‘The King is dead, long live the King’: Principle applicable in the MENA

‘The King is dead, long live the King’: Principle applicable in the MENA


King is dead, long live the King’: Principle applicable in the MENA region. In effect, all countries of the area, be they republics or monarchies tend to abide by this principle. The consequences of such custom have had bearings throughout millennia. The recent advent of oil exports related revenues brought the limelight to shed a little light in the MENA sunny skies.

Here is one shiny one: James M. Dorsey‘s opinion on the matter.

Political transition in the Middle East and North Africa operates so far on the principle of ‘The King is dead, long live the King.’

Arab power struggles: “The King is dead, long live the King”

By James M. Dorsey Apr 27

Libya’s battle for Tripoli alongside ongoing mass anti-government demonstrations that toppled autocratic leaders of Algeria and Sudan demonstrate that both popular Arab protests that in 2011 forced four presidents out of office and the counterrevolution it provoked are alive and kicking.

Protesters in Algeria and Sudan are determined to prevent a repeat of Egypt where a United Arab Emirates and Saudi-backed military officer rolled back the achievements of their revolt to install a brutal dictatorship or of Yemen, Libya and Syria that have suffered civil wars aggravated by interference of foreign powers.

In Libya, Field Marshal Khalifa Belqasim Haftar, the UAE-Saudi-Egyptian-supported warlord, hopes that his assault on the capital Tripoli, the seat of the country’s United Nations-recognized government, will either end the conflict militarily or at the very least significantly increase his leverage in peace talks.

In all three countries, Saudi Arabia and the UAE, the two Gulf nations most determined to maintain the Middle East and North Africa’s autocratic structure at whatever cost, have sought to either bolster military resolve to remain a decisive political force or support the rise of forces that fit their agenda.

Saudi Arabia and the UAE last week pledged a US$3 billion aid package to Sudan, including a US$500 million cash injection and transfers of cheap food, fuel and medicine.

The aid package contributed to deepening divisions among the opposition that has vowed to continue street protests until full civilian rule has been achieved despite the ousting of president Omar al-Bashir, the resignation of senior military officers, including the intelligence chief, and the arrest of Mr. Al-Bashir’s brothers.

While some Sudanese demanded that the military council reject the aid, other opposition groups, including several armed factions, travelled to Abu Dhabi to discuss a UAE-Saudi backed military proposal for a military-led transition council that would include civilians.

The Saudis and Emiratis are also hoping that Taha Osman al-Hussein, who was widely viewed as one of the most influential people in Mr. Al-Bashir’s inner circle, will play a key role in safeguarding the military’s position.

Mr. Al-Hussein returned to Khartoum this month from two years in exile in the kingdom, where he served as an African affairs advisor to the Saudi court, after having been unceremoniously sacked in 2017 on suspicion that he was a Saudi intelligence asset.

Moreover, the head of Sudan’s military council, Lieutenant General Abdel Fattah Abdelrahman Burhan and his deputy, Lieutenant General Mohamed Hamdan Dagalo, a paramilitary commander known as Hemeti, developed close ties to the Gulf states in their former roles as commanders of the Sudan contingent fighting in Yemen in support of the Saudi-UAE alliance.

A commander of feared Arab militias accused of genocide in Darfur, General Dagalo is widely viewed as ambitious and power hungry. His Rapid Support Forces (RSF) are deployed across Khartoum.

Western officials privately describe General Dagalo as “potentially Sudan’s Sisi,” a reference to Egyptian general-turned-president Abdel Fattah al-Sisi who came to power in 2013 in a UAE-Saudi-supported military coup.

Mr. Al-Sisi has introduced one of the most repressive systems in recent Egyptian history. Western diplomats said General Dagalo’s ambitions virtually guaranteed that the military would not fully surrender power in any negotiated transition.

The military’s role in deposing president Hosni Mubarak as a result of a popular revolt in 2011 and subsequently restoring the military’s grip on power coupled with concern about General Dagalo inspired one of the Sudanese protesters’ chants: “It’s either victory or Egypt.”

Western and Arab diplomats also see Saudi Arabia and the UAE in the background of General Burhan’s decision not to meet with Qatari foreign minister Mohammed bin Abdulrahman al-Thani days after receiving a Saudi-UAE delegation. Sudan has since said it was working out arrangements for a Qatari visit.

