“Our society had been a kleptocracy of the highest order, the Government doing its best to steal from the people, the average man doing his best to steal from the Government, the worst of us doing our best to steal from each other.” – Viet Thanh Nguyen
Administrator of the United States Agency for International Development (USAID), Dr. Samantha Power visited Sri Lanka recently and announced an additional US$20 million in humanitarian assistance to support the country during this severe economic crisis. The USAID press release says: “The USAID will invest the additional funds to provide emergency food and nutrition support to those most needed. This brings USAID’s total assistance to nearly US$92 million since June to support the Sri Lankan people through this crisis.
Our contributions provide meals for approximately 1.1 million school-children for 60 days and ensure that impoverished lactating mothers receive the nutritious food they need, equip farmers with agricultural assistance and cash to increase food production in vulnerable communities, distribute cash assistance to enable hundreds of thousands of crisis-affected people to immediately meet their basic needs, and support public financial management reforms to facilitate Sri Lanka’s emergence from debt.”
It goes on to say that: “The two announcements made in Sri Lanka this weekend brings the total US Government assistance to Sri Lanka to nearly US$240 million. On top of the USAID total contribution of US$92 million, there is also US$120 million from the US Development Finance Corporation”.
The press statement does not say anything about the way they are going to monitor any of these activities to make sure that the money will be used only for the intended purposes. It is hard to imagine that institutions such as USAID or IMF do not know how and why these countries, they generously help have driven their economies to ruins.
After all, USAID describes themselves as the world’s premier international development agency working to help lift lives, build communities, and advance democracy.
They also mention that their work advances US national security and economic prosperity; demonstrate American generosity; and promotes a path to recipient self-reliance and resilience.
Therefore, the receiving countries would certainly have to clearly be aware of donor expectations with respect to the donor country’s national security and economic prosperity.
Though these are not decisions made by one individual or even one entity such as USAID, it is always better to be knowledgeable about the background of these decisions and also the people who are involved in the process of making those decisions.
Dr. Power was one of the key players who were very much in favour of US military interventions in Libya, Syria and Yemen on ‘humanitarian grounds’.
Analysts say that the US actions in those countries led to further loss of lives and growth of extremism.
What do all these have to do with kleptocracy? Well, according to the Cambridge Dictionary, kleptocracy is: “a society whose leaders make themselves rich and powerful by stealing from the rest of the people”. World history shows that many countries have suffered under kleptocrats, who implement highly inefficient economic policies, expropriate the wealth of their citizens, and use the proceeds for their own consumption.
A key strategy in the kleptocratic playbook is buying off opponents. They often use the funds from foreign aid and rents from natural resources of the country for this purpose.
As a cost cutting measure in the process, kleptocrats usually break the Opposition off to several groups until none of the groups are strong enough to fight by themselves. Then they only have to buy one or two of those smaller groups to control the numbers.
Well documented examples of kleptocratic countries include the Democratic Republic of the Congo under Mobutu Sese Seko, Haiti under the Duvaliers, Liberia under Charles Taylor and the Philippines under Ferdinand Marcos.
Though most of those are authoritarian governments kleptocracy can easily be camouflaged by carefully choreographed democracies too. Kleptocrats have benefited immensely due to globalisation since they often need the support of professional intermediaries in other countries in laundering illegally acquired assets.
As the Pandora papers revealed, these types of supporting networks consist of law firms, real estate agents, art dealers and other wheelers and dealers. Kleptocrats depend heavily on the hidden financial world of ‘black money’. Modern-day kleptocrat knows that it is important to brand the image of the country by hosting international sports and cultural events and promoting ‘development narratives’ in the guise of economic growth.
They even donate money to universities, think tanks and other academic and research institutions in the efforts of shaping the perceptions about their regimes. Kleptocrats thrive within weak political structures where formal institutions neither place significant restrictions on politicians’ actions nor make them accountable to citizens.
Strong political structures allow the citizens to punish kleptocrats by voting them out of power whereas weak political structures allow politicians to punish citizens if they don’t support them. Within principled political structures citizens demand rights while the citizens in corrupt system have to beg for favours.
Kleptocracy survives when: the political opponents are shortsighted and do not give priority to the well-being of the citizens, there is more foreign aid coming into the country and average productivity in the economy is low making natural resource rents and funds from foreign aid more effective in bribing the members of political and business community.
The kleptocratic regime of the Democratic Republic of the Congo under Mobutu Sese Seko has been documented in several studies as a good example to illustrate how the ruler was able to use foreign aid to stay in power and fight off challenges.
This negative effect of foreign aid on weak Government structures and non-democracies has led such systems to even worse governance and economic conditions.
Kleptocrats have been successfully fought off with strong oppositions either within the political system or the business community.
Therefore, maintaining a weaker economy is always advantageous to the kleptocrat. If there is no such power within the country, then at least the donor agencies should establish the parametres to make sure that the funds they provide with the intention of helping the people in the country are not being diverted to the kleptocrats’ pockets.
The writer has served in the higher education sector as an academic over twenty years in the USA and fifteen years in Sri Lanka and he can be contacted at thilanh@gmail.