Analysis

Broadening the debate

In issue 156 of The Courier, we announced the launch of a programme by the European Centre for Development Policy Management on the future of KU-ACP relations beyond Lomé IV. Here, we publish an abridged text supplied by the ECDPM reporting on progress.

After 20 years, the Lomé Convention is thought by some not to have lived up to expectations and now that East West rivalry is no longer an issue, many doubt its continued relevance. Questioning, as such, is no bad thing, provided it takes place in a fair and unbiased manner and is not used as a pretext to abandon the acquis of more than 20 years of cooperation. This is the rationale behind a number of private and official initiatives to redefine KU-ACP cooperation.

Consultations

The ECDPM's post-tome IV exercise has now been up and running for more than a year. Consultations have been held in more than 20 ACP countries, involving representatives from the private and non-governmental sectors, officials in the National Authorising Offices, EC delegations, regional organisations and research centres. A number of strong impressions have emerged from these interviews. In the first place, the initial comment of many NGOs and private sector representativ was essentially 'what is in it for us ?'. This points to a lack of knowledge of the Convention in non-governmental circles and suggests that this complicated instrument is not entirely 'user-friendly'. Its government to government character was also criticised. There were calls for ACP-KU relations to be opened up to the private sector and civil society. In this context, experience with decentralised cooperation was seen as encouraging.

Second, the benefits of the Lomé trade provisions were highlighted with fears being expressed about what would happen after the year 2000. It was felt that at a time when many ACPs are undergoing structural adjustment, and the private sector is getting its act together, a clearer European commitment in this area would benefit both sides.

Various actors from the private, NGO and research communities indicated a willingness to engage in debate on redefining mutual ACP-KU interests and on the design of a new cooperation contract. Some of them had an opportunity to present their views at an ECDPM conference on the future of KU-ACP relations held on 12-14 June.

It is clear that the process of reflection is now firmly under way. At the institutional level, the Joint Assembly began as far back as February 1995, when it launched an action plan to revitalise KU-ACP cooperation. This year, it asked Senator Jean-Louis Firmin of Haiti to draw up a report on the future of the Lomé Convention. It also requested the Social Partners to tackle the issue at their next annual meeting in November 1996. On the European side, the Commission will present a Green Paper later this year while the ACPs are also studying the question. Last November, the ACP Council resolved that Heads of State should meet before the end of 1997 to agree on a joint position.

Obstacles

All this activity suggests a real awareness of what is at stake. Many obstacles have to be overcome, however, if a new type of partnership is to emerge. The main pillars of Europe's commitment to the ACP countries - aid and trade - both appear under threat. It will be necessary to redefine mutual interests - beyond the negative interdependencies - so that they can serve as a basis for a more modern and effective partnership. Greater creativity will also be required to find new forms of EU support on ACP trade issues that are compatible with World Trade Organisation obligations.

An in-depth rethink of ACP-KU cooperation will significantly benefit from inputs by actors traditionally excluded from the discussions - who are anxious to participate in redefining cooperation ties. For instance, in Namibia, NGOs called for formal consultation mechanisms for non-governmental actors. Similarly, economic operators meeting in Trinidad in November called for a new Europe-Caribbean partnership. There should also be a role for applied research conducted in ACP centres. There is already a joint research project on the future of West Africa Europe relations and similar initiatives are being formulated elsewhere.

The plea for a debate that is open to the key ACP actors should be taken on board by decision-makers and negotiators - and thus far, they have proved receptive. However, two conditions are needed to maintain this fruitful exchange. First, ACP stakeholders need to be able to base their views on full knowledge of the facts and issues. It is essential that the Convention's authors make a major effort to provide more and better information. The ECDPM is willing to play a part in this. Initiatives already under way include the development of EUFORIC - a Forum on the Internet for specialised information on European development cooperation - and the preparation of practical guides to the Lomé Convention. Enhanced access to information can help all partners move towards a real dialogue. Second, forms and channels for dialogue. need to be devised to ensure that an open debate is sustained beyond the initial reflections taking place within the EU and ACP groups.