Saudi Arabia and the UAE together with Egypt and Bahrain have diplomatically and economically boycotted Qatar for the past 22 months in a bid to force the Gulf state to tow their geopolitical line.

For now, Mr. Haftar’s offensive has way laid a UN-sponsored peace conference that was expected to achieve an agreement that would have ensured that Islamists would continue to be part of the Libyan power structure.

Mr. Haftar, like his regional backers, accuses the Tripoli government of being dominated by Islamists, the bete noir of the UAE, Egypt and Saudi Arabia.

On a visit to Saudi Arabia days before launching his attack on Tripoli, Mr. Haftar reportedly was promised millions of dollars in support in talks with Saudi King Salman, and his powerful son, Crown Prince Mohammed bin Salman, in defiance of a United Nations arms embargo.

The battle for Libya could prove to be Mr. Haftar’s most difficult military offensive. His Libyan National Army (LNA) already controls Libya’s second city of Benghazi and much of rest of the country where it met relatively little resistance.

The battle also serves as a warning to protesters in Sudan and Algeria whose demands for fundamental change risk upsetting the UAE, Saud Arabia and Egypt’s applecart.

With no swift victory in sight in the battle for Tripoli, Libya risks another round of protracted war that could be aggravated by the fact that it is as much a domestic fight as it is a multi-layered proxy war.

Unlike Sudan, Libya has passed the corner. Years of civil and proxy wars have devastated the country and laid the groundwork for further violence. Algeria and Sudan still have a chance of avoiding the fate of Libya, or for that matter Syria and Yemen.

As the battle in Tripoli unfolds, Libya looms large as a live example of what is at stake. Protesters are up against forces whose backers have proven that there is little they will shy away from to achieve their objectives. Libya is but the latest example.

The king’s fate is at stake in the fighting in streets of southern Tripoli. His fate hangs like a sword of Damocles in the balance in the streets of Algiers and Khartoum.

Dr James M. Dorsey is a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, an adjunct senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture.

A podcast version of this story is available on Soundcloud, ItunesSpotifyStitcherTuneInSpreakerPocket Casts and Tumblr

Advertisements
‘Get them all out!’: Algeria Three Years on after Panama Papers

‘Get them all out!’: Algeria Three Years on after Panama Papers

‘Get them all out!’: Algeria three years on after Panama Papers – and to mark World Press Freedom Day, Lyas Hallas, Algerian journalist – a member of ICIJ elaborates on the current situation of Algeria.

To celebrate the third anniversary of the Panama Papers – and to mark World Press Freedom Day – we’re speaking with reporters from around the world about the investigation each week.

For our final instalment, we spoke with the International Consortium of Investigative Journalists’ member Lyas Hallas. Lyas was the sole reporter to work on the Panama Papers investigation in Algeria, Africa’s largest country.

Like many of our partners, Lyas’ work is still having an impact. Most recently, authorities arrested some wealthy Algerians named in the Panama Papers and street protesters calling for the president’s resignation and an end to corruption waved banners that featured the businessmen’s faces.

THREE YEARS ON

‘Get them all out!’ The Panama Papers connections to Algeria’s latest revolution

Published on May 2, 2019, Reporting by Will Fitzgibbon

What was the biggest impact in Algeria after the Panama Papers’ revelations?

There was an immediate debate about assets held by Algerians overseas. The reaction shook the leaders of our country who had planned their retirements abroad. The Panama Papers also hit hard the businessmen who consort with politicians and who enjoy tax and banking advantages at home and yet who hide their money offshore. The revelations politically weakened ministers who were at the height of their power and others who were on the cusp of bouncing back.

One example was the then Industry Minister Abdesselam Bouchouareb, who was tipped to be the next prime minister before that became awkward due to the global firestorm in the wake of the investigation

Maybe my work contributed to bringing attention to the pillage of the country’s resources. – Lyas Hallas

What was your favorite moment of the Panama Papers investigation? What surprised you the most?

Favorite moment? A huge ‘catch’ when just one minute after I opened the Panama Papers database for the first time, I found Rym Sellal, the daughter of the then prime minister, Abdelmalek Sellal. It was very motivating.

