http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=5&article_id=79703

Corruption: an evil Arab governments are sticking to
By Sufyan Alissa
Commentary by
Wednesday, February 21, 2007

Are economic and political reforms an effective way to combat 
corruption, or do changes such as privatizing state industries actually 
increase opportunities for corruption? There is not a single answer to 
the question, but a closer look at the types of corruption that are 
endemic in various Arab states and the nature of current reform policies 
can help explain how reform and corruption interact.

There are three main types of corruption in the Arab world. The first is 
petty corruption such as that of a policeman in a country such as Syria 
taking a bribe to forgive a traffic offence. The second is massive 
corruption, which plagues the economies of many countries in the region, 
especially in the Gulf. This type of corruption takes place during 
multi-million-dollar contract negotiations between state officials and 
business leaders to secure business deals. A good example of such 
corruption is arrangements by BAE Systems PLC, Britain's biggest and 
most influential arms company, during the Al-Yamamah arms deals in the 
1980s with Saudi Arabia. British Prime Minster Tony Blair intervened 
directly to stop a probe under the pretext of protecting British 
national interest - an example of how Western powers reinforce 
corruption in the Arab world.

The third type is political corruption, which is difficult to pin down 
but plagues the economic health of most countries in the Arab world. 
Political corruption is the use of economic deals and benefits to reward 
political allies, which invariably leads to massive diversion of public 
resources to unproductive activities. It also leads to elite resistance 
to reform programs that would level the business playing field.

The causes of corruption vary across Arab countries, but are often 
linked in one way or another to state intervention and the structure of 
economies and public sectors. In the Gulf countries, much of the 
corruption stems from the lack of transparency and procedures to 
guarantee competition in government procurement and contracts. Another 
problem is the absence of strong enforcement mechanisms for 
anti-corruption laws, which allows corrupt senior officials to escape 
any real punishment. The best example of such failure is Bahrain, which 
has useful anti-corruption laws but weak state enforcement. A similar 
problem exists in Iraq.

In the Levant and North Africa, large-scale bribery, embezzlement, and 
fraud are linked to the structure of the public sector and the nature of 
relations between the government and the economy. The Khelifa Bank case, 
the largest corruption probe in Algeria's history, involving some $2 
billion, is an excellent example of corruption in state institutions. 
Corruption in Syria, Jordan, Egypt, and Lebanon is also caused by the 
lack of proper standards of good governance, low salaries for civil 
servants, and the failure to introduce substantial institutional reform 
in the executive and legislative branches of government.

Ultimately it is the nature of reform efforts that determines whether 
they will inhibit or facilitate corruption. Thus far, many governments 
have opted for uncontroversial programs that aim to promote regime 
stability rather than transform economies or polities. Within such 
limited reforms programs one cannot expect that corruption will be 
significantly reduced; rather, corruption may increase and hinder the 
effectiveness of reforms.

Fighting corruption requires a real change in the distribution and 
disposition of institutional power to prevent the people who benefit 
from the current economic and political arrangements from using their 
political power to gain privileges at the expense of the public 
interest. As yet there is little evidence that Arab governments are 
willing to go that far.

Sufyan Alissa is an associate at the Carnegie Middle East Center in 
Beirut. This commentary is reprinted with permission from the Arab 
Reform Bulletin, Vol. 5, issue 1 (February 2007) 
www.CarnegieEndowment.org/ArabReform (c) 2007, Carnegie Endowment for 
International Peace.

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