ECDPM

'Re-compromising' development aid for the future

by Jos Jonckers

The author of this article offers an academy critique of *e challenges facing the global system of development cooperation in the post-cold War era. He argues that the old compromises that have shaped development assistance since the Second World War have broken down and pleads for a radical re-think of the strategy in order to 'enable' fess affluent societies to gain from the advent of global 'free market democracy'

Let us face it. International development early 50 years, the developed world has taken aid for granted. It no longer does. In real terms, it has started to give less. The expected 'peace dividend' has not materialised and scepticism is rising. Aid and solidarity are considered old-fashioned concepts. Progress and development, it is increasingly argued, must come from cooperation based on mutual interest and a businesslike approach.

Aid scepticism is at its highest in the USA. A conservative majority in Congress promotes radical 'winner' recipes and aid has been slashed. Slowly but surely, America is getting out of the development business. Lacking domestic support, the Clinton administration seeks to 'rescue' the country's aid programme by seeking more cooperation with other donors - particularly the KU, whose solidarity horizons do not yet stop at its own borders. But even here, horizons are shrinking. European aid to its immediate neighbours in the East and the southern Mediterranean basin has risen. Happy and prosperous neighbours suddenly seem more important than distant friends in need.

Has the end of the cold war marked the beginning of a cold world - where international solidarity is being dismantled together with the nuclear warheads ? Or could we be experiencing the beginning of a fundamental reshaping of international solidarity and aid between nations?

Beyond altruism - self interest

International aid has always involved a compromise within affluent society. People and nations are not normally disposed to give something away unless they receive something in return. Any attempt at understanding and reshaping the future of development aid must therefore start from the premise that those providing development aid do so as a result of a complex and evolving compromise between altruism and self-interest.

Affluent countries are usually only interested in assisting poorer ones when the effect is to strengthen their international leadership, and in some way to enhance their security and material wellbeing. Looked at in this context, we must recognise that development aid, whatever its altruistic aims, will only exist if it also serves the legitimate, albeit more selfish agenda of the donor. It also means that the compromise which gives aid its rationale in affluent society changes over time: aid is regularly 'recompromised'. In secure and prosperous times, donors are more inclined to forego self-interest and to cooperate in the interest of less affluent countries. In times of insecurity, the altruistic dimension is likely to diminish in importance.

In colonial times, systematic aid flows first emerged as a result of a compromise between expansionist Northern governments and Christian society with its own 'colonizing' clergy. Decolonisation had the effect of increasing insecurity in most former colonial powers. In an attempt to safeguard the capital they had 'invested' in their overseas territories, following the latter's independence, they increasingly shaped aid with a view to 'buying' goodwill from the new rulers. This process, which 'recompromised' aid from a colonial into a neocolonial form, resulted in the secular, institutionalised arrangement now known as 'bilateral aid'. In addition, during the Cold War, Western aid was used increasingly as a device to stop the Third World joining the Second World (the communist bloc). The result was an aid system which was both more internationalised and more politicised.

The next stage came with the end of the Cold War. Communism had joined colonialism and fascism in the dustbin of history. Affluent Western society had emerged as the winner. With it came the Western vision for stability, peace and progress: a world of sovereign nations, organised on the basis of democratic and capitalist market principles and committed to respect for each other's territory and for basic human rights. Today, capitalism has become the norm in most nation states. Long-time sceptics such as India, and even convinced opponents such as China and Vietnam, have embraced it. Democracy has not yet achieved the same coverage, but it is sailing forward under favourable conditions. Political pluralism is steadily being consolidated in much of East and Central Europe, while dictatorial regimes in Africa, Asia and Latin America are now the exception.

The effect of all of this has been a speedy erosion of the terms of the compromise on which development aid thrived for so long. In a rapidly globalis ing,multi-polar world, the old approaches appear increasingly redundant. From this perspective, the current aid crisis is not surprising and is not necesarily a bad thing. Western affluent society is essentially trying to come to terms with the demystification of its development aid, as part of a process of reshaping it for the future.