I also didn’t expect to find the owner of an offshore company linked to the entourage of former energy minister Chakib Khelil who is at the heart of the SONATRACH corruption scandal, our state-owned oil and gas company.

Italy and Algeria had opened court cases and Italian judges had identified this offshore company as one of 17 used to launder $216.92 million (€194 million) in bribes. Yet neither Italy nor Algeria had called on Khelil as a witness. Ditto for the son of the former SONATRACH CEO who received six years in prison for corruption.

What also stuck with me about the Panama Papers is the interest of Algerians in this kind of story.  In two years, I published a dozen stories and there was a buzz every time. During the recent protests in Algeria, citizens took to the streets waving images of some of the people featured in his Panama Papers reporting. Lyas Hallas

What were the most significant reactions to your investigations?

The general public reacted well, which was satisfying… In Switzerland, a criminal court dismissed a case brought by an Algerian businessman based, in part, on my Panama Papers reporting.

I had to resign from the newspaper where I worked in order to get my investigation published. I had a story on the Minister of Industry at the time, Abdeslam Bouchouareb.

Bouchouareb put a bit of pressure on the editor – I don’t know what they said. Five days before the agreed publication date with ICIJ, I had to find another newspaper to publish my story… I found one easily, which was good.

I was harassed online by various digital players in the pay of government officials.

Some people said I was dancing to the tune of foreigners and others accused me of faking documents. Khelil wrote on Facebook, without naming me directly, that I was a “Zionist agent.” Obviously, I didn’t react to this kind of nonsense, which was mostly anonymous.

Some people even called me an “agent of Rebrab” [editor’s note: Issad Rebrab, Algeria’s richest man]. I had worked for 11 months in a newspaper where he is the majority shareholder and from which I resigned to publish my Panama Papers story. Yet Rebrab tried to sue me in France because of the Panama Papers.

For someone who has not followed anything, what has happened in Algeria now?

President Abdelaziz Bouteflika’s desire to seek a fifth term sparked massive demonstrations on February 22 that forced him to resign. Algerians have long lived through his power grab as a great collective humiliation. Bouteflika did leave, but the system that he built — even if it’s weakened — is still in place.

Every Friday during the protests, millions of people rallied in unity around the theme “Get them all out!” The term “all” referred to those widely-despised figures from the Bouteflika era who, in the eyes of the demonstrators, embodied mediocrity, injustice and corruption.

What’s the connection between your Panama Papers investigations and recent events?

It’s not my job to spark protests. Maybe my work contributed to bringing attention to the pillage of the country’s resources and to the lack of some people’s “tax patriotism.” Or maybe it accentuated the feeling of injustice among many Algerians given the impunity of some people I wrote about.

During the recent protests, one of the main slogans was “You have devoured the country, band of looters!” Some protest banners included photos of politicians and businessmen I exposed.

In response to the demonstrations, authorities jailed some of these businessmen, including Issab Rebrab, in order to calm protestors and temper the country’s anger. A few days ago, the Supreme Court reopened a case involving Khelil. They are not being investigated for what I wrote about, but for similar practices to the things I uncovered.

Can you give us a summary of your investigations around these recently arrested men?

Businessman Ali Haddad, and as I mentioned earlier Issad Rebrab, have been arrested.

My investigation of Haddad revealed the illicit transfer of foreign currency through a complex arrangement involving foreign partners in the group of companies that carries out infrastructure projects in Algeria. Anti-corruption investigations against Haddad have not yet been concluded, but he was arrested at the borders with Tunisia while trying to flee.

As for Issad Rebrab, he was detained on charges of “misrepresentation of illicit transfers of capital from and to foreign countries, overcharging of imported equipment and importation of second-hand equipment while he had benefited from customs, tax and banking benefits”. My investigation questioned his background and the origin of his fortune. Policy makers have always made it easy for businessmen close to them to access credit, import licenses and government contracts, while guaranteeing them impunity since for business in Algeria, political support is needed.

The Supreme Court has reopened the case of Chakib Khelil, who has fled the country.  Khelil is accused of bribery in a case involving contracts awarded by the state-owned oil company. My investigation revealed that his wife and his son were beneficiaries of offshore companies linked to a money laundering machine worth $220 million (€197 million) in commissions.

