This is an archived USAID document retained on this web site as a matter of public record.

Remarks of J. Brian Atwood
Global Coalition for Africa Meeting "Anti-Corruption Efforts in Africa" Washington, D.C.

October 8,1998

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Good Afternoon. I'd like to thank you for the opportunity to discuss anti-corruption efforts in Africa. I also know that I am preaching to the choir here, and that all of you understand how important this is to the future of Africa.

Certainly corruption is not only an African problem, and the recent international financial turmoil has only served to highlight how important this issue is around the world.

I would suggest that much of the financial difficulties in Asia stemmed from a lack of transparency in public institutions and in public decision-making. I would also argue that many investors, and even international financial institutions such as the World Bank, underestimated the importance of fighting corruption in maintaining long-term growth in Asia.

In places like Indonesia, there were an awful lot of people eager to look past President Suharto's nepotism, greed and autocratic tendencies when growth was booming.

These obvious manifestations of corruption were seen as ancillary issues, and people were urged not to make waves when standards of living were rising. Good government was to be a product of economic growth, not the other way around. But the last seve ral months have shown the world the fallacy of such an approach.

A corrupt system invariably leads to corrupt public decisions. Corrupt public decisions, in turn, can quickly lead to economic disaster, wholesale capital flight and major reversals in improving living standards. Africa should learn well the recent l essons of Asia or risk repeating its failures. International investors will now be reluctant to look past corruption, or see bribery as simply the cost of doing business.

Obviously, the root causes of corruption are many and USAID programming recognizes this diversity by taking a broad perspective in our efforts to promote greater transparency and accountability.

This ranges from our work on economic reform, such as reducing the opportunities for corrupt behavior; to our work on democracy building, such as strengthening civil society, the media and the rule of law; to our work on good governance.

Through USAID's Africa Trade and Investment Policy program which is part of President Clinton's Partnership for Economic Growth and Opportunity in Africa, we are supporting economic policy reform in Africa with a focus on improving commercial opportuni ties to expand Africa's trade and investment links with the United States and other trading partners.

This includes support for activities to improve the climate for investment in Africa by reducing corruption and removing regulatory barriers, strengthening ties between African business organizations and similar U.S. business organizations, and promoti ng trade between African countries and with the United States.

In other regions, USAID has taken a number of steps to promote anti-corruption efforts. Several regional bureaus are co-sponsoring anti-corruption workshops with the OECD to follow up on and broaden discussion of the OECD anti-bribery convention signed in December 1997. We co-sponsored a Latin American regional workshop in Argentina in September 1998, are co-sponsoring a Eastern European regional workshop in Turkey in October 1998, and co-sponsoring a Asia/Near East regional workshop in the Philippine s in January 1999.

In addition, we are co-sponsoring an international conference on the role of the private sector in fighting corruption to be held in Washington, D.C. in February 1999.

Through a grant with Transparency International, USAID is supporting intensive anti-corruption work in nine countries. Countries targeted in this grant are Bulgaria, Ukraine, Bangladesh, Philippines, Benin, Ghana, Mozambique, Colombia, and the Dominic an Republic.

In addition, we are consulting with the OAS and the Inter-American Development Bank on follow-up workshops to the Inter-American Convention Against Corruption and the Summit of the Americas in the Latin America region. We are working with the World Ban k on anti-corruption workshops and programs in Georgia and Albania and through the State Department's Coordinator's Office to coordinate anti-corruption efforts in Ukraine and Russia.

These are just a few examples of USAID collaborative efforts in other regions which we are prepared to extend to Africans committed to reform.

Certainly, if Africa is to attract the investment capital it so desperately needs to drive its economies forward over the long run, it must aggressively deal with corruption sooner than later.

Corruption is global in nature. We in the North are certainly not immune from corrupt practices, and we all have a responsibility to be part of the solution. However, corruption exacts a higher toll in Africa than in other regions because these econo mies can least afford the consequences.

In fact, I would suggest that corruption has contributed both directly and indirectly to the political destabilization of several African countries which has on occasion led to military takeover, internal conflict or state collapse.

I salute the Global Coalition for Africa for being a leader in promoting exchanges between African countries and with other countries such as the United States, who are committed to addressing the worldwide problem of corruption.

Let me say that my optimism about Africa was reinforced during the President's recent trip where he saw numerous examples of how Africa is in transition to a new, more prosperous 21st century.

Across the continent, significant progress has been made on economic reforms. These reform efforts have resulted in an upward trend in average growth rates for Africa as a whole since the early 1990s.

On the political side, Africa has made major progress toward expanding and consolidating democracy during this decade. The widespread increases in freedom of speech and freedom of association, competitive local elections and the growth of civil society have given more Africans greater say in their lives.

As the old saying goes, "sunlight makes the best disinfectant," and democracy is the best way to ensure corruption is limited.

