Published: May 23, 2007 06:14 pm      

ROSE: On the edge of a volcano

Corruption exists in every governing body in the world. But it appears to be endemic in the poorer countries of the world, such as those in Latin America. For centuries, corruption has reigned supreme. From weak and partisan government institutions with no checks and balances, no accountability, no transparency in governance, to despots amassing large fortunes on their impoverished citizenry, along with international business deal-making and money laundering, corruption continues to be a threat to democracy in Latin America.

Corruption filters from high places to all levels of society. It is looked as a way of getting things done. Rather than studying a driver’s manual and taking the test, “buying” a license is common practice. In order not to do military service, the affluent elite obtain military cards that state and prove date of service. To supplement incomes, justice system officials often look the other way on legal violations. In some countries, university degrees can be bought and some have enriched their personal fortunes by using government resources to avoid prosecution and imprisonment. In most Latin American countries, corruption is a part of everyday life.

The Washington Post, in an article by Terrence O’Hara delineates how an international bank had been found to be criminally liable for helping a former Latin American dictator hide millions of dollars from regulatory scrutiny allowing him to launder money at will — the stake being millions of dollars in bank profits.

Oil producers like Venezuela and Mexico have amassed huge fortunes that have gone to a selected few. The oil revenues give President Hugo Chavez of Venezuela the power to wheel and deal in Latin America, largely to position himself as one of the most important players in Latin American politics. On the other hand, Mexico's Pemex, the world's fifth largest oil company, has been Mexico's economic lifeblood. It is the slush fund for Mexican politicians and cash machine for the government. According to an article in the New York Times, the company is so rotten to the core, “that to authorize a billion-dollar project at Pemex is to invite grand theft.” A chemical engineer left the company.

“It's sickening to see how something that could be so beautiful is such a mess,” he said. “To advance at Pemex, it didn't matter how good you were, your knowledge or intentions, but whether you participated in the good-old-boys system.”

This good-old-boy system is not only among the politicians, union bosses and local big businesses, but also within foreign investors. Big business lobbies facilitate trade agreements that favor corporations and governments that profit from the drive to liberalize markets and privatize natural resources. Millions of already impoverished people lose their livelihoods, hurt by unequal trade rules and their natural resources in order to enrich the wealthy. Powerful countries such as the European Union, the United States and Japan exert great influence in opening markets that more often than not relax tariffs for powerful corporations. Without proper tariffs, countries cannot levy taxes on imports and exports, cannot promote or protect local industries or local employment.

In 1977, Congress passed the Foreign Corrupt Practices Act. Why? After many investigations, the congressional members found that bribery abroad had become an important foreign policy issue that “embarrasses friendly governments, causes a decline in foreign esteem for the United States and casts suspicion on the activities of our enterprises, giving credence to our foreign opponents.”

It is curious to note, that before the Paul Wolfowitz debacle, the World Bank, Washington's economic development organization that focuses on assisting needy countries, had initiated a debate on oversees financial corruption. “What we realized was that corruption is not just a moral or ethical issue but an economic development issue,” said Daniel Kaufmann, an economist who began the World Bank's corruption studies. “We estimate that with good governance, there is a threefold increase in per capita income as funds that should be allocated toward the gross domestic product are not siphoned out.”

So with corruption from within and corruption from outside, a pattern is slowly evolving in Latin America. Sitting on the edge of a volcano, Latin America is turning left with populists who denounce global marketplace neo-liberalism. Rather than spending energies and money to slam the door shut on Hispanic immigrants, our lawmakers need farsighted thinking to reverse current trends. Trade negotiators and all major governments need to think outside the “trade negotiators box” and help stop undermining efforts to eradicate poverty and protect the global environment at the national and international level.

The European Union, the United States and Japan need to stop and review the real impacts that trade agreements have on impoverished people and biodiversity. We should enforce the Foreign Corrupt Practices Act, maybe that way we can begin to really solve the immigration exodus into our country.

Lillian Rose is a retired international consultant. She is active as vice president of the Hispanic Connection and is pastoral associate with the Hispanic Ministry of the New Albany Deanery. You can write to her at Lillian@HispanicConnectionSI.org.