Three 'recompromising' strategies

As in the past, the recompromising process is influenced by both self-interest and altruism in affluent society. Three trends can be identified.. The first, which is the most idealistic, involves restoring altruism. This approach seeks to 'purge' aid of the perverse political and economic compromises and contradictions caused by decades of neocolonial and Cold-War self-interest. It has impacted on aid in several ways. First, it has given a significant boost to humanitarian aid - the most altruistic form - at the expense of development assistance. Second, it has led to a 'decentralisation' of aid - with more assistance being channelled through organisations such as NGOs, that have an 'uncompromised' altruistic profile. Third, it has led to a 'deconstruction' of development aid along idealistic-altruistic lines. 'Women in development', 'child health', 'environment'and 'poverty alleviation' are all examples of deconstructed labels around which aid is increasingly being structured and justified. Finally, it has prompted an 'intellectualisation' of development aid with the particular purpose of tightening its altruistic aims. For example, the Logical Framework Approach, the concept of 'sustainable development', the UNDP's Human Development Index and various experiments with more 'accountable' project management systems, have all essentially been devised as ways of encapsulating and supporting the altruistic intentions that lie behind aid.

The second recompromising strategy, which may be summed up in the expression be businesslike, approaches development cooperation much more skeptically. Aid, it is argued, only makes sense if it leads to real progress and development - and the prevailing view is that this is not happening. The approach is fueled by the obsession of trying to measure progress with the help of business tools such as 'output', 'impact', 'efficiency', 'rates of return' and so on. This has led to burgeoning aid 'evaluation'. It has also probably contributed to the discovery of aid failures which, in turn, has prompted growing criticism of aid agencies and operators. The businesslike strategy has gained further ground because of the failure of many countries to achieve any real progress in recent decades. Its advocates argue that the compromises which undermined aid's development impact in the past are inherently linked with its altruistic nature. The conclusion is that altruistic aid will seldom or never work. The strategy has impacted on aid in a number of ways being, for example, the major cause of so-called 'aid fatigue'. It has also prompted a search for ways to enhance cooperation for mutual benefit, indeed transforming the narrow, pre Cold War trade cooperation link with developing countries into a much broader and rapidly growing economic cooperation approach. Finally, it has sought to enhance aid's impact on the economic conditions and growth prospects of developing countries through more ambitious, structural-oriented forms of aid.

Regionalism, the third major strategy, is linked to globalisation. Rooted in human survival psychology, this approach prompts nations in close proximity to form 'strategic' coalitions. In the post-Cold War era, development aid is one of the instruments used by affluent regions to strengthen their position in a 'globalising' environment. The strategy entails promoting 'open' regionalism elsewhere in the world and capitalising on this to create linkages and interactions which enhance their own influence or hegemony. From the point of view of the international political economy, this makes perfect sense. Having succeeded in making the 'world of nations' accept capitalism and democracy, it is through the consolidation process of free market democracy in other countries and regions that powerful affluent nations will seek to gain maximum advantage.

Need for a vision

With this improved insight into the dynamics that have been reshaping development aid, is it now possible to go further and develop a more political vision of relations between affluent and less affluent nations in future ?

Free market democracy, having endured the 'crises' of decolonisation, fascism and communism, has succeeded in promoting stability and peace within and between nations. Its main strength has probably been its crucial enabling function, with an increasing number of people and nations now in a position to 'earn' a better future. It appears that the model has the capacity to generate fairly equitable growth and progress, which is presumably why more and more countries are turning to it. As is so often the case, however, the strength of the system also contains the seeds of its weakness. Conceived as an 'enabling' mechanism, it results in the categorisation of those who fail to 'be enabled' as 'unable'. Marginalised because they cannot participate and perform in the system, the excluded (whether individuals or states) are dubbed 'losers'.

