Writer-economist and former ambassador to the United States Bernardo Vega takes on the exporting of corruption in his Op-Ed piece in today’s El Caribe. Vega points out that for there to be corruption there has to be two parties: Those who offer the corruption and those who accept it. He says that in the Dominican Republic, many of the cases of corruption come from international loans provided by private banks that finance goods and services that are overvalued and whose promoters bribe local officials in order to gain approval. Shooting at all of the actors, Vega says that the corruptor is the foreign supplier that hands over the bribe money, the private bank that financed the deal as well as the state agencies, such as CESDE from Spain or the Exim Bank from the US, that guarantee the loans against political risks and without whose support the deal would not go through. Vega says that the last two entities mentioned do not hand over the bribe money, but they do wink at the little transparency and large overvaluation of what is being sold. The banks want to make money and the state agencies want to promote exports for their countries.
For years now, according to the former ambassador, the European Union has had an agreement to stop this type of activity, but it has been ignored by all. In the United States there is the Foreign Corrupt Practices Act that is more efficient in its application and is the explanation as to why US companies build few public works projects in the DR. Under the DR-CAFTA agreement, the country will be obliged to hold transparent international bidding for public works and government purchases, but if the Europeans and the Brazilians give out bribes and the Americans don’t, these bids will be rigged.
In Europe, Vega says that there have been attempts to compile a “Black List” of companies that promote corruption in Latin America, and the recent ALCATEL scandal in Costa Rica is moving this forward.
The important NGO Transparency International is pushing the concept that the industrialized nations had best clean up their own houses before insisting that the Third World does the same. Another proposal from TI is how to make it more difficult for the corrupt to launder their bribes. Both the World Bank and the IDB have opened offices to insure the honest use of the monies they hand out.
There is a fear that China with its massive and efficient sales efforts in Latin America, together with its practices of bribery will make the European, American and international efforts all the harder.
Vega does have a bright light, and it is the power of the press. He calls it the best vaccine against corruption. However, he observes, it does not necessarily stop all of the wrongful activity. He cites the campaign carried out by the El Caribe newspaper in 2001 and 2002 against dozens of loans from Spain, Belgium, and the United States. More loans were approved (for helicopters, Plan Renove, and the multi-use buildings than were halted (houses for military personnel and teachers, the Livornio loan, the Jamco hospitals etc.), and it was during the administration of Hipolito Mejia that not only did the country become, for the first time in its history, a debtor to commercial banks for the purchase of military hardware, but also for the first time it negotiated corrupt loans with the US Eximbank.
See http://www.elcaribe.com.do/articulo_multimedios.aspx?id=51180…