You are a veteran of journalism in Algeria. In what state was investigative journalism in Algeria before these demonstrations?

Investigative journalism in Algeria is fragile. It’s difficult to access information and Algerian media remains fundamentally based on opinion.

Even if Algerian media has some freedom in what it says, it doesn’t invest enough in going after real information. It’s subject to the government’s agenda and corporations’ marketing strategies. I would even say that it’s in a pretty sick state because it hasn’t evolved independently of the political forces now being protested against.

Algerian media didn’t develop an economic model based on its relationship with the audience that would have allowed financial independence. Advertising revenue has made the media dependent on advertisers and policymakers.

In short, much of the press is completely discredited. Especially given that the media itself was not untouched by corruption.

Algerians today are demanding a new kind of information and the current media are having a hard time satisfying this demand. Of course, there are small islands of resistance that try to offer quality information. But, it’s necessary to completely rebuild the system.

What is your hope for Algerian journalism after these protests and regime change?

I remain optimistic. The entire community of Algerian journalists is aware of the stakes. I hope that we will have the collective intelligence to set new rules of the game; rules that will establish healthy competition and favor new editorial practices to properly inform Algerians.

I don’t dismiss the value of Algeria’s press in the past, which emerged from struggles that saw journalists sacrifice their lives from generation to generation to be able to freely exercise their profession, especially in the 1990s, a decade in which terrorism had wreaked havoc on Algeria. We lost a hundred journalists and others who were murdered because they were journalists.

But the media system as a whole requires a re-foundation to clarify the ground rules. The opacity that Algeria’s media has evolved into exposes it to arbitrariness.

Sudan’s military rulers to hand over power to a civilian authority

Sudan’s military rulers to hand over power to a civilian authority

The African Union (AU) has ordered Sudan’s military rulers to hand over power to a civilian authority or face suspension within 60 days.

Could the AU come up with the same order towards Algeria, since it is increasingly obvious that the prevalent situation is of the same character.

To put one into the picture, Zoe Marks, Erica Chenoweth, and Jide Okeke wrote in a Foreign Affairs‘ article titled People Power Is Rising in Africa the following:

A new tide of people power is rising in Africa. On April 2, a nonviolent resistance movement in Algeria succeeded in pressuring Abdelaziz Bouteflika to resign after 20 years as president. Nine days later, protesters in Sudan were celebrating the ouster of Omar al-Bashir, Sudan’s president of 30 years, after a three-month-long uprising against his regime.

The nonviolent overthrows of Bouteflika and Bashir are not aberrations. They reflect a surprising trend across the continent: despite common perceptions of Africa as wracked by violence and conflict, since 2000, most rebellions there have been unarmed and peaceful. Over the past decade, mass uprisings in Africa have accounted for one in three of the nonviolent campaigns aiming to topple dictatorships around the world. Africa has seen 25 new, nonviolent mass movements—almost twice as many as Asia, the next most active region with 16.

The AU demands Sudan Military rulers hand over power to civilian authority

By thespecimennews on May 2, 2019

The AU said it noted “with deep regret” that the military had not stepped aside and handed power to civilians within a 15-day period set by the AU last month.

The bloc also reiterated “its conviction that a military-led transition in Sudan will be totally unacceptable and contrary to the will and legitimate aspirations, to democratic institutions and processes, as well as respect for human rights and freedoms of the Sudanese people”.

The military assumed power in Sudan after toppling the country’s long-time ruler Omar al-Bashir following months of anti-government protests.

It promised to hold elections within two years but protesters have rejected that and remained on the streets of the capital, Khartoum, demanding immediate civilian rule. 

The council, led by General Abdul Fattah al-Burhan, has been negotiating with protest leaders on the formation of a new transitional government. But the two sides are divided over the role of the military, which is dominated by al-Bashir appointees. 

Social Media’s giant platforms current impact on the MENA’s youth

Social Media’s giant platforms current impact on the MENA’s youth

A review-analysis of the Social Media’s giant platforms current impact on the MENA’s youth by Damian Radcliffe and Payton Bruni was posted on Journalism.co.uk yesterday 15 April 2019.

