Business’s Bribery Shifts Country Dividends To A Privileged Few
By J. Yanqui Zaza
|The Liberian government paid $31,000, predictably, to each Liberian Senator, to approve an Oil Agreement between Liberia and the Liberty Petroleum Corporation|
For big business to get its sweet heart deal, President Ellen Johnson Sirleaf paid $31,000, predictably, to each Liberian Senator, to approve an Oil Agreement between Liberia and the Liberty Petroleum Corporation, an American Company. President Ellen Johnson Sirleaf, against the advice of Global Witness that Liberia should not negotiate any concessionary agreement from a position of weakness as well as in the midst of the Ebola Crisis, did otherwise. Lawmakers wasted no time in approving President Ellen Johnson Sirleaf’s request after they received the $31k each. The bribery check issued to Senator Sando D. Johnson reminded me of an earlier big business bribery case, famously known as the Clemenceau Urey bribery case.
In the Urey bribery case, checks were paid to lawmakers in order for them to approve another sweet heart oil agreement awarded to a big business. The Audit Commission Report did discover a photocopy of the bribery check and advise the Executive Branch to prosecute Urey and others in accordance with the Liberian Statutory Law on Bribery. Is the recent bribery payment prosecutable? Better yet, would successful prosecutions of bribery cases inhibit big business from offering bribes as part of business transactions to promote and protect profit-rights? These questions are good issues for another discussion.
But for now, let us review the impact of big business bribery on social and capital investments. Reviewing the budgetary documents of Liberia as well as Ghana, Sierra Leone, Guinea, etc., I did observe several similarities. The different budgets show that these countries received minimal revenue and, or dividends from their natural resources. And consequently, they are compelled to generate significant portion of these revenue from user’s taxes (excise tax, import, value added tax, etc.). And of course, user’s taxes are the primary sources for the continuous increase in the prices of goods and services. Other casualties for the minuscule revenue from natural resources were the limited investment in social and capital investments and excessive borrowing as well as the high cost of indebtedness.
Besides reading the World Bank’s economic policies such as “Poverty Reduction Strategy” and “Millennium Challenge Goals” within the different budgetary documents, I also read that democratic leaders governed all of these countries. So, why are these countries experiencing deficits year after year, even though they are endowed with abundant and lucrative natural resources, managed by democratic leaders, and supervised by the World Bank? Consequently, the increase in deficit, as well as borrowing, is forcing bureaucrats to shift limited revenue from social programs to pay huge interest expense to lenders such as the World Bank.
If democracy and World Bank’s supervision are not the remedy, what else? What if big business did not offer bribe in exchange of sweet heart deals? What if these countries’ economic policies did stipulate within their laws for the government to receive a reasonable share of the dividends and, or profits from the management of these resources? Or more so, why is it that the democratic system has instituted economic policies that shift the country’s resources dividends to a privileged few?
In a paper called “Democracy Dividends, Not Democracy” delivered in 2012 by Sylvster Odion Akhaine, the failure of democratic policies was presented. He said the universal question is whether Democracy can deliver “Dividends.” He added, apart from the moral appeal, “Democracy” has yet to put food on the table in Africa, or in other words, has yet to solve the issue of bread and butter.
Maybe because of my shortcomings, I did not find within the discussion the issue of how big business’s bribery has a ripple effect on the war against corruption. In fact he kind of indicated that the electorate was partly responsible for the failure of democracy because they were voting with their pockets, but not with their interest. In fairness to Mr. Akhaine, such a view, of shifting the blame to the voters, is widely shared by scholars as well as ordinary citizens.
The Liberian history is replete with prosecuting corrupt officials, yet corruption is rampant. President E. J. Roy was executed for corruption. So were President William R. Tolbert and thirteen other officials in 1980. President Samuel K. Doe was not spare either. President Charles Taylor is in prison for life. Therefore, instituting policies that reduce the profit motive might reduce corruption. For example, if a government were to share in dividends and, or profits, investors might have less incentive to offer bribe. On the other hand, private owners of a lucrative resource will offer the highest bribes in order to earn huge profits at the expense of society.
The concept of government or institution instituting policy to protect its interest is universal. For example, let us look at Liberty Petroleum Corporation, the giver of the bribes in exchange of the recent sweet heart deals. On its web Site a sentence reads, “Over the last ten years Liberty successfully gained direct government grants to ten international petroleum exploration blocks…” http://www.libertypetroleumcorporation.com/properties.html. This statement implies that America institutes laws that allow the government to indirectly participate into the ownership and management of other countries’ natural resources, while it prohibits poor countries from playing the same role.
Centuries ago, when British and other Europeans wanted to discourage India and Egypt from growing food crops to growing cotton, colonial administrators and capitalists cajoled farmers to switch to growing only cotton. To enforce the anti-growing-food growing, capitalists instituted trade policy against growing food, which led to the shortage of food supply. (Vikas Bajaj, NY Times).
Quiet recently in the 70s, Eugenists used laws to prohibit perceived weak citizens, primarily minorities, from having offspring. Currently, the World Bank used programs of “Structural Adjustment,” “Heavily Indebted Poor Countries,” and, or “Millennium Challenge Goals” to shift revenue away from government coffers to its portfolios. In order to generate interest income from lending, World Bank needs insolvent customers to borrow money from its loan program. Were the World Bank to institute prudent economic policies; thereby allowing poor governments to receive reasonable dividends and, or profits from their lucrative resources, it would have had to change its business to survive.
In essence, until Liberia can institute laws that do not allow big business to offer bribes, offering kickbacks to bureaucrats in exchange of sweet heart deals will continue. Consequently, our deficits will increase as well as our debts; a recipe for chaos and disruptions in the lives or both the rich and the poor.
Happy New Year!