From petty bribes and dishonesty at a local level to major financial and political scandals at the international level, corruption is a problem everywhere and it affects almost everything. Corruption takes on so many forms and shades that an exact definition becomes difficult.
Transparency International (TI) defines corruption as the misuse of entrusted power for private gain. Corruption in our world is so pervasive that nobody seems exempt from its curse. Nobody is fully free from the unrighteousness of corruption. But how the consequences of corruption affect the lives of the rich in comparison to the poor is like the difference between night and day.
In the UK in 2009, news broke of politicians' dubious expense claims; a scandal which shocked the public. The callous behavior of some Members of Parliament was outrageous. There was outcry against the abuse of the system by the very people elected to represent the interest of the public in parliament. But the fact of the matter remains that nobody in Britain had to go hungry or die because of the expense scandal. Sadly, corruption of a more severe nature goes on every day in many different parts of the world, and the consequence of corruption means that children sit in classrooms with no teachers to teach them and mothers wait in hospital wards with no doctors to treat them. The effects of corruption are felt and experienced in very different ways.
But corruption is not simply a problem out there where poor people live. There are many ways governments and businesses engender corruption from the West. It is no secret that corrupt dictators in Africa or Asia would find it much harder to siphon off millions of dollars of aid money without Western governments turning a blind-eye to this kind of abuse of power.
The web of corruption is interlinked and encircles the whole globe. This is one reason Micah Challenge is calling on Christians globally to take a stand against corruption.
Latest fashion in tax avoidance, December 2010
When companies and individuals seek to minimize or avoid taxes, it may not be illegal. But the loss of millions in revenue for governments means that there is less to spend on welfare, education and poverty reduction. Two recent stories from Europe show the extent of tax avoidance.
Italian designers, Dolce and Gabbana have twice been accused of tax evasion. In the latest case the sum of 100 billion (US$1.3 billion) has been mentioned and could mean a jail term if the case is prosecuted successfully.
The story has barely been reported inside Italy – D&G spend huge sums on advertising and the silence may be linked to nervousness about losing advertising revenue.
Tax avoidance is also a topic in the UK where another fashion mogul, Sir Philip Green, who owns the highly successful Topshop, BHS and Dorothy Perkins chains. He is accused by protesters of deliberately trying to avoid paying hundreds of millions of pounds of UK tax by channelling £1.2 billion (US$1.85 billion) worth of funds from his Arcadia retail empire into an offshore vehicle registered to his wife in Monaco, a tax haven.
There was a similar story five years ago when Green paid a £1.2 billion dividend to his wife, Tina, which was tax-free. The payment, though legal, was controversial and since then unease has increased after Sir Philip has become a special advisor to the Government on austerity and spending cuts.
Micro credit leads to macro profits
Microcredit was an exciting idea last century designed to make small amounts of credit available to poor people who would never normally be able to access credit. The founder of the idea, economist Muhammad Yunus, won a Nobel Peace Prize in 2006.
But in recent years venture capitalists and for-profit banks have seen the success of microfinance and seen a potential for profit.
Now interest rates of 100% are not unknown and the loan schemes are less careful about the borrowers’ ability to repay. In Mexico, average interest rates are 70%. It is estimated that about 20% of Indian borrowers have no capacity to repay.
The NY Times of November 2010 told of one widow in India, Durgamma Dappu, who took a loan from a private microfinance company so she could build a house. She had never had a regular job but was given a $200 loan. She struggled to repay this and further loans and her debt grew to $2000. She lost her tiny plot of land and fled.
Microfinance-for-profit throws up ideas about ethical business behaviour – how much profit is fair when the borrowers are poor? The microfinance industry has over $60 billion in assets, and has unquestionably outgrown its charitable roots.