They are seen as a burden and a threat by the 'winners'.

The result is disparity in society.

Experience in most affluent nations suggests that despite the enabling environment created by free market democracy, up to a quarter of the population finds itself unable to perform effectively, and is marginalised as a result. Moreover, there seems to be an upward trend in the numbers affected by unemployment, underemployment and poverty. Disparity never occurs without some cost to society, which is a good reason why it ought to be minimised. The costs come mainly in the form of internal transfers earned (but foregone) by the active, 'winning' section of society. In more sociallyinspired, free market democracies, it is accepted that marginalisation resulting from the model's shortcomings must be minimised and/or adequately compensated for. In more conservative free market democracies, exclusion is seen more as a weakness of individuals than of the system. Compensatory transfers are generally kept to a minimum to induce people to 'break out' of their situation. But while such societies may save on 'empathetic' transfers, they will generally need to spend much more of their wealth defending against threats posed by growing disparity, such as crime, drug-trafficking and political extremism.

The costs of disparity are political as well as financial. Genuine democracy is based on the participation of a representative majority of citizens. In affluent societies, however, a growing minority no longer participates. The real danger stems from the fact that this is highly skewed. It is the same, growing, marginalised minority that is 'unable' to participate which is also withdrawing from democratic involvement. The result is alienation from the political system and an erosion of democracy to the extent that its very survival may be threatened.

What is really at stake

Having conquered most of the world's nations, free market capitalism is now set to conquer the world of nations, helped by technological advances in communications, transport and computer technology. Economists have amply shown that the interdependence resulting from free international competition need not be detrimental. Indeed, because global capitalism ensures that ideas, initiatives and resources can be 'put to work' anywhere in the world - wherever they generate most profit - interdependence is usually seen as mutually beneficial. In essence, it confirms what might be called the global enabling effect of free-market capitalism. The basic thesis is that the adoption by less affluent nations of free market democracy should 'enable' many more of them to improve the lives of their people in the coming decades. The boost engendered by this 'enabling effect' will, in turn, help to sustain progress in the more affluent countries.

If this is the aim, then a new vision should progressively inspire future cooperation between the affluent and less affluent countries. The first concern should be to define 'purpose' and 'interest' much more in terms of system and process, than of output. What really matters is the 'enabling potential' of free market democracy in the specific context of the less affluent countries. How something is achieved and by whom should take precedence over what is achieved. The ultimate aim must be to ensure that free-market democracy 'takes root' in less affluent nations and is able to determine who does what and how.

A second major concern should be to maximise the 'enabling potential' of free market democracy for the most vulnerable sections of individual populations. As mentioned earlier, up to a quarter of the people in affluent societies are excluded. In poorer countries, the figure is much higher. If free market democracy fails to enable a significant proportion of this marginalised group, then it will not take root. And if the poor cannot be mobilised, the growth that does occur will be highly skewed, leading to growing disparity.

A third point is to ensure that the 'global enabling' effect of free market capitalism does not become the exclusive preserve of deregulated capital and the 'winners' who control it, leading to new forms of exploitation and disparity. The concern must be to find a way of directing the combined forces of 'capitalism without borders' and 'democracy within borders' in such a way that it leads to a genuinely better world in which the number of 'losers' is dropping and disparities are diminishing.

A historic perspective

It is useful at this stage to take a look at the history of capitalism. Freemarket democracy delivered affluence to about a third of the global population over the last century mainly because of the 'accommodation' between labour and capital in an enabling environment created by 'Fordist' mass-production and consumption. A similar accommodation is now needed to enable global free market democracy to extend material wellbeing to the remaining two thirds of the (continually growing) world population, while at the same time sustaining it among the existing affluent third. It is no longer an accommodation between capitalists and workers that is required, however, but one between the affluent and the less affluent.

