June 25 2004

Commentary

The OAS’ New Challenge

Por Humberto Caspa, Ph.D

Recently, representatives of the Organization of American States (OAS) gathered in an annual meeting in Quito, Ecuador. As usual, the 34 Latin and North American leaders looked after the region’s inequities, and worked toward reducing animosities between member states. Despite the barrage of issues brought to the table –border disputes, drugs, trade issues, etc.—, each representative agreed to fight back government corruption. To express their commitment over the matter, they unanimously favored an accord to deny safe havens for corrupt officials. Also, they decided to ease the extradition process to facilitate public hearings at the violators’ own court systems.

This latest OAS resolution is indeed a step forward to restrain public officials from engaging in criminal activities. Corruption, however, is deeply rooted in most Latin American government agencies. And so, any attempt at cutting it down not only ought to hold down the violators, but also ought to provide substantive remedies at the structural and particularly at the institutional level.

The OAS upfront war against corruption didn’t come to anyone’s surprise, given the pervasive nature of some governmental officials in the region, including in the United States. According to Transparency International, an agency that measures the world’s corruption perception level, most Latin American countries have corrupt systems. In its latest 2003 survey, which evaluated 133 countries, only Chile (7.1 points) and Uruguay (5.5 points) scored above the medium level. By contrast, the rest of the countries failed within the “corrupt” bracket. Haiti being the lowest of the region with 1.5 points, followed by Paraguay and Ecuador, each one with 1.6 and 2.2 points, respectively.

Although the United States ranks relatively high with 7.5 out of 10 possible points, it is below the average of most developed European nations. The 2003 data shows a drop of 1.7 points from its 9.2 best during the Clinton Administration. It is likely that the latest financial scandals, involving top-ranking officials and high-profile U.S. corporations, such as Enron, Xerox, Tyco, Global Crossing and WorldCom, took heavy toll on the credibility perception of the American people.

In addition, recent data suggests that corruption has been more prevalent in countries implementing so-called neoliberal policies. Since the 1980s, when Neoliberalism became common practice in the region, most Latin American governments engaged in privatization to further distance themselves from State regulation. Suddenly, a few public officials acquired key roles to auction out highly coveted state-owned industries. Lacking independent oversights and idle system of laws made possible the selling of the State’s assets to the first bitters, friends and families; thus, allowing the development of private monopolies in detriment of free-market competition.

Needless to say that neoliberal policies led to preferential treatments and nepotism. Public incumbents used the system to return favors to those individuals who had previously contributed with cash during their election campaigns. In Mexico, for instance, Gerardo de Provoisin, chairman of Aero Mexico and accused of embezzling $61 million dollars in company funds, had siphoned $8 million dollars into former President Zedillo’s campaign funds. In a recent scandal caught on TV, construction mogul Carlos Ahumada allegedly gave millions of dollars in cash to help local politicians retain their jobs. In return, he asked for preferential treatment during the City’s sponsored auctions, and obviously more contracts for his own construction company.

Moreover, relatives of public officials often launched successful business ventures at the expense of the State. In Bolivia, former President Gonzalo Sanchez de Lozada used his political clout to expand his family’s mining business. During his first presidential tenure, he quickly became the richest man of his country with over $75 million dollars in assets. Sanchez de Lozada lives in the Miami, Florida, under a refugee status granted by the Bush Administration. Reports show that he took about $90 million dollars out of Bolivia after a social unrest halted his second tenure in October 2003.

Like de Provoisin in Mexico and Sanchez de Lozada in Bolivia, there are other individuals whose actions have regrettably tarnished the government image. The new OAS agreement aims at making these people responsible for their actions. It is a tremendous improvement to lessen illegal activities in the government. However, the measure doesn’t go deep enough to solve problems that are intrinsically embedded within the public institutions in the region. Sometimes public officials engage in illicit actions because the system where they operate often condones unlawful behavior. So, to face such structural anomalies, governments in the region need, among other things, to open up to public scrutiny, allow independent oversight, and raise consciousness about corruption through education. Of course, it is a difficult task to fulfill but not an intangible mission to accomplish, considering that the OAS has already paved the way for government accountability.

Humberto Caspa, Ph.D., Expert on Latin American politics and economics.

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