The Next 50 years - Reduce corruption, spur growth

Published: Sunday | November 25, 2012 Comments 0

Professor Trevor Munroe, Contributor

I agree 100 per cent with the assessment of endemic corruption in Jamaica today as set out in Jamaica's National Security Policy, available online on the Ministry of National Security's website:

"... corruption in its various forms is a serious threat to the social order and the rule of law ... inhibits the ability of the State to effectively discharge its responsibilities and obligations ... political institutions and freedoms can also be affected by corruption ... through the corruption of public officials ... . through rewards but may also be coerced through direct threats.

"... penetration and weakening by criminal networks of the justice system, government and the political process could eventually lead to the demise of the State."

Lest anyone doubt the accuracy, gravity or implications of this national assessment, recall the following, illustrative of different aspects of Jamaica's corruption challenge.

David Smith, the Jamaican convicted of money laundering and other financial crimes, according to the Supreme Court of the Turks and Caicos Islands "benefited in the sum of at least US$220 million" and made "tainted gifts ... of US$5 million to the Jamaica Labour Party ... and US$2 million to the People's National Party". (TCI Supreme Court Confiscation Order, April 2012).

Despite having fleeced some 6,000 Jamaicans by his criminal conduct and despite having been raided, issued cease and desist orders by Jamaica's Financial Services Commission in March 2006, orders upheld by Jamaica's judiciary, Smith has neither been indicted nor prosecuted in Jamaica.

He is currently serving a sentence of 30 years, having been convicted in the courts of South Florida and the Turks and Caicos Islands.

Christopher Michael Coke, who pleaded guilty on September 1, 2011 in the Federal District Court in Manhattan, to racketeering conspiracy charges and was sentenced on June 8, 2012 to 23 years in prison, received 55 contracts totalling $77 million through his company, Incomparable Enterprises, from Jamaican public-sector entities between 2006 and 2010 - across successive administrations.

Some contracts were awarded subsequent to the extradition order served under the Mutual Legal Assistance Criminal Matters Act by the United States (US) in August 2009. (See Quarterly Contract Awards, Office of the Contractor General website).

Coke exercised significant autonomy in Tivoli Gardens in Western Kingston and, despite credible allegations by Jamaicans of his responsibility for serious crimes over many years, (see transcript of interview with Leader of the Opposition, Edward Seaga, The Gleaner, September 29, 1994, p23), as well as the accusations in US Federal Court documents, Coke was never indicted, tried nor convicted for any serious crimes in Jamaica.

Scamming scandal

Currently, the Jamaican lottery scam, according to the US Federal Trade Commission (FTC), has generated, in 2011, about 30,000 complaints from American citizens, scammed between US$300 million and US$1 billion per year (the high estimate by C. Steven Baker, the FTC region midwest director based in Chicago. See HUFF POST MONEY, September 7, 2012).

The scam has motivated scores of murders of Jamaican citizens by Jamaican citizens in the single parish of St James.

Yet, the public is unaware of any 'big fish' being prosecuted and incarcerated because of involvement in this corrupt transnational operation.

The scam continues to seriously damage Jamaica's good name, damages incoming investment prospects (along with associated job creation and income generation in the ICT sector) and, by compromising the money-transfer mechanism, is seriously threatening the prospects of innocent Jamaicans receiving hassle-free well needed remittances from friends and family in the United States.

These three examples (and many others could be cited) validate the National Security Policy assessment that endemic corruption threatens the rule of law, Jamaica's political institutions and "could eventually lead to the demise of the State".

The seriousness of this threat posed by corruption is also reflected in the perceptions of both Jamaicans and in the international community as a whole.

Two years ago, a Don Anderson poll revealed that the Jamaican people ranked 'too much corruption' as the second "main thing wrong with Jamaica".

The 2010 Latin American Public Opinion Project Survey saw Jamaicans second only to Trinidadians among 26 Latin American and Caribbean states in their perception of levels of corruption in their country.

Moreover, according to the 2012 UNDP Report on Citizen Security in the Caribbean, the majority of the Jamaican people believe that those who are powerful or politically connected go free in our justice system.

This perception by Jamaicans is shared by our international partners. The US State Department's 2012 International Narcotics Control Strategy Report concludes: "corruption of public officials continues to be a major concern to the Jamaican and United States governments as well as most Jamaicans.

"The law penalises official corruption; however, corruption is entrenched, widespread, and compounded by a judicial system that is poorly equipped to handle complex criminal prosecutions in a timely manner."

More widely afield, the Transparency International Annual Corruption Perception Index has never ranked Jamaica above four on a scale of one to 10, where one is most corrupt and 10 is perceived to be least corrupt.

Both the reality and perception of corruption is seriously damaging Jamaica's development.

The just released Global Competitiveness Report 2012/13 identifies 'corruption' as the third in rank of the 16 "most problematic factors for doing business in Jamaica" - ahead of 'tax rates', 'inefficient Government bureaucracy' and even 'tax regulations'.

No wonder one authoritative scholarly study estimates that the overall cost to Jamaica's GDP per capita, that is, the loss each Jamaican experiences because of inadequate control of corruption, is about US$550 per annum.

