Aid: Anti-Corruption Measures

Baroness Stroud Excerpts

Tuesday 2nd April 2019 Grand Committee

[Baroness Stroud (Con)]

My Lords, I thank my noble friend Lord McInnes for tabling this important debate. It goes without saying that the health of a nation’s governance has a material impact on its prosperity. It is also clear from our work at the Legatum Institute—I refer to my interests as set out in the register—that the rule of law and strong institutions contribute significantly to economic growth. It should therefore not be surprising that, when hampered by corruption, a nation is not able to fulfil its true potential. According to the World Bank, the average income in countries with a high level of corruption is about a third of that in countries with a low level.

Corruption can take the form of small amounts of money—for example, a bribe to an official to speed up or approve an application—and we saw evidence of this in 2015 when 32 judges in Ghana were caught accepting money and even livestock in exchange for passing shorter sentences. It can also be the large and more systemic misuse of public or private funds. Again, we saw this in Honduras when the former director of the Honduran Social Security Institute was accused of awarding $200 million-worth of contracts to phantom companies.

If we want to see the nations and people we support through our aid budgets thrive, it is essential that anti-corruption measures are embedded and supported as part of our response to disaster relief and post-conflict reconstruction. Corruption hinders this development and rebuilding process, but the converse is also true. Eradicating corruption restabilises society, builds trust and strengthens the very institutions that support citizens. It creates an environment where entrepreneurship can flourish and people can build their own ways out of poverty, disaster zones and conflict. It also builds political trust where fragile nations can begin to build more stable Governments and even see healthy oppositions develop.

What does it take to stamp out corruption? Eradicating a practice that runs deep and, in many places, is cultural does not happen naturally. Reducing corruption takes deliberate action, supported by a combination of strong political will and credible leaders, effective institutions and cultural transformation.

The challenge is not insurmountable. Issues will be, in part, as we have heard from noble Lords, specific to the culture of each nation. However, countries can learn from the example of others where corruption has been successfully reduced. As mentioned, best practice shows us that strong leadership and a consistent message of intolerance towards breaking the law has a significant impact.

In Liberia, while there is a long way still to go, the post-war commitment of President Johnson Sirleaf to reducing corruption saw her suspending her own son, along with 46 other senior government officials, for failing to disclose his assets to Liberia’s anti-corruption officials. This is strong messaging. Can the Minister outline what steps we are taking to support those leaders of fragile nations demonstrating the greatest commitment to eradicating corruption? This material was difficult to find and what I did find was evidence of how we are protecting DfID’s budget but not of how we are driving out corruption in the nations to which we are giving money.

Just as strong and effective leadership is essential in the fight against corruption, so too is the building of effective institutions. In Hong Kong in the 1960s and 1970s, an exciting new era of growth was marred by significant widespread corruption. It was common for bribes to be required when applying for schools, housing and other public services. Even ambulance crews would ask for a bribe before collecting patients and a corrupt police force was turning a blind eye to, or even protecting, illegal activities. After increasing unrest and protest by the people, the independent commission against corruption was established. By creating an institution responsible for enforcing anti-corruption measures, Hong Kong has seen a remarkable shift and now, according to Transparency International, ranks as one of the least corrupt countries in the world. Can the Minister outline where we are supporting the building of anti-corruption institutions as a crucial part of our post-conflict strategy?

Just as strong leadership and the building of effective institutions are essential in the fight against corruption, so too is a change of culture. To create cultural transformation requires concerted effort. One of the ways in which South Korea, Estonia and Latvia have sought to achieve this is through a commitment to e-government by creating an environment of transparency where bribery is no longer feasible. It has begun to create a shift in cultural norms in public services. Can the Minister outline what steps are being taken to support the development of e-systems that contribute to a change of culture and the eradication of corruption when supporting nations recovering from conflict or natural disasters? I look forward to hearing from him shortly as he outlines how his department’s strategy is harvesting these opportunities.