The most recent manifestation of their widespread use could be assessed as resulting in amongst many things, the calm and easy dethroning of two of North Africa’s long-endured head of states. Their current and discrete assignments appear to be concerned with the complete disposal of the out-dated support systems. One thing is sure in that without these Social Media’s deep penetrations in the region, none of this youthful regeneration could be obtained or at least at such low price.

What is the most popular channel in Saudi Arabia and how many young people still use Facebook? Here are some key facts about one of the most youthful regions on the planet

Social media in the Middle East: five trends journalists need to know about

By: Damian Radcliffe and Payton Bruni

darcey-beau-1265447-unsplash.jpg

Credit: Photo by Darcey Beau on Unsplash

This article is authored by Damian Radcliffe, the Carolyn S. Chambers professor of journalism at the University of Oregon and Payton Bruni, a journalism student at the University of Oregon’s School of Journalism and Communication, who is also minoring in Arabic Studies.

The Middle East is a large, diverse, region. The fact that one-third of the population is below the age of 15 years, and a further one in five of the population is aged 15-24 years old, means that the Middle East and North Africa (MENA) is one of the most youthful regions on the planet.

Since the Arab Spring, there has been increased interest in the role that media, and in particular social media, plays in the region. Our recent report, State of Social Media, Middle East: 2018 explored this topic in depth. Here we outline the implications our research has for journalists.

News consumption for Arab youth is social media-led

“Like their peers in the West, young Arabs today are digital natives,” said Sunil John, founder and CEO of ASDA’A Burson-Marsteller, which produces the annual Arab youth survey.

“Young Arabs are now getting their news first on social media, not television. This year, our survey reveals almost two thirds (63 per cent) of young Arabs say they look first to Facebook and Twitter for news. Three years ago, that was just a quarter.”

YouTube is huge. And growing

The number of YouTube channels in MENA has risen by 160 per cent in the past three years. More than 200 YouTube channels in the region have over one million subscribers. Over 30,000 channels have more than 10,000 subscribers.

In 2017, the 16 nation Arab youth survey also reported that YouTube is viewed daily by half of young Arabs.

To encourage further growth of the network, Google opened a YouTube Space at Dubai’s Studio City in March 2018, the tenth such hub to be opened by YouTube around the globe.

According to Arabian Business, content creators with more than 10,000 YouTube subscribers enjoy “free access to audio, visual and editing equipment, as well as training programmes, workshops and courses. Those with more than 1,000 subscribers will have access to workshops and events hosted at the space.”

In most countries, Facebook has yet to falter

The social network now has 164 million active monthly users in the Arab world. This is up from 56 million Facebook users just five years earlier.

Interestingly, in contrast to many other markets, 61 per cent of Arab youth say they use Facebook more frequently than a year ago, suggesting the network is still growing.

Egypt, the most populous nation in the region with a population of over 100 million, remains the biggest national market for Facebook in the region, with 24 million daily users and nearly 37 million monthly mobile users.

Saudi Arabia is a social media pioneer

“In 2018, YouTube upstaged long-time leader Facebook to become the most popular social media platform in Saudi Arabia,” reported Global Media Insight, a Dubai based digital interactive agency.

Data shared by the agency showed YouTube has 23.62 million active users, in the country, with Facebook coming in second with 21.95 million users.

Alongside this, although there are about 12 million daily users of Snapchat in the Gulf region (an area comprising Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman) a staggering 9 million of these are in Saudi Arabia (compared to 1 million in UAE).

A complicated relationship with platforms

Despite YouTube’s wide popularity in the MENA region, the company faced some pushback in the past year, after the network was accused of removing online evidence of Syrian chemical attacks.

Meanwhile, YouTube suspended accounts belonging to Syria’s public international news organisation (SANA,) the Ministry of Defence, and the Syrian Presidency “after a report claimed the channels were violating US sanctions and generating revenue from ads,” Al Jazeera reported.

More generally, social networks have a complicated relationship with the region, with service blocks, or the banning of certain features (such as video calling) being relatively common place, and both news organisations and individuals, can fall foul of greater levels of government oversight.

