Wednesday, March 5, 2008

Corruption in Politics ... Violence in the Streets

Dear Colleagues

Kenya had a close election ... rather than allowing for a professional review of the results, President Kibaki was sworn in within a short space of time, in theory, at least, leaving his opponent powerless. Almost immediately there were demonstrations all over Kenya which quite quickly became violent. Some of the violence started with the demonstrators ... some with the government authorities.

But why should an election for political office cause so much violence?

Part of the answer is that in places like Kenya, political office carries with it the keys to the national treasure. This is not what is intended ... but that is what political office has become. High office has, too much, become a source of great wealth.

And of course, part of this is the place that corruption now has in modern politics ... and how corruption has become a central part of modern economics and corporate business.

I never gave much thought to this when Jomo Kenyatta was President of Kenya. During most of his Presidency I was relatively young with little international experience. I became aware of the intersection of economics and politics much more after the oil shocks of the 1970s and the start of my international consultancies.

During some of my work I helped to develop value chains to show costs, revenues and profits at each stage of a product's flow from its creation to its consumption. Coffee ... for example ... where did the money go when farmers were being paid so little and consumers were paying so much. Or tea ... or oil ... or lumber ... or minerals ... the list goes on.

It is reported that President Moi became a substantial shareholder in more than 2,000 companies operating in Kenya. It would be interesting to know how most of these shares were acquired ... and what was the raison d'etre for these transactions. By the end of President Moi's Presidency, Kenya had earned the reputation for being one of the more corrupt regimes in Africa.

The sad thing is that corruption is good for the corrupt politician and it is good for the corrupt corporation. It is bad for the people and bad for society ... but that does not matter very much as long as the people have no power.

During the last few months in Kenya, since the election ... the people have shown through violence in the streets that it is time for change, and that corrupt governance is not good enough. Hopefully this is a message that has been heard both by the leadership elite in Kenya, and equally important, by corrupt leadership in the corporate world, in international organizations and in the corridors of power around the world.

There are, no doubt, a vast majority of people around the world who have low tolerance for corruption. Sadly, the information about transactions that are deeply corrupt rarely are visible. There are reasons why economic transactions are rarely in public view ... and none of the reasons are good. People want "transparency" ... but people rarely get it.

In Kenya ... people have shown how displeased they are. It will be interesting to see how things change!


Peter Burgess
The Tr-Ac-Net Organization

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