reflections

In Much of the World, Corruption Is Politics as Usual

5 MINS READNov 12, 2014 | 05:28 GMT
In Much of the World, Corruption Is Politics as Usual
Mexican President Enrique Pena Nieto (L) and Chinese President Xi Jinping (R) during a signing ceremony after their meeting at Beijing’s Great Hall of the People in Nov. 2014.
(JASON LEE/Getty Images)

Even as Mexican President Enrique Pena Nieto is in Beijing this week talking trade with Mexico's second-largest trading partner, he has faced scrutiny at home over his alleged role in his country's long-standing tradition of crony capitalism, a tradition by no means unique to Mexico.

In a seemingly hasty move, Pena Nieto rescinded a decision Nov. 6 selecting a Chinese-led consortium, the sole bidder for a contract, to build a high-speed rail between Queretaro and Mexico City. The reversal came just three days after the contract was announced and the same week that allegations started trickling out in Mexican media that at least one of the Mexican companies involved in the consortium, Grupo Higa, whose head is allegedly a close friend of the president, is also the owner of a $7 million home designed for the president's family, and reportedly benefited from some $652 million worth of business contracts over the six years when Pena Nieto was governor of the state of Mexico.

The unproven allegations are not particularly shocking for a Mexican public inured to corruption pervading the highest levels of politics. Indeed, protests over the deaths of 43 students involving a mayor in Guerrero state and a drug trafficking organization have only added to the president's list of issues on which to attempt damage control. To try to contain the rail debacle, Pena Nieto has ordered a do-over of the bidding process and has vaguely outlined an initiative to make its bidding processes more transparent. With energy bidding rounds due in mid-2015, questions are naturally being raised whether the reforms implemented so far on paper will result in enough transparency to give foreign private firms a chance, or whether the additional layers of regulation will end up providing more avenues for corruption that only state-owned firms in more pliable countries can navigate. 

The political and economic agenda behind Mexico's anti-corruption drive is valid: The country needs to reverse its energy decline and needs investment and technology from countries with much stricter corruption laws. If Mexico is going to be successful in securing that investment, it will need to publicly demonstrate that real changes have been made to satisfy armies of corporate attorneys well-versed in the U.S. Foreign Corrupt Practices Act and related legislation.

But is corruption actually destructible or does it simply mutate in line with contemporary political designs?

China, for example, is experiencing its biggest anti-corruption drive since Mao under President Xi Jinping, but the roots of this campaign can be traced back centuries to imperial Chinese power politics. Hierarchical chains of command have long been built from patronage and nepotism in the rise and fall of dynasties attempting to rule over this large and unwieldy land. Xi is trying to preserve the image of the Communist Party so that its institutional clout will endure well beyond his presidency. But his ability to survive that mission, like any of his predecessors, still rests on his ability to recruit and reward allies while punishing those who do not share his vision.

In Turkey, opponents of the ruling Justice and Development Party in the Gulen movement have tried in vain to discredit President Recep Tayyip Erdogan and his allies through corruption charges. Now, the movement stands helpless after having underestimated the endurance of Erdogan's power base. In a country as politically and ideologically polarized as Turkey, patronage must be built up at record speed before the next opponent comes along. And when a government is the chief party awarding major infrastructure projects, there is plenty of room to pad the budget with political favors along the way, from the bidding process to environmental studies to granting permits and contracts. Erdogan has a number of challenges ahead that can be exploited by a sizable number of opponents, but that is all the more reason for him to use his institutional heft to insulate himself with political and business allies who depend on him for their own survival.

Corruption charges can still yield remarkable results for opposition parties at the right time and right place. In Spain, a radical left-wing party, Podemos, has experienced a meteoric rise in popularity since its creation in March, with every corruption scandal that smears Spain's mainstream parties fueling another surge of support for the anti-establishment campaign. Public outrage over rampant corruption in places like Egypt, Tunisia and Yemen replaced regimes in the so-called Arab Spring, but the new faces still came with the old habits of doling out political favors to friends to rebuild and secure a political base.

Mexico is not alone. Whether the objective is to attract investment, preserve the Party as the organizing principle of the state, create a political legacy or simply survive, what the West defines as corruption — along with the campaigns and reforms designed to combat said corruption — are merely the means to a political end.

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