Friday, November 27, 2009

Corruption abroad and at home

Corruption abroad and at home.
Corruption is a central topic in discussions of Afghanistan. From the American side the matter looks very simple: the Afghanis are corrupt; we are not. There is some support for that view. In the index of 180 countries compiled by Transparency International, Afghanistan is second from the bottom. The only country more corrupt is Sudan. The United States ranks 19 from the top just above Barbados and Qatar.
But recent reports from Afghanistan show that corruption in that country is much more complex.
The American and NATO troops in Afghanistan need to be supplied with everything from armored vehicles, to weapons, to toilet paper. These supplies come into the country in large convoys of trucks that often move through hostile territory where the convoys are liable to come under attack. To meet that problem a number of Afghani security companies have come into existence to protect these convoys. Some of the most important of these security companies are owned and run by, for instance,the son of the defense minister, or by cousins of the president of Afghanistan, Hamid Karzai. You need to be well-connected in order to get ahead in Afghanistan. We regard that as a form of corruption.
In the United States, in the meantime, a small uproar concerns the taxes to be paid by private equity companies and hedge funds. Private equity companies buy up existing enterprises. Sometimes they manage to improve the enterprise's efficiency and thus to enhance the viability of the firm. In many other cases, the companies bought up by private equity firms are overloaded with debt and end up going out of business while the private equity firm walks away with profits in the millions of dollars. ( This is how Mitt Romney got to be rich.) How should those profits be taxed? The current tax rate on these profits is 15%. Private equity firms are lobbying furiously against proposals to raise that tax rate. They may well succeed in this because they too are well connected. Being well-connected in Afghanistan means that you have family relations to the powerful; being well-connected in the United States means that you give money to the right legislators and bureaucrats. Getting advantages from family connections is corrupt; getting advantages from handing out campaign funds... is what?
Is it really true that the Afghanis are corrupt and we are not?
But there is more. Let us go back to the Afghani security companies that protect supply convoys for US and NATO troops. They are not well armed. They protect their convoys by bribing the Taliban not to attack. The money for these bribes comes from the US government. It is our government that pays its enemies – the Taliban – not to attack us. If Afghanistan is corrupt to the point of buying off their enemies, our government is involved in this corruption because it hires the security companies and supplies the pay-off money.
There are several lessons to be drawn from the stories. The first goes back to the New Testament: if you see a mote in the eye of the other, do not overlook the beam in your own.It is easy for a nation to be self-righteous; it is better to be as critical of oneself as one is of others. The second lesson is this: as long as we remain involved in Afghanistan we will be involved in maintaining its corrupt practices. If we want a clean government in Afghanistan, the first thing we need to do is to leave the country. If we want to have a clean government at home, the same it true: we need to leave Afghanistan.