Friday, 15 February 2013

Corruption slows economic growth

I searched which countries  rank highly in the:

  •  fight against corruption,
  •  innovation 
  • GDP per capita on a Purchasing Power basis ( i.e. not how much one earns but what how much one can buy with what they earn acknowledging that a hundred dollars in Zurich will buy you much less than a hundred dollars in Nairobi).

I cleaned up the GDP index from countries which are resource rich and therefore rank highly without much effort ( e.g Qatar and UAE) and small offshore centres that rank highly because of their low population and large financial centres ( e.g. Monaco, Lichtenstein and Jersey).

Three countries feature in the top ten of all three lists:
  • Singapore
  • Switzerland
  • Netherlands
Five other countries feature in the top ten of two of the selected criteria and quite highly in the third criterion but not in the top ten:

  • Finland
  • Sweden
  • Norway
  • Australia
  • Canada
In my mind there is a strong link between a low corruption index and economic growth brought about by the innovation.   This link is under-pinned by the investors' preference to base their innovation initiatives in countries that are free from corruption.

Our two main parties can offer all the goodies they wish to attract votes but the most important desire in the mind of those who understand the link between economic growth ( which is a sine qua non for delivery of many of the manifesto pledges) and a clean and transparent administration is the promise to institute serious measures to take Malta in the 21st century in so far as political governance standards are concerned.

Most important is a rock solid law to control the financing of political parties  which then has to be supported by a whistle-blowers act and the removal of legal prescription regarding corruption committed by politicians and politically appointed executives.

It is indeed indicative and shows the sharp contrast between the two main parties, that whereas PL is promising introducing the suite of governance laws as a priority in parallel with the Budget for 2013, i.e. having the transparency legislation in place in the early stages of the legislature before executive decisions start being taken,  the PN did not find it necessary even to mention such measures in their manifesto.   Having had 25 years in office without finding it necessary to introduce such legislation, the PN's promise that they will do it even though they have not mentioned it in the manifesto lacks credibility.

In this context it is shocking that Minister Austin Gatt refuses to accept political responsibility for the proven corruption that happened under his nose in the oil procurement commissions.   It is shocking that the Cabinet, in  a flagrant conflict of interest, intervenes to recommend a Presidential pardon to a key actor in the corruption scandal and reportedly omits to include the conditionality of telling the truth, the whole truth and nothing but the truth.  It is shocking that Minister Gatt participates in such Cabinet decision rather than being forced to resign.

Someone savvy used to say that justice must not only be done but must be perceived being done.

It is curious that the PN have abandoned this wise principle in their quest to defend Minister Gatt who is obviously guilty of political responsibility, at the very least.  In such circumstances who can blame people for connecting the dots and perceiving that the corruption money used to line not only private pockets but could well have found its way to funding the Party that blatantly refuses to publish its financial statements?

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