BERLIN, March 16: The reconstruction of Iraq risks turning into the world’s biggest corruption scandal, Transparency International said on Wednesday in a report focused on a worldwide problem of bribery in the building industry. “If urgent steps are not taken, Iraq will not become the shining beacon of democracy envisaged by the Bush administration, it will become the biggest corruption scandal in history,” the independent anti-graft group wrote in its annual Global Corruption Report.
The report refers to the scandal-tainted U.N. oil-for-food programme and complaints of bribery affecting almost all Iraqi government operations. It criticized the United States for its poor handling of procurement and said calls for rapid privatisation to reduce debts were misguided.
Corruption was likely to worsen as large-scale spending on building contracts and procurement got under way. Peter Eigen, Transparency chairman, urged recipients of huge reconstruction aid, notably Iraq and the countries affected by the Asian tsunami, to be as open as possible about new building projects in a bid to stamp out graft.
“In these cases, the risk of corruption is particularly high if there is no specific effort to counter it,” Mr Eigen said. Transparency wants much more rigorous systems in place for procurement, especially in Iraq, and launched a list of minimum standards for public contracting on Wednesday. However, Mr Eigen recognizes other priorities, such as security and flexibility.
“One has to be realistic. We understand the dilemmas. We are not fundamentalists,” he said. “Certain things help. If there is very high form transparency it helps. You make it open and people understand that.”
Eigen also said “generations of cronyism” in Indonesia, the worst hit tsunami country, would not be overturned at once.
CONSTRUCTION CORRUPTION: The group said surveys had repeatedly shown that corruption was most prevalent in the $3.2 trillion construction sector and plagued both the developed and developing worlds.
Transparency reckons about $400 billion is paid to support corrupt deals, but Eigen said the real cost was far higher.
“There are a plethora of white elephants or expensive and poor quality work. It has a tremendous secondary impact.” Corruption can cost lives through poor building in areas affected by natural disasters and can devastate the environment by encouraging inappropriate but lucrative projects. It also diverts money from vital health and education, Eigen said.
Transparency International’s report listed six “monuments of corruption”, including the Yacyreta hydropower project on the border of Argentina and Paraguay, environmentally suspect dams in Malaysia and Uganda and a nuclear power plant in the Philippines built on an active fault line, prone to earthquakes.
The six also included an $8 billion dam project in Lesotho, though the report said the impoverished African kingdom had won unprecedented battles against graft.—Reuters
