Using independent courts and a free media

TO FIGHT CORRUPTION

 

Almost every day, reports appear in the news about government officials accused of wrongdoing. They may have sold their influence. Or they attempted to hide illegal activities. Such use of power is known as corruption. Corruption can take many forms. Corruption can describe a system that fails to operate like it should. Another example is when someone acts in an unethical way for personal gain. Consider bribery, for example. A bribe is something given to a person in a position of power for special treatment. Money, goods, or services can be given as bribes. Experts estimate that more than one thousand million dollars in bribes are paid each year.

Nepotism is another form of corruption. This happens when someone offers a job to a family member or friend instead of someone with better skills. Other forms of corruption include keeping false business records, and trading stock shares based on secret information.

Louise Shelley works for the Transnational Crime and Corruption Center at American University in Washington, D.C. Miz Shelley says corruption is a major problem in poor countries with weak economic systems. She says a rich country is not seriously affected if five or seven percent of its economy is paid in bribes. But nations that depend on a single natural resource for their earnings are more at risk. This is because a small number of people control the money earned from sales of the resource. Miz Shelley says the fight against corruption can be won with strong public and private institutions, such as independent courts and a free media. She says people who are tired of being cheated can also demand change.

Businesses can also have an influence. Corruption expert Nancy Broswell says the actions of businesses affect even the very poorest people. Miz Broswell works for a group called Transparency International. In English, the word transparency means something that a person can see through. Today the word is also used to mean an open or honest system or activities. Transparency International measures corruption rates in each country. Iceland is currently rated as the least corrupt on the group's Corruption Percentage Index. Chad is last among one hundred fifty-nine countries. Nancy Broswell says the more corrupt a country is, the more likely information is hidden from the public. She notes the failure of the American company Enron as an example of business fraud, or trickery.

In two thousand, Enron reported earnings of more than one hundred thousand million dollars. One year later, the company was in ruins. Enron employees lost jobs and the money they had invested in the company for retirement. Investors also lost thousands of millions of dollars. Enron officials were later found guilty of untruthful recordkeeping and attempting to hide hundreds of millions of dollars in debt.

Some experts say corruption in the business world is more common than many people think. Banker Wang Xuebing was once considered a leader in efforts to make China more modern. Three years ago, Wang was found guilty of accepting bribes at the Bank of China office in New York. He was sentenced to twelve years in jail and ordered to pay twenty million dollars in fines.

Kimberly Elliott wrote a book about corruption in the world economy. Miz Elliott says there is no way to estimate the true cost of corruption. But its effect on poor countries is clear. She says you see it when teachers refuse to come to school because they have not been paid.

Corruption can affect anyone. In India, for example, farmers often list the number of cows they own to receive government loans and financial aid. Some farmers fool officials about the number of cows they have. They do this by borrowing animals from other farmers. Indian officials have launched an unusual identification system to control the problem. Cows are being forced to swallow microchips that identify both the animal and its owner. The electronic devices remain permanently in the animals.

Another problem in India involves government money meant for agricultural development. Experts say some officials take this money for personal use. The World Bank estimates that sixty percent of the Indian population works in agriculture. Yet, farming represents only about twenty percent of all goods and services produced there.

Bribery is a problem in India. Transparency International says Indians paid about four thousand eight hundred million dollars in small bribes last year. The bribes were given for health care, police protection and other services. Sixty-two percent of Indians questioned say they paid a bribe. Seventy-five percent of those asked say the problem is getting worse. As a result, India has launched a new anti-corruption campaign. Lawmakers have approved a measure that makes it easier for people to receive information about government spending.

In Mexico, money from drug sales has influenced government reform efforts and the criminal justice system. Criminal justice expert Jorge Chabat says corruption there dates back to colonial rule. Mister Chabat says the illegal drug trade has only made the problem worse. He says police officials and members of the army have been corrupted. Celia Toro is a professor at the Center for International Studies at the Colegio de Mexico. She says corrupt police officers have always had a working relationship with criminals. She says powerful drug dealers have helped create a lawless part of Mexican society. Professor Toro says she believes better police officers would result from an improved legal system and a more supportive society.

International business leaders consider Hong Kong one of the least corrupt places. This was not always true. About forty years ago, Hong Kong police and government officials demanded bribes from people selling goods in the city's markets. Bribes also had to be given for public housing and even medical help. This changed after huge protests in nineteen seventy-three. At that time, a police official suspected of corruption escaped from Hong Kong. The British colonial government was forced to act. Anti-bribery laws were approved. An independent group was created to investigate corruption cases. The group said reports of corruption had dropped by more than half by the late nineteen seventies.

