistic system. So were the Chinese in 1915-1949, Russians in 1914-1917, and now France. France, for example, having experienced privatization, did not only advocate government’s intervention, but is now encroaching on the turf of capitalism within the United States. The French state-owned utility company (EDF Group) bought 49.9% stake of constellation operating in Maryland, New York, etc. (New Times, 12/18/08).
If discussions at the European Forum were not convincing, why not compare the activities of the western corporations to projects implemented by state-controlled agencies. The state-controlled activities in Liberia exemplified by the Chinese government versus the flagrant corruption under capitalistic system in Liberia contradict Sirleaf’s reasons for advocating for capitalism. For example, unlike the Chinese government, the U.S. government and the World Bank have spent over one billion dollars through capitalistic system since 2003, yet with no tangible results.
Bribery continues to reduce the impact of development aid or loans from the World Bank, the same way it assists investors in exploiting strategic assets. And efforts by academicians and officials have failed to curtail bribery, because investors need it to compete. As other countries such as Botswana are doing, the viable remedy is by increasing government's role in managing lucrative assets. However, such an approach might force Liberia to gradually switch away from American-style of capitalism. And as 2011 gets nearer, President Sirleaf might not want to bite the hands that will finance her re-election.
J. Yanqui Zaza
© 2009 by The Perspective
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