Fordism basically transformed the 'interdependent' stake of capital and labour in the economic pie, into a 'joint stake' - leading to the production of a larger pie. By analogy, what is needed today is to ensure that affluent and less affluent societies develop a joint stake in the production of a larger 'global pie' as a result of new technologies and more efficient, globalised modes of production. Attracting and sustaining capitalist investment in such modes will increasingly depend on demand and consumption structures which guarantee that poorer societies share with affluent ones the benefits of such global production systems. In the same way that a larger 'mess-produced pie' was dependent on higher and more equitable mass consumption, so will a larger 'globally-produced pie' depend increasingly on higher and more equitable global consumption. In this context, the principal policy aim of development cooperation should be to ensure that growth resulting from globalisationis both enabling and disparity-reducing.

The disabling effect of

'poor' competition

Driven by the powerful motive of capital accumulation, globalisation has the tendency to promote competition. In principle, this should be a good thing, but left unchanneled, it can have negative effects. One might draw an analogy between the conquering of the global market and the spread of water during a flood. The water always takes the easiest route, entering the most vulnerable areas first where it causes the most damage. Likewise, globalization, fueled by 'deregulated' capital, often tends to promote competition where it is easiest, but where it is not necessarily beneficial. This is the case, for example, in less affluent countries, where poverty is exploited to achieve what might be dubbed a 'poor' competitive advantage - in the sense that it is based on disparity, but also in that, far from 'enabling', it may actually have the opposite effect. Child labour, sex tourism, environmentally destructive tourism, tropical forms logging, the export of industrial pollution and misuse of intellectual property are all examples of 'disabling' competition resulting from global disparity. In a rapidly globalising world this is ultimately damaging to all concerned, which is why both affluent and less affluent nations have an interest in reducing the gap.

All of this points to the need for a major redefinition of society's role in general and of aid in particular. During the colonial and Cold War periods, development cooperation was progressively uprooted and alienated from society. Serving an increasingly complex and non-transparent agenda, it became more and more a 'cockpit' affair, piloted by a small specialised crew - and it found itself flying higher and higher above society. In short, affluent society lost touch with development cooperation and aid. Occasionally, the media intervened to 're-establish contact' but the result was that development aid usually only attracted mainstream public attention when things had gone terribly wrong.

Turning vision into action

If the aim is to have affluent and less affluent society working together to ensure that the latter adopts 'free market democracy'- and can adapt it in a way which benefits both - it is vital that the former be reconnected to the business of development cooperation. The affluent must be challenged to help transform their less affluent partners, in the interested and creative manner of a minority stakeholder. They must be ready to share the wealth of knowledge and experience generated in their own process of development. Representatives of all walks of affluent life should therefore be provided with greater opportunity for dialogue and cooperation with their less affluent counterparts. Increasingly easy and cheap communications and transport should facilitate this. This new form of stakeholdership will not happen, however, unless affluent society can be imbued with the new vision.

Donors should actively support the process. Instead of spending most of their time and resources determining the scope and content of development cooperation, they should step down from their cockpit. Their new role should be as brokers and facilitators of cooperation. An initial priority must be to extol the vision itself. As this gathers momentum, they should then turn to 'brokering' it in practice - acting as a catalyst between the affluent and less affluent in order to facilitate 'enabling' cooperation between them. The development of an effective brokerage profile and methodology will probably entail important changes in the way that donors work. They need to move much closer to their constituency, and to be made democratically accountable again.

As mentioned earlier, the concept of enabling cooperation concentrates on who does what, and how. Essentially, therefore, it should be seeking to mobilise democratic and free market forces in less affluent societies. The advantage of working this way is that change and progress will be determined primarily from within the society in question - with cooperation as a source of encouragement. Such an approach also entails acceptance of the fact that the pace of progrms must be left much more to the enabling forces of the maturing democracies and free markets, however weak and imperfect these may still appear. Indeed, the central purpose of cooperation should be to help these fore" become stronger. To achieve this, cooperation will need to move away from an emphasis on engineering outputs to one which involves 'messaging' the system and process. And it is not just methodologies that need to be altered; there must also be a radical change in cooperation mentality. Thus, for example, donors should attempt to broker cooperation which is 'small but smart'. Advancing 'best practice' might be another creative way to pursue cooperation which is enabling. And while some output-related decision techniques can still be used, these must be creatively reshaped to support a more 'enabling' approach.