Derogatory posts have resulted in deportations of residents from UAE, while in 2018, the Egyptian government passed legislation categorising social media accounts with more than 5,000 followers as media outlets, thereby exposing them to monitoring by the authorities.

To find out more, download the full study State of Social Media, Middle East: 2018 from the University of Oregon Scholars’ Bank, or view it online via ScribdSlideShareResearchGate and Academia.Edu.

MENA region hosts the world’s elite today

MENA region hosts the world’s elite today

As per the World Bank in its latest announcement, “Growth has picked up across the region and is projected to strengthen over the next few years. And almost all MENA countries have moved to reduce or eliminate energy subsidies, identify new sources of non-oil revenues, and expand social safety nets to shield the poor from adverse effects of change.”

Meanwhile the World Economic Forum informs that the MENA region hosts the world’s elite today and tomorrow by the Dead Sea shore, to try and debate some of the region’s current issues. Jordan has already held the WEF’S gathering in the recent past; refer to MENA-Forum.

5 key challenges facing the MENA region ahead of our global summit

ByMirek Dusek, Deputy Head of the Centre for Geopolitical and Regional Affairs, Member of the Executive Committee, World Economic Forum

The sun rises on the first day of Eid al-Fitr in Amman August 19, 2012. Eid-al-Fitr marks the end of Ramadan, the holiest month on the Islamic calendar.  REUTERS/Muhammad Hamed (JORDAN - Tags: CITYSPACE ENVIRONMENT RELIGION) - GM1E88J1APD01

For thousands of years, the Dead Sea has attracted visitors from far and wide, drawn by legends of its power to heal and rejuvenate. On 6-7 April, 1,000 key leaders from government, business and civil society will gather on its shores for the World Economic Forum on the Middle East and North Africa (MENA). Over two days they will confront the issues facing more than 400 million people.

A region of two opposing systems

The Arab world is a region of two contrasting systems. One system features a dynamic private sector, digitally native youth and open economies. The other has a bloated public sector and closed, controlled economies.

Most people in the Middle East and North Africa (MENA) interact with both systems, facing a mixed reality. Wealth sits side-by-side with poverty; an exciting entrepreneurial culture struggles with leaden bureaucracy; and an insatiable appetite for the new is balanced with a reverence for tradition.

How these two systems interact – and whether the dynamic, forward-looking system can thrive while respecting the traditions of the Arab world – is among the most important issues the region is facing today.

Five key questions

The following five areas will determine whether the Arab world can successfully move towards the system of innovation and competitiveness.

1. Can the Arab world develop a new, sustainable economic and social framework?

The social contract in much of the Arab world has relied on state-provided employment. This is unsustainable. Nearly half the population is under 25, and a quarter of those are unemployed. Add the biggest gender gap in the world, and it’s clear a new framework is needed.

2. Can a mechanism for conflict resolution be developed?

Ongoing humanitarian disasters in Syria, Yemen and Iraq require immediate attention, as do the longer-term projects of rebuilding fully functioning states. The region has been home to long-standing tensions, and unless these are mitigated, a thriving, competitive region will be hard to realise.

3. Can an ecosystem of entrepreneurship and innovation be developed?

The stories of individual success in the region are too often ones of thriving despite the economic framework. An ecosystem that nurtures innovation and encourages firms to flourish and grow is needed.

4. Are countries prepared for the Fourth Industrial Revolution?

Changes in the way we work are happening more quickly than most societies are prepared for. There is a short window for establishing the right regulatory environment, and reskilling people to make sure they – and the larger economies – can capture the opportunities of technology.

5. Will addressing corruption and transparency be a priority?

Governance reform is a “must do” issue in the region and disillusionment caused by perceptions of corruption is particularly strong among young Arabs.

Global questions, Arab answers

While other regions have grappled with similar questions, the Arab world needs Arab solutions, that capitalize on the unique strengths of the area while accounting for its important sensibilities. There are good examples of this starting to happen.

The UAE is playing a leading role in integrating the region into the global economy. The new Emirates Centre for the Fourth Industrial Revolution, run by the Dubai Future Foundation in partnership with the World Economic Forum, is working to shape governance and capacity issues in the MENA, and it could shape data protocols across the world as a whole. Europe is enforcing strict data protections and regulations, while the United States is taking a more liberal approach. The Arab solution being developed may not just be a better fit for the region, but for elsewhere as well.