At the same time, we have all watched nervously as we have been reminded how fragile progress can be. In Congo, Lesotho and in the dispute between Ethiopia and Eritrea, we have all seen that peace and prosperity are long, hard struggles. A new Africa will not be created with a snap of the fingers.

But Africa's overall progress has greatly contributed to an environment which promotes sustainable development and good governance, and facilitates the fight against corruption.

We are all aware that corruption occurs when there is opportunity and flourishes when the potential rewards are considered to be worth the risk of discovery and punishment.

In Africa, corruption prevents many countries from addressing their most serious development challenges; deters foreign and domestic investment; undermines confidence in public institutions; and exacerbates budgetary problems by depriving governments o f significant customs and tax revenues. We should also note that there is tremendous diversity within Africa in the types and levels of corruption that are present. In some countries, corrupt practices exist on a larger scale and are more systematic. In o thers, such as Botswana, levels are much lower and comparable to many of the OECD countries.

As a member of the OECD, the United States has been a key advocate of effective mechanisms to reduce corruption in Africa, working on the "supply side" to encourage major industrialized countries to criminalize the bribery of foreign public officials i n international business transactions; and on the "demand side" through multilateral organizations like the Economic Commission for Africa, the Organization of African Unity, and the Global Coalition for Africa and with support from NGOs such as Transpare ncy International, to increase knowledge about the negative effects of corruption.

Perhaps more important, Africans themselves are in the forefront of the effort to improve governance, increase transparency and accountability, and fight corruption. USAID strongly supports these African-led efforts both through our overseas programs a nd our coordination with the donor community.

African governments are well aware of the toll that corruption takes on their political and economic systems. The United States, in turn, also has many reasons for wanting to promote greater transparency and accountability in Africa.

By supporting such efforts, African countries become better partners for United States' trade and investment support. Also, one of the United States' key foreign policy interests is the promotion of democratic development in Africa and the world, and b y supporting programs to combat corruption, African governments gain greater legitimacy and are better able to promote political stability and economic development. Finally, these countries become better development partners and countries where long-term sustainable development can be achieved.

Africans are working with each other to address corruption through multinational meetings focusing on governance and corruption, to identify joint strategies and areas of cooperation. Within the past eighteen months there have been important conference s on corruption in Addis Ababa, Maputo, and Accra. These conferences have provided a forum for African leaders to develop their own innovative strategies to fight corruption, to exchange information with other countries from around the world, and to info rm the international community about the steps that they need to take to reduce corruption.

There have also been important initiatives to combat corruption in a number of countries. For example, In Botswana, the Directorate on Corruption and Economic Crime (DCEC) is a model for anti-corruption institutions with over 4,200 corruption cases rep orted to it since its inception in 1994. Of reported cases, one quarter have had completed investigations, resulting in nearly 200 cases prosecuted.

In Uganda, the constitution established an Office of the Inspector General, which has a broad mandate and specific powers to address corruption and is required to submit periodic reports to parliament. This and other measures targeted at corruption are reinforced by coordinated economic and governance reform efforts, such as elimination of government monopolies, privatization of parastatals, removal of price controls, and the depersonalization of government functions to eliminate incentives for corrupt ion by government officials.

There are numerous other examples of African initiatives to fight corruption. It is notable that these countries all recognize the need for a consistent and unambiguous effort by governments in cooperation with civil society, the business sector, and t he international community.

While we applaud these national efforts and encourage African countries to continue their fight against corruption, we invited you here today, in large measure, to think beyond your national borders.

You have recognized that the regional dimensions of corruption can no longer be ignored. Clearly, your most important partners are your neighbors. Cross-border business transactions are rife with opportunity for corruption if similar standards, codes of conduct or reciprocal arrangements are not maintained.

Eliminating the opportunity for corruption within your borders will have enormous impact, but regional cooperation will strengthen the capacity of individual countries to deal with corruption. And commitment to such measures will send strong signals t o potential foreign investors as well as your own private sector.

As you think about next steps, as I see you plan to do this afternoon, I suggest you consider addressing the problem of corruption from a regional or subregional level.

The United States would certainly support African efforts to adopt a convention or protocol, which might be modeled on the recently adopted Inter-American Convention Against Corruption.

I would also like to emphasize the partnership that must exist between Governments and civil society to ensure the effectiveness of anti-corruption efforts. Specifically, while governments focus on transparency and integrity within the bureaucracy, th ere is a critical watchdog role that civil society must play.

We are concerned that there has not been enough attention paid to this important function and therefore we have made a high priority for our assistance.

In closing, let me just say that we all know that corruption is a critical issue which requires diligent attention by both African governments and donor partners. We believe that there is evidence of progress in many countries and that there is a commi tment both by African governments and the international community to make improved governance a priority.

There is still work to be done, and USAID will continue to work with you to ensure that the successes achieved thus far are sustained and expanded. Thank you.

This is an archived USAID document retained on this web site as a matter of public record.

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