In conclusion, this enabling vision entails an awareness of the imperfections of free-market democracy, combined with a conviction that it offers enormous potential for the less affluent countries of the world. 'Recompromising' development aid for the future will mean reshaping it to support a process of adoption and adaptation of free market democracy in less affluent countries which is highly 'enabling'. The result should be a system of international solidarity which is working for free-market democracy, rather than as a substitute for it.

J.J.

The effects of corruption on development

by Dieter Frisch

Corruption - defined as 'the abuse of public power for personal ends' - has always existed. During recent decades, however, it has grown both in terms of geographic extent and intensity. Since the mid 1970s, it has infiltrated virtually every country in the world.

It was hoped that the easing of political and economic restrictions that characterised the 1990s after the end of the Cold War would have gone some way to reducing this phenomenon. Through increased openness resulting from political pluralism and the freedom of the press, the process of democratisation should, under normal circumstances, mobilise efforts to overcome corruption. However, emergent democracies are still fragile and seem to find the task of tackling established self interests a formidable one.

By reducing state intervention and therefore the opportunities for corruption, economic liberalisation should improve matters. In the short term, however, the opposite would appear to be true. Weakened state structures, a lack of appropriate legislation, powerlessness on the part of the judicial system to combat corruption, the pursuit of easy money - mistakenly perceived by some as being equivalent to a market economy - all these factors together contribute to aggravating the phenomenon, at least in the transitional stages. Such a state of affairs cannot fail to have some effect on those who are involved in and concerned by development issues.

Needless to say, corruption and its effects can be seen from a multitude of viewpoints. There is always the ethical angle - but how can we possibly presume to preach to countries of the South and East when bribery is just as rife in the North and when, as far as corruption within international economic relations is concerned, it is in fact, virtually by definition, the North who is the corrupter and the South and East who are the corrupted ? The only possible reply to such an argument - and one which is morally disputable even though economically valid - would be that the rich North can afford the luxury of wasting some of its wealth whereas in the case of developing countries, their sparse financial resources need to be used in the best way possible! Other lines of reasoning emphasise the distortions that corruption causes in the fair application of conditions of competition by penalising successful, yet honest, undertakings.

A major obstacle in the path of development

In my opinion, corruption should be approached from the point of view of the effects it has on development. I say this because long professional experience has taught me that corruption is one of the major obstacles to progress, and that its effects on development are disastrous.

Some people would no doubt counter this assertion with the 'cultural' argument whereby they would have us believe that, in certain cultures, corruption is quite normal and morally acceptable. Well I do not know of a single place on earth where growing rich through taking bribes is considered lawful or morally acceptable! I should like to quote Olusegun Obansanjo, former President of Nigeria, on the subject: 'In the African concept of appreciation and hospitality, a gift is a token. It is not demanded. The value is in the spirit of the giving, not the material worth. The gift is made in the open for all to see, never in secret. Where the gift is excessive, it becomes an embarrassment, and is returned. If anything, corruption has perverted the positive aspects of this age-old tradition'.

Then there are the cynics - including renowned professors - who claim that corruption oils the wheels of progress and enables development to take place. In this respect again, and putting all ethical aspects aside, it would be worthwhile distinguishing between the small baksheesh which 'helps' certain administrative procedures along ('acceleration fees') and large-scale corruption which perverts the course of de velopment. This does not of course mean that we should underestimate the destructive effects that even small-scale corruption can have on society!