Saudi Arabia already has an influential voice as part of the G20, and it’s a voice that can grow. In 2020, it will host the Riyadh Summit, presenting an opportunity for greater impact on the regional and global agenda. A forward-looking programme that strengthens the MENA economies and the global economy as a whole will be an important step toward long-term success for the area.

Actions not words

There is a dire need for a new collaborative platform that brings governments together with businesses and other stakeholders in private-public cooperation. This is the aim of the World Economic Forum’s summit in Jordan. By convening members of the public and private sectors, and bringing new voices into the arena, such as the 100 Arab Start-ups, we hope to facilitate forward-leaning dialogue that understands and respects the values and culture of the region.

Tackling corruption in government could save $1 trillion

Tackling corruption in government could save $1 trillion

The International Monetary Fund (IMF), keeps on pressing on all economic and policy issues of the day in every country. Doing so for all these years, it has, in the end, amassed such knowledge and experience that enabled it to have a worldwide view of the latest trends. Tackling corruption in government could save $1 trillion in taxes, but not only that as we were recently told, it could also resolve many of the plethora of all related issues throughout all regions in the developing and developed world alike. A point in case is elaborated on this particular article that is republished here for its obvious importance, especially for those developing countries of the MENA region. 

Tackling Corruption in Government

By Vitor Gaspar, Paolo Mauro and Paulo Medas

No country is immune to corruption. The abuse of public office for private gain erodes people’s trust in government and institutions, makes public policies less effective and fair, and siphons taxpayers’ money away from schools, roads, and hospitals.

While the wasted money is important, the cost is about much more. Corruption corrodes the government’s ability to help grow the economy in a way that benefits all citizens.

But the political will to build strong and transparent institutions can turn the tide against corruption. In our new Fiscal Monitor, we shine a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption.

Political will can turn the tide against corruption.

Corruption helps evade taxes

We analyze more than 180 countries and find that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.

We show that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption.

A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP.


Corruption also prevents people from benefiting fully from the wealth created by their country’s natural resources. Because the exploration of oil or mining generates huge profits, it creates strong incentives for corruption. Our research shows that resource-rich countries, on average, have weaker institutions and higher corruption.

Corruption wastes taxpayers’ money

The Fiscal Monitor shows that countries with lower levels of perceived corruption have significantly less waste in public investment projects. We estimate that the most corrupt emerging market economies waste twice as much money as the least corrupt ones.

Governments waste taxpayers’ money when they spend it on cost overruns due to kickbacks or bid rigging in public procurement. So, when a country is less corrupt, it invests money more efficiently and fairly.

Corruption also distorts government priorities. For example, among low-income countries, the share of the budget dedicated to education and health is one-third lower in more corrupt countries. It also impacts the effectiveness of social spending. In more corrupt countries school-age students have lower test scores.

Corruption is also a problem in state-owned enterprises, such as some countries’ oil companies, and public utilities like electric and water companies. Our analysis suggests that these enterprises are less efficient in countries with high levels of corruption.

Where there is political will, there is a way

Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector.

Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption:

Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations.

Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency.

Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top.

Keep pace with new challenges as technology and opportunities for wrongdoing evolve. Focus on areas of higher risk—such as procurement, revenue administration, and management of natural resources—as well as effective internal controls. In Chile and Korea, for example, electronic procurement systems have been powerful tools to curtail corruption by promoting transparency and improving competition.

More cooperation to fight corruption. Countries can also join efforts to make it harder for corruption to cross borders. For example, more than 40 countries have already made it a crime for their companies to pay bribes to gain business abroad under the OECD anti-corruption convention. Countries can also aggressively pursue anti–money laundering activities and reduce transnational opportunities to hide corrupt money in opaque financial centers.

Curbing corruption is a challenge that requires persevering on many fronts, but one that pays huge dividends. It starts with political will, continuously strengthening institutions to promote integrity and accountability, and global cooperation.

Watch a conversation with the authors:

Related links:
Shining a Bright Light into the Dark Corners of Weak Governance and Corruption
Corruption Disruption
Corruption in Latin America: Taking Stock