Peter Eigen: How to Expose the Corrupt (Transcript)

Peter Eigen – TED Talk TRANSCRIPT

I am going to speak about corruption, but I would like to juxtapose two different things.

One is the large global economy, the large globalized economy, and the other one is the small, and very limited, capacity of our traditional governments and their international institutions to govern, to shape, this economy.

Because there is this asymmetry, which creates, basically, failing governance. Failing governance in many areas: in the area of corruption and the area of destruction of the environment, in the area of exploitation of women and children, in the area of climate change, in all the areas in which we really need a capacity to reintroduce the primacy of politics into the economy, which is operating in a worldwide arena.

And I think corruption, and the fight against corruption, and the impact of corruption, is probably one of the most interesting ways to illustrate what I mean with this failure of governance.

Let me talk about my own experience. I used to work as the director of the World Bank office in Nairobi for East Africa. At that time, I noticed that corruption, that grand corruption, that systematic corruption, was undermining everything we were trying to do.

And therefore, I began to not only try to protect the work of the World Bank, our own projects, our own programs against corruption, but in general, I thought, “We need a system to protect the people in this part of the world from the ravages of corruption.”

And as soon as I started this work, I received a memorandum from the World Bank, from the legal department first, in which they said, “You are not allowed to do this. You are meddling in the internal affairs of our partner countries. This is forbidden by the charter of the World Bank, so I want you to stop your doings.”

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In the meantime, I was chairing donor meetings, for instance, in which the various donors, and many of them like to be in Nairobi — it is true, it is one of the unsafest cities of the world, but they like to be there because the other cities are even less comfortable.

And in these donor meetings, I noticed that many of the worst projects — which were put forward by our clients, by the governments, by promoters, many of them representing suppliers from the North — that the worst projects were realized first.

Let me give you an example: a huge power project, $300 million, to be built smack into one of the most vulnerable, and one of the most beautiful, areas of western Kenya. And we all noticed immediately that this project had no economic benefits: It had no clients, nobody would buy the electricity there, nobody was interested in irrigation projects.

To the contrary, we knew that this project would destroy the environment: It would destroy riparian forests, which were the basis for the survival of nomadic groups, the Samburu and the Turkana in this area.

So everybody knew this is a, not a useless project, this is an absolute damaging, a terrible project — not to speak about the future indebtedness of the country for these hundreds of millions of dollars, and the siphoning off of the scarce resources of the economy from much more important activities like schools, like hospitals and so on.

And yet, we all rejected this project, none of the donors was willing to have their name connected with it, and it was the first project to be implemented. The good projects, which we as a donor community would take under our wings, they took years, you know, you had too many studies, and very often they didn’t succeed.

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But these bad projects, which were absolutely damaging — for the economy for many generations, for the environment, for thousands of families who had to be resettled — they were suddenly put together by consortia of banks, of supplier agencies, of insurance agencies — like in Germany, Hermes, and so on — and they came back very, very quickly, driven by an unholy alliance between the powerful elites in the countries there and the suppliers from the North.

Now, these suppliers were our big companies. They were the actors of this global market, which I mentioned in the beginning. They were the Siemenses of this world, coming from France, from the UK, from Japan, from Canada, from Germany, and they were systematically driven by systematic, large-scale corruption.

We are not talking about $50,000 here, or $100,000 there, or one million dollars there. No, we are talking about $10 million, $20 million on the Swiss bank accounts, on the bank accounts of Liechtenstein, of the president’s ministers, the high officials in the para-statal sectors. This was the reality which I saw, and not only one project like that: I saw, I would say, over the years I worked in Africa, I saw hundreds of projects like this.

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