Originally published in the Informanté newspaper on Thursday, June 11, 2015.
During the tenure of President Pohamba, Namibia started a
long overdue drive to root out corruption of all forms in our government. And
with President Geingob’s declaration of assets, and his urging to Members of
Parliament and his Ministers to not only also declare assets, but divest
themselves of the responsibilities of running private businesses on the side,
this drive looks sure to continue.
But as the corruption scandal engulfing FIFA has shown,
corruption stretches far and wide. But efforts to stamp out corruption can be
effective, as even the entrenched Sepp Blatter is not protected when the probes
are deep enough.
The study of corruption in economics has a long history –
effectively grounded in the examination of what economists call ‘rent-seeking.’
Rent-seeking, in basic terms, is the expenditure of resources on activities,
political or otherwise, that aims to increase a person or organization’s share
of existing wealth instead of creating wealth.
This misuse of power, whether monetarily or based on
governmental authority, causes the economy to not function properly, according
to its natural laws. The President of the World Bank in 1996 called it the
‘cancer of corruption,’ and it certainly is an apt moniker. Corruption inhibits
the optimal allocation of resources, weakens property rights and undermines the
rule of law. It is the antithesis of democracy itself.
Worst of all, it is the poor who shoulder most of the burden
of corruption in society. An increase of only 0.78% in corruption causes a
corresponding drop of 7.8% in the income growth of the poorest 20% of the
population, according to an IMF study. This is not only as a result of
‘leakages’ of aid to the poor, but also due to the diversion of expenditure
away from critical areas such as health and education. In addition, corruption
can reduce governmental tax revenue by up to 50%, further impeding economic
development in a nation.
For a country such as Namibia with a Gini Index of 61.3 (a
quantified representation of income inequality), this is especially worrisome.
Namibia has the fourth highest income inequality in the world, and we cannot
afford such inequality to get worse. Even worse, World Bank studies revealed
the countries with a high level of corruption also have an infant mortality
rate of three times the norm of countries with a low level of corruption, and a
literacy rate that is 25% lower as well.
But what allows corruption to thrive? Trade restrictions,
government subsidies and price controls allows high-level government
corruption, along with sociological factors, with public officials being more
favourable to relatives. Low level corruption is especially rife where civil
service salaries are low compared to fines that could be levied.
While Namibia has made great strides in combatting
corruption, as a nation, we still have some way to go. With Namibia ranking 6th
in Transparency International’s Corruption Perception Index in 2014 in Sub-Saharan
Africa, we only ranked 55th internationally. And with a score of
only 49 out of 100, we still have some way to go.
And this effort will not be
wasted. The World Bank states that: “countries
that improve on control of corruption and rule of law can expect (on average),
in the long run, a four-fold increase in incomes per capita. … Similarly, such
a country could expect, on average, a 75% reduction in child mortality.”
Namibia currently has a GDP per
capita of approximately US$ 5700. If President Geingob’s measures are
implemented and effective, Namibia can have a bright future. Just imagine where
we’ll be with a GDP per capita of US$ 22 800.
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