If the IMF’s message on corruption is to be more than rhetoric, Lagarde needs to convey it both publicly and privately each time she meets with leaders of the world’s most corrupt nations.
“Zero tolerance for corruption must be foundational. The state must be the servant rather than the master of the people,” Christine Lagarde, the International Monetary Fund chief, saidearlier this year. But during her early December visit to Cambodia, named the second most corrupt country in East Asia and the most corrupt in the region that has formal relations with the IMF, she said nothing of the sort.
Transparency International’s latest corruption perceptions index, publishedduring Lagarde’s visit,rankedCambodia behind only North Korea in East Asia, at 160 of the 177 countries surveyed. The Asian Development Bank has similarly foundthat corruption continues to be the “main area of concern for improving the business environment and overall governance in Cambodia.” This is nothing new. In 2005, James Wolfensohn, then the World Bank president, saidthat Cambodia was facing three major challenges: “corruption, corruption, corruption.”
The IMFrecognizes that corruption threatens market integrity, distorts competition, and endangers economic development, all while undermining the public’s trust in its government. Yet the IMF chief failed to mention this scourge, even obliquely, during her first visit to the country as head of the IMF. Lagarde emphasized inclusive growth, recognizing the gross inequalities in the country, and encouraged greater investment in education and jobs. But she ignored the misappropriation of state resources that siphons away desperately needed funds for education and other essential government services.
Lagarde also did not publicly acknowledge other key governance problems that harm the economy, exacerbate corruption, and deepen social and political problems. Cambodia’s courts remain controlled by the ruling Cambodian People’s Party (CPP), making the rule of law a still distant dreamfor Cambodians and investors alike. She didn’t mention what even otherwise cautious diplomats consistently highlight: the land grab crisis that benefits Prime Minister Hun Sen, other government officials and their cronies. This is no small issue in what is still a largely agrarian country.
Lagarde’s silence on these matters was even more apparent since her trip coincided with a political crisis after a deeply flawed election manipulatedby the ruling party. Just before she arrived, a coalition of independent domestic and international election observation groups detailedserious electionirregularitiesthat could have changed the outcome of a close election and would have prompted a re-vote in many countries.
She could have met with the leaders of the political opposition to discuss their economic proposals. Instead, the IMF acted as if none of this existed when Lagarde met with Hun Sen on his 10,550th day (more than 28 years) in power and publicly shared her belief that Hun Sen’s government is resolved “to lay down a firm foundation of good governance.”
While the IMF might argue that elections are beyond its mandate, it can hardly dismiss corruption. Corruption corrodes every sectorof the country. When I visited Cambodia this year, parents told me their children could only take their tests if they paid extra, “off the books,” fees to their grossly underpaid teachers. A government employee whose salary was paid by the private sector, which is problematic in itself, described the look of horror on his boss’s face when he asked for a record of tax paid. He could only assume it went into his boss’s pocket.
The UN special rapporteur on human rights in Cambodia, Surya Subedi, has foundcorruption to be widespread at all levels in the judiciary. Judges rely on patronage and political protection for job security, compromising their independence. A recent United States government reviewof the investment climate in Cambodia echoed concerns about corruption within the judiciary, saying, “Business people, both local and foreign, have identified corruption, particularly within the judiciary, as the single greatest deterrent to investment in Cambodia.”
Cambodia experienced one of the highest national ratesof forest loss from 2000 to 2012, according to arecent study. And while Cambodia’s Forestry Law prohibits logging of rosewood, Chinese import documents provided to The Cambodia Daily reportedlyrevealed that 36,000 cubic meters of rosewood logs were transported from Cambodia between 2007 and 2012.
The Asian Development Bank has also pointed toongoing informal links between the ruling party, medium-sized and large businesses, and senior levels of government. It recognized high risks of problems in procurement, citing procurement specialists who suspect that tendering agencies engage in a wide range of dodgy practices, including an expectation of kickbacks from those who win government contracts.
No comments:
Post a Comment