(See A. Dreher and T. Herzfeld - The economic costs of corruption: a survey and new evidence, June 2005)

What have been some of the contribution factors to this endemic corruption 50 years after Jamaica's Independence in a country that has registered so many exceptional achievements?

Just a few days ago, for example, the Global Competitiveness Report 2012/2013 confirmed Jamaica as number one in the world in terms of the control of malaria.

At independence less than 1,000 students were in university or tertiary institutions. Today, almost 70,000 students are enrolled at the tertiary level.

Over the years since Independence, Jamaica has produced world-class scientists, including Professor Anthony Chen, a co-recipient of the Nobel Peace Prize.

The country has also produced world-class public servants such as Justice Patrick Robinson, a judge of the International Criminal Court in the Hague and world-class businesses including Sandals and SuperClubs.

A Press Freedom ranking Jamaica consistently in the top 10 per cent globally, to say nothing of the well-known stellar achievements in sports, culture and entertainment are all proof of how good the country can be.

Yet whatever we would have achieved, we would have achieved and shall achieve so much more with less corruption.

What helps corruption?

Major factors contributing to this endemic corruption include the awarding of contracts big and small, jobs or positions high and low on the basis of politics rather than on merit.

The seeds of this deficiency, which evolved into full-blown tribalism, were sown in the 1940s, institutionalised in the political parties in the 1950s and became manifest, with seriously harmful development impact, in the 1960s.

'The Report of the Commission of Enquiry into the Award of Contracts, the Grant of Work Permits and Licences and Other Matters' (The DaCosta Commission Report 1973) is replete with evidence.

Had political corruption in the school-building programme (1966-1968) been controlled, there is good reason to believe that twice the number of schools may have been built.

Twenty years after the DaCosta Commission Enquiry Report, once again huge costs were incurred in Operation Pride by putting "politics first with competence, need and merit second".

Since 2006, the Special Investigation Reports of the Office of the Contractor General are replete with evidence of corruption, at the level of the Parliament, the parish councils and in public sector entities.

Yet only two successful prosecutions have emanated from more than 40 special investigation reports.

In one case involving allegations of trans-national bribery of a former member of Parliament pending since 2009, no decision has yet been announced as to prosecute or not to prosecute.

The second contributing factor has been excessive red tape and bureaucracy.

One study found that it took an average of 414 hours, that is, over 50 days to pay taxes in Jamaica, far greater than most other Caribbean states.

This has been a clear incentive for 'passing money' in order to achieve speedy and expeditious results in the grant of licences, permits, etc., as well as in the payment and the non-payment of taxes.

The third contributing factor continues to be the deterioration in the values system, whereby materialistic and individualistic 'bling values' have superseded social, communitarian and production-oriented values, not least of all because decades-long economic stagnation has reduced opportunity for those who would "work for a living".

The deteriorating values system has also elevated the attractiveness of the 'criminal lifestyle' and undermined the value of honesty, integrity, as well as the 'work ethic' in all its dimensions .

The final factor worth mentioning is the growth in autonomy of the corrupt and of organised crime groups.

The major contributory factor in this regard continues to be the absence of any meaningful legal or regulatory framework to curb the buying of influence by way of political campaign contributions and to dismantle political garrisons, including the punishment of systematic violations of human rights within these enclaves.

Potentially important anti-corruption instruments, such as the criminalisation of 'illicit enrichment' are rarely, if at all, enforced.

One overall result is the apparent impunity of the corrupt in high places, reflected in the fact that in the 10 years prior to Jamaica's Independence, three ministers were convicted of corruption, yet in the 50 years since, only one successful prosecution has taken place.

What can we do?

What has to be urgently done to rectify this 'endemic corruption'?

1 Build public awareness to the extent to which corruption is holding back progress for the ordinary Jamaican, even those whose values and conduct have become infected by corruption, and enhance public demand for decisive action.

2 Plug loopholes in the existing legislative/institutional framework by the speedy passage of Campaign Reform Legislation and the establishment of a single Anti-Corruption Agency with prosecutorial powers.

3 Build institutional capacity and reinforce 'professional will' to deal with corruption. This requires enhanced training and targeted incentives for our prosecutors, magistrates, judges, investigators, etc.

This would increase the likelihood of 'big fish' being brought to justice, thereby enhancing the credibility of the rule of law now being seriously undermined by the perception that the law only applies to the 'small man' and not to the 'big man'.

4 Reinforce political will by developing networks amongst and between persons of integrity in each of our parliamentary parties and between 'honest politicians' and civil society designed to bring to justice the corrupt on either or on neither side of the aisle.

5 Renew and strengthen a national programme, at all levels of the formal and informal educational system, including the media, to combat values from top to bottom that facilitate corruption and promote again, from top to bottom, a culture of honesty, integrity and hard work.

Finally, Jamaica's international development partners need to be challenged to be more effective in collaborating with the Jamaican public and officials in ensuring that grants and loans, (the latter increasing our debt), reach their targets to enhance the country's productive capacity and reduce poverty, and not be diverted into the pockets of the corrupt, in high and low places.

Professor Trevor Munroe is the executive director, National Integrity Action and a visiting honorary professor at the Sir Arthur Lewis Institute, UWI, Mona. Send feedback to editor@gleanerjm.com.

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