Yet others have simply resigned themselves to the situation. For them, corruption is intrinsically linked to underdevelopment. As long as a person's normal income does not provide him with a decent living, the door will always be open to bribes. It is, therefore, through development that we should be attempting to eradicate corruption. Yet this argument is reminiscent of the debate on the population explosion. It is only through development, some say, that the problems of population growth will be resolved. But by then, the planet will be inexorably overpopulated! In my opinion, the same argument is just as valid as far as corruption is concerned. We simply cannot wait for it to be stamped out through development. (In any case, development is hardly a miracle cure: true, we have the examples of Singapore and Hong Kong where corruption is extremely uncommon, but we could also mention Italy, where it was precisely at the height of the country's development that corruption became the norm). We must act therefore, and without delay, focusing our efforts on eradicating large-scale corruption.

If we analyse some of the effects that corruption has on development, the first thing we notice is that it increases the cost of goods and services, and not insignificantly either. Although a 5% reduction in the profit margin might, at a pinch, be absorbed by the supplier, corruption levels of 10% to 20%, which have become commonplace, will inevitably be reflected in the price and will, consequently, be paid for through the national or foreign (in the case of foreign aid) resources of a country. It is therefore the national economy that ultimately suffers the consequences of an unjustified surcharge on the goods or services, with the difference being pocketed by some government official or politician who has abused his power for his own personal gain. Given that such operations are generally financed by bank loans or, in the case of foreign aid, by concessional loans, these surcharges inevitably bring about a proportionate increase in that country's debts. In fact it is now assumed that the exchange value of sums paid out in backhanders makes up a considerable proportion of the foreign debts of developing countries.

However, the damaging effects of such practices do not stop there. The corrupt decision-maker may well be tempted to accept a substandard quality of service which will make his personal profit all the greater. Thus, with a road building project for example, complicity between government departments and contractors may result in corner-cutting with regard to agreed standards of quality so that the savings made may be shared out between the two parties.

At their very worst, the disastrous effects of corruption mean that the conception of a project, and ultimately its very choice, are determined by corruption. As far as conception is concerned, a good example would be the purchase of a technology which is wholly unsuited to the particular needs of a country or the choice of a capital intensive project - more lucrative in terms of corruption - rather than a labour-intensive one which would nevertheless be far more beneficial to that nation's development.

The absolute peak of perversion, however, is when the very choice of priorities - and therefore of projects - is determined by corruption. What we are referring to here are those situations in which the real development priorities of a country are neglected in favour of operations which generate the greatest personal gain for the decision-makers. At this point I would like to quote Rémi Godeau, writing in Jeune Afrique: 'These currency-guzzling abortive projects have become a graveyard of white elephants. Africa is littered with vast deserted motorways which are being eroded by the Savannah, with fully functional but empty factories which have been left to fall into ruin only a few years after they were opened, with railway lines which are now impassable through a lack of maintenance, and with hydroelectric dams abandoned because they cost too much to run'. Let us pick up on the point about empty factories. These 'follies of development' are to be found in many developing countries and in Africa in particular. Some have never produced, others have failed to reach full production capacity while others still face such prohibitive costs that big state subsidies are needed to keep them going. If we follow the thread right back to the beginning we find, more often than not, that factories have been sold without ensuring real competition between suppliers. Admittedly, such projects usually have only private-sector backing (they are rarely financed through official aid), but the funding is nonetheless backed by state-controlled bodies. The existence of corruption in such cases must be more than mere presumption - what other reason could there be for making decisions which run so counter to the interests of development ? In his work 'Grand Corruption in Third World Development', George Moody-Stuart identified those areas which are especially vulnerable to corruption. These are most notably, the procurement of military and other technically sophisticated equipment, and large-scale works (in other words, any major, capital-intensive project and any scheme where objective valuation and comparison is hampered because of the technical sophistication involved).

It is worthwhile mentioning at this point that a country which borrows money to finance projects that do not satisfy its real needs, and which may indeed be considered economically futile or absurd, will see its debt burden increase - and not simply by the 10% to 20% that is used to fund 'backhanders'. The loss will ultimately be 100% if one views it in terms of the cost of the unproductive investment to the national economy. Discussions about the debts of developing countries rarely focus on the mechanisms which have produced these debts. Yet in most cases, they have become unserviceable on account of the ineffective use of overseas aid - the sort of bad management to which corruption contributes considerably.