Corruption also is a problem in the Commonwealth of Independent States and Eastern Europe. Yet, the World Bank says the problem has been improving in twenty-six former communist countries. A World Bank report says the countries making the strongest market-based economic reforms have made the most progress. Economists say Slovakia and Estonia are success stories. Both countries have reformed their tax systems. The report says corruption is worsening in Albania and the Kyrgyz Republic. Russia, Serbia and Macedonia are also said to have made little progress. The report says many businesses there report having to pay bribes for services. It says the possibility of membership in the European Union is a powerful tool for fighting corruption. The report notes progress in the fight against corruption in Romania and Bulgaria. The countries hope to join the E.U. next year.

World Bank President Paul Wolfowitz describes corruption as the single biggest barrier to development. Mister Wolfowitz became the Bank’s President last year. Since then, he has made the fight against corruption a major goal. The World Bank has suspended or delayed loans to Chad, Bangladesh and India after corrupt activities were discovered there. Some groups say they worry that too much effort to punish corruption could stop aid from reaching those most in need. But World Bank officials say they will withdraw from projects only when dishonest officials are clearly not interested in reform.

 

SOCIAL SECURITIES

 

The Social Security system in the United States provides monthly payments to retired people and the disabled. Most of the money comes from a wage tax paid by workers and employers. For now, Social Security collects more money than it pays out. The surplus goes into a trust fund for workers who will retire in the future. But the future will have more retirees and fewer workers to support them. Last June, the Congressional Budget Office said Social Security is expected to have a deficit beginning in two thousand nineteen.

Social Security was born out of the Great Depression. Poverty spread during this period from nineteen twenty-nine to the beginning of World War Two. Many leaders spoke of creating a system to guarantee payments to the disabled and the retired. Critics called it socialism.

Some states created their own plans. President Franklin Roosevelt wanted a national system that could pay for itself. He proposed the Social Security Act in January of nineteen thirty-five. Congress passed the law that year. But payments did not start until nineteen forty. Until then, money gathered in the trust fund so the program could start with a surplus.

At first, Social Security was meant to provide a small amount of money to retired industrial workers. In time, other jobs were added. The government also offered benefits to people who survived the death of someone on Social Security. In nineteen sixty-five, President Lyndon Johnson and Congress added two programs to offer medical benefits. Medicare, for older Americans, and Medicaid, for the poor, are no longer under the Social Security Administration. In nineteen eighty-three, Social Security faced a deficit. Congress agreed to increase the retirement age and Social Security taxes. Lawmakers also required all federal workers to be in the system. These changes were meant to fix the system for seventy-five years, until around two thousand sixty.

One out of six Americans receives money from the Social Security system. Monthly payments go to retired workers and disabled people and to their survivors. Two-thirds of Americans age sixty-five and older depend on Social Security for at least half the money they get.

The system is financed mostly by a twelve-point-four percent wage tax shared by workers and employers. This year, close to fifty million people will receive more than five hundred thousand million dollars in benefits. But, in his State of the Union speech Wednesday night, President Bush said: "With each passing year, fewer workers are paying ever-higher benefits to an ever-larger number of retirees." Thirteen years from now, he said, Social Security will be paying out more than it takes in. In his words: "We must pass reforms that solve the financial problems of Social Security once and for all." His proposals face resistance, not only from opposition Democrats but also some Republicans. It is often said that politicians risk political death if they touch Social Security. Experts say any changes will probably reduce future benefits. Yet no one can even know what the population will be like years from now.

The president said the system will not change for Americans now age fifty-five or older. But he warned younger workers that Social Security would be out of money by two thousand forty-two. As he said that, Democrats in Congress shouted: "no, no, no." Mister Bush said the only solutions would be higher taxes, new borrowing or "sudden and severe cuts." He said the best way to make the system better for younger workers is through voluntary personal retirement accounts. He said the plan would permit workers to set aside four percentage points of the money they pay in Social Security taxes. The money would be invested in what he called a "conservative mix of bonds and stock funds." He said there would be ways to protect investments from sudden changes in the market before a person is about to retire.

But Democrats say younger workers could lose much of their retirement savings. A powerful group for older Americans, A.A.R.P., says it opposes any major changes. It says public opinion studies show that most Americans want Social Security to remain as it is.