Oz govt report blames corruption on grass roots

The Australian Department of Foreign Affairs and Trade (DFAT) in February this year, issued a country report on PNG. One of the issues addressed is corruption.

The old saying that the fish rots from the head down, is reversed by DFAT. They suggest that in PNG, the rot begins at the tail, within grass-roots communities, slowly travelling up the spine, to rot the head – senior politicians and public officials.

This is how the argument is framed by DFAT:

Corruption in PNG takes a number of forms. What outsiders call corruption may often reflect the wantok obligations of the individuals concerned. For example, virtually all politicians need to reward their supporters in material and tangible ways, ranging from providing projects to villages and districts which voted for them, to ensuring contracts are directed towards leading supporters. MPs (and candidates) are also under considerable pressure to assist their constituents pay school fees, funeral costs, bride prices and other expenses. Most PNG citizens accept such practices as being more or less consistent with their expectation of their elected representatives. Politicians who violate the basic understanding – that while they benefit from incumbency, their supporters should receive a share – are unlikely to be re-elected. These practices can create a permissive environment for much more systematic exploitation of the government system for personal benefit, with little or no pay-off for local communities.

Before we single out the Australian government, it ought to be noted other international donors, draw similar conclusions. Take the World Bank:

A particular characteristic of the traditional culture of PNG … is a system of relationships/obligations between individuals connected by common origin, hailing from common geographic area, sharing common kinship and common language … [which] can provide a strong incentive for nepotistic and corrupt practices.

Remember, these views are not inconsequential. The Australian government and World Bank are not only major donors and funders, they also have considerable influence on policy and government action.

How they have managed to see everything upside down is a question for another day. But lets put things the right way up.

First, there is no evidence to support the conclusion that a significant portion of the national population, support politicians or public officials who misappropriate large pots of public money.

Second, wantok relationships, are not a cause of corruption in PNG – this is only a superficial appearance, that disintegrates under scrutiny. Evidence from a vast range of countries, harmed by grand corruption, suggest that close-knit relationships are essential to executing corrupt schemes.

In the UK it may be the ‘old boys’ club, bonded by their time at exclusive private schools such as Eton, while in PNG similar fraternal bonds of closeness and secrecy, may come from family and regional affiliations. The point is, its not close bonds that cause corruption, rather its the other way around, those engaging in criminal activities, need closed networks cemented by trust and secrecy. Accordingly, family and friendship, often go hand in hand with corruption.

Third, while there is evidence to support the contention that extended kinship ties are drawn on by aspiring politicians to build a support base for elections, the sort of funds lost to these types of relationship are pretty slender, compared to the resources and funds looted for very different reasons.

Primarily, we see international resource operators, legal firms, construction companies, service providers, and wholesalers, enter PNG because they can earn a rate of profit far in excess of what would be warranted under ordinary market conditions.

Coupled to this, a large cohort of national politicians and business people have emerged, spread across a range of sectors, who have failed to build careers on technological innovation, efficiency improvements or creative inventions – instead, a business culture has taken hold, which devotes the powers of professional creativity to fixing markets, exploiting governance weaknesses, and scamming the taxpayer, consumers and landowners.

Foreign donors and partners have often taken a notably silent stance when it comes to this type of activity. With good reason. First, foreign nationals are frequently key players, especially Australian nationals. Second, many of the illicit gains are syphoned offshore into their jurisdictions, benefiting foreign economies, but not the country in which the wealth was generated. Third, a corrupt national elite, are an easily manipulated and controlled elite.

They will not make decisions in the national interest, instead a corrupted national elite will often sacrifice the national interest, to foreign stakeholders, if the price is right. Such leaders can also be relied on to support initiatives promoted by foreign donors, especially if they are free to vacuum up the spin-off benefits.

It is not surprising the Australian government and World Bank suggest the fish rots from the tail up, their interests lie in maintaining this fiction. Were the head to be lopped off in PNG, metaphorically speaking, the country may not be quite so easily ravaged of its wealth for the benefit of offshore jurisdictions.