What is more, by deflecting the sparse resources which do exist towards non-priority or low-priority areas, corruption contributes to a large extent to ensuring that fundamental needs such as food, health and education, are not met. It is therefore one of the causes of under development and of poverty in general. Needless to say, official aid is often called upon to make good the deficit left by the irresponsible management of otherwise available resources. Is it any surprise if, in the long run, public opinion in the countries of the North begins to grow weary of bridging gaps which efficient management of resources should never have allowed to appear in the first place ? How are we to convince European taxpayers that it is they who need to provide the money to fund bush clinics in countries which put their funds in prestige projects, if not directly into Swiss bank accounts?

A vicious circle that must be broken

Effectively, we find ourselves in a 'catch-22'situation. Corruption is one of the causes of under development and poverty, yet poverty is in part responsible for its continuation. If a person cannot earn an honest living for himself and his family, then he is more or less forced into earning it by less honest means. Hence corruption is both the cause and the consequence of under development. In order to break the pattern we must therefore combat large-scale corruption inasmuch as it is a significant cause of underdevelopment and we must work gradually to eradicate the reasons for its propagation in society, and in particular to remedy the notorious lack of adequate income to ensure a decent standard of living.

In general terms, we can say that corruption also kills off the spirit of development. Nothing is more destructive to a society than the pursuit of 'a fast and easy buck' which makes honest people who work hard appear naive or foolish. That is why, in the context of economic reforms under the heading of 'structural adjustment', it is vital that the model advocated be one of a market economy based on a sound framework of legislation and on an efficient state. It should not allow free rein to the sort of ruthless capitalism which is aimed at immediate profit at all costs. The example of certain transition countries in the East, where a market economy has become synonymous with the law of the jungle, the Mafia and corruption, really should make us stop and think.

In the final analysis, an economy undermined by corruption has the effect of discouraging potential foreign investors and public donors. Yet if development is to succeed, countries have to be able to attract a flow of capital. As Serge Michailof put it: 'Success attracts money. Waste, failure and chaos drive it away'. And although investors are very keen to do business, with the exception of a few opportunists, they all look for host countries that have a stable and predictable climate. Entrepreneurs have been known to withdraw from certain African countries - which are nevertheless rich in resources - because of the constraints imposed on them by corruption on a scale which they considered to be unacceptable. As for public donors, they are increasingly reluctant to offer financial aid to those countries that manage their own resources poorly. It is precisely this failing which is one of the causes of what we now refer to as 'aid fatigue'. Financial aid institutions should go as far as suspending their cooperation in blatant cases of corruption and bad management, just as they do in cases of serious violation of human rights. Conversely, 'good governance' should be the determining factor when allocating aid, and it would appear that Article 5 of the revised Lomé IV Convention does in fact foresee such an approach.

In conclusion, far from reserving the foregoing criticisms for countries of the South, I believe that the partners of the North have their part to play in the ravages wrought by corruption, be it only as a result of the inconsistencies between their development cooperation policies and their export promotion policies. Basing our assumptions on the principle that cooperation efforts are genuinely motivated by concerns for development - and I can attest that this is precisely the motivation behind the policies of the European Union, which I have served for a great many years - we should not forget that Western countries have a tendency to promote exports, by other means, without any consideration for the effects this has in terms of development. They thus contribute to the dishonest practices which we have been discussing. The fact that they tolerate, or even go as far as to encourage corruption as a means of promoting exports - restricting the application of the criminal law to acts committed on their own territory and allowing corruption to be taxdeductible under the heading of 'necessary expenses' - seems to me to be absolutely scandalous. In the AlortR too, the battle against the canker of international corruption is a formidable one. But it is a fight to which we are committed in the context of 'Transparency International' This NGO, which was created in 1993, makes its services available to any country which genuinely wishes to eradicate the scourge of corruption.

D.F.