Thursday, April 07, 2011

Angola and corruption

Calculations provided by the Washington-based anti-corruption advocacy group Global Financial Integrity (GFI) suggest funds worth nearly a sixth of Angola's entire annual budget - $6 billion US - flowed illicitly out of the country .

The bulk of the flows was channelled abroad by a mechanism known as "trade mispricing." In this case, the way it typically works is that Angolan importers pretend to pay foreigners more for imports than they actually spend. The difference provides cash that can be discreetly put into banks or other assets abroad. Oil producers seem especially susceptible to this and other kinds of corruption and capital flight. Angola is Africa's largest oil producer after Nigeria and a strategic supplier of crude to the United States. Because of the role of trade mispricing, the figures also highlight the extent of commercial graft, which exacerbates the persistent problem of capital flight and hampers the country's chances of attracting non-oil foreign investment. The GFI calculations suggest an unaccounted $5.8 billion left Angola in 2009 -$4.6 billion through trade mispricing, and the rest probably via official corruption or criminal activities traced through balance of payments data.

The secretive governing elite at the top of the ruling MPLA party has long been accused of graft on a grand scale and of plundering the oil wealth of a nation where the vast majority of its 18.5 million inhabitants live in squalor and poverty.There is a tight oligarchy around President Jose Eduardo dos Santos, who has been in that office since 1979, making him one of Africa's longest-serving leaders.

On Transparency International's latest Corruption Perceptions Index, Angola ranked 168th out of 178 countries. And though most residents of the capital are all but destitute, more than one consulting firm ranks Luanda the world's dearest destination for foreigners.

GFI estimated that in 2009 $27.5 billion flowed illicitly out of Nigeria, Africa's largest oil producer and a country with eight times Angola's 18.5 million population.

As socialists we would like to say that the existence of corruption or how much there is of it in governments is not important to the working class. What is important is why it exists and the answer is because it is an inevitable part of capitalist society. Social inequality, poverty beside riches will guarantee its continued existence.

No comments: