Fighthing Corruption in Developing Countries. The Role of Leaders

Eliminating Corruption
Van Hai LUU, Strategy Consultant, Viet Nam, Member
I am living in a developing country where corruption is one of the biggest barriers to prosperity:
- Corruption takes away the money from where it must be spent, private houses in stead of infrastructure, luxury cars in stead of schools etc.
- Corruption prevents the business from effectiveness: long and complicated procedures to force people to pay for doing business, raising cost and discouraging the investors etc and a thousand other problems caused by the corruption.
But your question is how to eliminate it?
It is hard and surely there are many ways, but as a leader, what we can do is to adopt a pure and clean position in whatever we do (don't be corrupted and say no to any kind of practices that directly or indirectly support the corruption) and transfer in our surroundings (company, family, group and society). Or simply, be a anti-corrupted example. Despite of the disadvantages caused by this practices.

Toxic Leadership Vis-a-vis Other Leadership Models
Gabriel Lopez, Teacher, Philippines, Member
Might be useful to get to understand 'Toxic Leadership' (Lipman-Blumen, Reed, Starks) vis-a-vis Greenleaf's Servant Leadership and 'Heroic Leadership' to craft a framework for leadership in corrupt and graft-ridden developing nations. The Exemplary Leadership of Singapore's founding father Lee Kuan Yu may be a useful model based on the rule of law to consider too.

Corruption or the Weakness of the Less Educated
Grocholski, Consultant, France, Member
Corruption is not just present in the developing world. Problems with ethics and morality exist in every culture. Attempting to reduce it with simple moral principles is worthless without sanctions (in other words the rule of law must exist and function). In a democracy the rule of law is an absolute necessity and must be applied equitably by the "elders".

Leadership is a Must
Hossein, Malaysia, Member
The main factor will be helping a group of people to move united and with a same goal.
Some people say if you want to be a good leader, then you need to be a good manager. I totally agree with this as if you are not a good manager even though you may have some good thoughts but you need be able to construct them in the real field!

Leadership and Corruption
P.F. Brok, Management Consultant, Netherlands, Member
Leaders must be absolute transparent about their drive for clean business.
Let them put a slogan on the entrance "no corruption inside" and business partners must be invited to address attempts for corruption, by putting a Stop-Corruption Card in a SCC-box (name and shame).
Any alleged case must be investigated by the SCC committee demanding full view on pré-job possessions and current possessions.
Proven corruptable = loss of position.
The administration can promote this by rewarding contracts only to companies which comply with SCC policy requirements.

Moral Decay a Cause for Poor Econmies
Ssamanya M.Geowillis, Manager, Uganda, Member
Upbringing and moral decay has eroded the good virtues in man. Those in power do not see the need to plan for their economies. For how long should we be expecting to be given supplements by the donors? LDCs have equally to wake up to develop their economies. One man should not be seen to eat while all the rest are watching. Governments must have the will to punish those involved in graft. They should be brought to court. Pay back all they have corrupted after justice has been done.

Leadership in Developing Countries
Emmanuel Reyme, Director, United States, Member
I heard you all and thank you greatly. Another aspect of the dilemma appears to be enzyme corruption. Rich countries and NGOs have their hands in the open wounds. They encourage corruption to some extent...

Leadership in Developing Countries
Dr Fouad Saher, Consultant, Canada, Member
Corruption is a metastatic cancer in many developing countries. Real democratization and rigor in judiciary reforms are necessary to begin the cure, hoping it's no late...

Eleminating Corruption
Dr. Uwe Schindler, MBA, Manager, Germany, Member
Industrial countries in Europe are not innocent in that case. Often it is possible to spent payments for corruption with the argument that this is a regular part of the business behavior in many developing countries. The argument is: if western industries would not play according to the same rules as on the target market - there will be no business at all.
In order to support the export industry in leading countries the local tax law opens ways to declare corruption payments as "business expenses". The governments of industrial countries must cut these ways, and leading companies must follow compliance rules by law. This might be a way to break the circle.

Eliminating Corruption Through Effective Leadership
Emmanuel Reyme, Director, United States, Member
A Servant Leadership Style (Greenleaf) would be a convenient model to help shaping a new design for developing countries as opposed to a transformational style, which could be very crucial for the global business order.
If nothing is done, there will be possible transformations across developing countries and the big, the powerful cannot stop the stream. There are two counties in the western world, I believe, that could serve as patterns: Uruguay and the Island of Barbados.

Corruption and Exploitation
catherine makumi, Consultant, Kenya, Member
When leaders do not give the BOP's a chance to develop themselves. This is corruption. The motives of the leaders must be selfless, not one of exploitation.

Leadership in Developing Countries
Ranjiv Kurup, Consulting - Management, India, Member
Emmanuel has made two extremely outrageous generalizations of developing countries - that (a) "most developing countries depend on rich nations and international organizations to run their internal affairs" and that (b) "when rich countries start cutting their budgets... Developing countries increase their expenses and social projects". Can you explain how you came to these conclusions?

Leadership in Developing Countries
Emmanuel Reyme, Director, United States, Member
In response to Mr. Kurup of India, let me say they are facts. Some advanced countries try to fix theirs problems by being very conservative in terms of expanding the size of their government. On the other hand, because some developing countries are guided by non-sense and corruption, they do not care. They believe they will get help from NGOs and other rich countries. This is corruption under the umbrella of charity and humanity. Why encourage the poor to be poorer by encouraging corruption and laziness! My objective is to explore every angle of the problem. If you know the American welfare system, I could probably say, they are the same at a larger scale.

Consider what is the Source of Corruption
Randall Newbun, Director, United States, Member
One of the challenges of fighting corruption is to realize the source of it.
It is not abundant resources, they just feed it.
It is not poverty that has been told that they have been fatalistically locked into poverty, and they have no ability to change their future.
Corruption is not the result of abundant or lacking resources.
Corruption is a condition of the "inner person" and their values.
Until there is a "heart" change in values, corruption will continue.
Legislation only changes the rules of corruption. In most highly corrupt countries, the whole business machine depends on corruption to even function. If we remove that, they do not have the experience or infrastructure to continue to be productive.
Society changes, not as adults en mass develop a new lifestyle, but as the younger generations bring in their new values. If we truly want to see corruption eliminated, we must train the children and youth in effective and acceptable forms of doing business.

Address the Risks of Corruption
Jim McMichael, CxO / Board, United States, Member
To fix a problem, you must identify the problem, compartmentalize the problem, then promote a doable resolve. First corruption should be addressed in a risk matrix. The matrix should address political, economic, business/corporate, terrorism, physical and crime risks due to corruption. Do not try to be the panacea but focus on a tier within your leadership scope of influence in the matrix and work on such.

Eliminating Corruption
Sonny Mathew, Student (Other), United States, Member
Each individual needs an internal moral compass by which you govern yourself. Personal transformation is the key.

Corruption a New Paradigm Required
Neil Shannon, ICT Consultant, Australia, Member
This is a most interesting discussion, however it all appears to me to be skirting around the issues. I have been stimulated by working in Tanzania (volunteer for a school), and following considerable travel within Africa (19 trips in the last 16 years) to try to better understand corruption and perhaps develop a new paradigm.
Facts:
- Poverty has increased in the last 40 years in Africa from 45% to 75%, despite huge injections of foreign aid.
- Almost all countries within Africa are significantly impacted by corruption. Corruption starts with the ruling elite.
- Corruption requires two parties to exist and in most cases the peak corruption is facilitated by western economies (governments and business).
- Once the population witness the corruption at the top level it quickly filters down through the public service, business, media judiciary to the frustrated and disempowered citizens.
Billions of dollars flow each year from Africa to financial institutions and businesses in the west. India and China are now also increasingly involved.
For every dollar exported to foreign bank accounts or for foreign produced luxuries there is a huge negative multiplier effect on poverty. To explain it a million dollars of aid is spent on local production this generates local income for the poorer class who in turn will not save but spend nearly all on local essentials (not luxuries) this in turn will go around again stimulating further income growth if a leakage of say only 5% then it can be seen the initial 1 million would generate 10 million in income after only 13 cycles.
So the negative impact of corruption it is not the net amount but the gross amount say 10 times the original amount on reducing possible income for the poor. This is the reason why poverty is increasing while aid is also increasing.
There have been attempts by foreign powers and internally to fight corruption including initiatives by governments, the World Bank, UN... Unfortunately these are undermined by the very same bodies continuing there commercial behavior that supports corruption. Quite often African countries commit to cleanups and foreign powers accept this and continue aid knowing nothing will actually change. Most of this behaviour is supported by self interest at a government and business level.
We should not continue in the same way for the next 40 years, there needs to be a new paradigm of how to break the cycle, Dambisa Moyo takes the radical view of stopping aid, however that is unlikely to succeed.
There needs to be a global acceptance of the issues and an education process not just on ethics and morality but an understanding of the science of corruption that is people need to understand the consequences of participating in corruption.
Corruption is not something immoral undertaken by corrupt third world elites, for every transaction there are two parties and the invisible second party is western governments and businesses. This is also supported by the west insatiable appetite to continue consuming ever increasing proportion of the earth’s resources, this can only continue at the expense of the third world, there needs to be a radical rethink of the current materialistic trend and our turning a blind eye to supporting corruption for our own benefit.
In Africa I don’t believe education of the current leaders will be productive, it needs to start as a major component of new education for the next generation and it must be based around an understanding of the science of corruption and the consequences not just that it is wrong or immoral.

G20 Countries
Raed Naser, Canada, Member
G20 countries are one of the causes to the problem too. Pushing more and more money to improper channels in development countries (they know it is improper) increases the corruptions. Many companies of G20 countries depend on the corruption in these countries. This is either through cooperation with the government or through bribe.

Millenium Goals are a Lie and Hence Encourage Corruption
Grocholski, Consultant, France, Member
The developing world. Big issue, big problem.
What is the success of the UN and its agencies in reducing poverty? Abysmal.
The gosplan bureaucracy in all aid projects and programmes is already a form of corruption. Imagine how haitians feel about international aid? Want a hospital to treat the afflicted and sick, you have to go through an absurd procurement system as if you were building a Nasa shuttle.
The global economy but for whom? The UN system needs complete change if the priority is reducing world poverty.
Corruption is in the minds of bureaucrats and fighting against it is not the priority. Ethics and morals cannot be imposed on a mafia, or can it?

Administration Corruption
Azizullah, Entrepreneur, Afghanistan, Member
I am living in a middle developed country where corruption is one of the biggest barriers to prosperity.
Corruption prevents the business from being effective. Long and complicated procedures to force people to pay for doing business are raising cost and discouraging the investors etc. Plus a thousand other problems caused by corruption, but my question is: how to eliminate it?
It is hard and surely there are many ways, but I agree with Van Hai Luu that as a leader, what we can do is to adopt a pure and clean position in whatever we do (don't be corrupted and say no to any kind of practices that directly or indirectly support the corruption) and transfer to our surroundings (company, family, group and society) or simply, be a anti-corruption example. Despite of the disadvantages caused by this practice.

The Roots of Corruption
Carlos Mora F., Entrepreneur, Guatemala, Member
I have read all opinions and living in a 3rd world country and being a Guatemalan that loves its country I would tell you all that all of you have part of the solution, but corruption is much more than that. To me corruption is all you have been talking plus decades of history that goes from Indians given bribes by landlords, multinationals taking out and changing governments and in the last two decades international NGOs giving money to everybody to accomplish their plans no matter what and let's add lo peor narcos.
Solutions? Society has to enforce the state of law, stop giving money to governments, any protect should be carry out by the private sector, USA have to do something to stop the coca and marijuana consuming, the political system should change and overall, we have to educate our people and give them civil and moral principles.

Corruption
Sandris, Latvia, Member
It sounds strange "... developing countries increase their expenses and social projects..." seems author is totally wrong! Many developing countries were the first who started with budget cutting.. Corruption? In many cases this is caused by banks' intervention into internal affairs of the country, companies developed by ruling part of society is another reason why corruption is such pain...
If anybody thinks that corruption is matter of consciousness he only will face painful failure... Mostly its embedded into system itself. Why it is such a hard problem, especially in developing countries? This is a matter of way how a country, region, county is ruled. But this is topic for long long lecture... Rule of law, internal policy, traditions, mentality (some countries take it as regular thing), military and civil conflicts... And so on and so on again. What to do better? Rule of law is only way to act!

Fighting Corruption
Humberto A Capriz, Business Consultant, Canada, Member
Corruption is not just a 3rd word problems, is associated with cultural factors.. Please I recommend to pay attention to the Chile case. In last 30 yrs. They show a consistent progress.
Corruption kills the economy. Law application is a great way to start... Build a strong partnership between the law makers and the justice structure.
Ask advisers from Canada, Chile, Norway, etc.

Ending Corruption / Raise Living Standards for the Poor
Dr. Alan Williams, Professor, Thailand, Member
To be honest, you can draw all the models in the world but in most countries nothing will change until there is political reform. In many such countries the current politicians are ruthless leeches who want the status quo to continue and will in fact fight change quite strongly and ruthlessly. And in many of these countries the poor masses have little understanding that they are being used and duped by the politicians, often through very cheap vote buying etc. Somehow educating the masses to more deeply understand how democracy works, their rights (and their responsibilities) must be part of the solution, and probably also means the need for a middle class movement which gains the strength (through credibility, not through mob action) to force political change.

Solutions to Corruption
Julio Villafuerte, Student (MBA), Peru, Member
As the person from Guatemala said, many of the opinions and points of view you have explained in this forum are a part of the solutions to corruption in developing countries. I consider acquisition capacity and education as fundamental pillars to make the changes. Next generation need leaders with integrity to use them as reference, so the change could take more than one generation.

Corruption Permeates Social Fabric
John Muka, Consultant, Australia, Member
Corruption is not natural, it is acquired over time and at some point of maturity becomes endemic in persons.
I come from a developing country and I'm seeing this cancer called corruption permeating through the social fabric... The starting point is the top government officials and politicians and it flows down the line. The sad thing is that it is reaching the bottom of the pyramid (bom). Free hand out mentality and bribery tactics displayed time and again especially during election times is changing mind set of the local population who are 80% illiterate ignorant. Very sad...
The foreign donor agencies do not see that and if they do, they do not have the power to question a minister in government of a foreign country and bring him down to account...
Very sad but to fix this situation, we need to look at a strategy that goes back to basics and start from the bottom up rather than top down.

Poverty is Most Dangerous
Ashokdgaur, Member
Poverty is biggest of enemy of developing countries, it is root cause of all the problems of the world. Poverty is more dangerous than terrorism.

Corruption and Role of Leader
Madan Gopal Agarwal, Business Consultant, India, Member
Ambition breeds corruption and then it spreads like cancer.
It takes firm determination and willingness to bear consequent losses to fight corruption. 'Leading by example' is effective only sometimes.
Multiple actions are needed to reduce/eliminate corruption e.g. making simple and transparent systems, administering them effectively, having checks like vigilance, information sharing / gathering, etc., coupled with deterring penal actions.
Doing these and many more things over a very long period, may bear fruit over 2-3 generations.

Leadership in Developing Countries
Ranjiv Kurup, Consulting - Management, India, Member
For every dollar of international aid, only about 8% reach the targeted recipient. That is, 92% is the cost of delivery, comprosed of many parts, including salaries and wages, air/sea/ground logistics including warehousing and numerous other overheads including bribes, misappropriation, diversion of funds for other purposes than those intended, etc.
Great topic, but what does this have to do with Prahalad's BOP, which essentially addresses this segment as an engine for growth and innovation, and implores you to look at the poor, not as victims, but as "resilient and creative entrepreneurs and as value conscious consumers"?

Leadership in Developing Countries
isaiah, Accountant, Kenya, Member
Developing countries are developing. In all aspects, meeting basic needs for citizens: education, health, clean water, sanitation... There is lack of sufficient resource / utilization, unequal distribution of resources, i.e. 90:10 rule where 90% resources are controlled by 10% of populace who mostly live below a dollar a day.
The way forward is to increase transparency, accountability, fight graft through a structured framework, elect upright leaders, emphasize on direct aid and avoid tiered aid. The first step is active democratization, followed by clear resource flow.

Leadership in Developing Countries
Samonn, Analyst, Member
Cambodia is one of the poor countries in the region as well as in the world. Corruption versus effective leadership. It's not a simple question asking that what should an effective leaders do to eliminate corruption? Normally, corruption occurs in a systematic way which means if only a single element or minor element of the system is corrupted, the corruption cannot stay longer. However, once the whole system is corrupted, it is not an easy way to eliminate. One suggestion is that you have to understand the nature of the system, how each element links to each other, and how to build a broad base force and inflitrate into the system. A broad force must be built to educate the new generation fighting corruption, strong advocate in law enforcement, and many more.

Stopping Corruption in Developed Countries
Wood, CEO, South Africa, Member
1. Anti-corruption legislation must be enacted and enforced on individuals and companies from developed countries that are seeking to export or operate in developing markets. Every corrupt activity has 2 parties. If need be walk away from the corrupt deal. Companies that are involved in corrupt activities should be nationalised without compensation
2. Personal accountability ~ doing the right thing and saying no plus being brave to report
3. Consequences for individuals involved in corruption.
4. All corruption ~ illicit competitions activity, environmental non-compliance etc must be detected and have consequences.

Corruption Caused by Greed
Sanyambe Obert, Student (MBA), Namibia, Member
Corruption for for me is caused by those who want to take a big stake from a cake. Meaning they are greedy and would do anything to secure certain services targeting mainly people who may have low income in governments, the middle class who aspire to gain wealth or struggle for survival. In essence, the top of the pyramid is where corruption starts in my view.
For me more needs to be done on the NGOs and developed countries as they have the money to influence the status quo of nations. They corrupt in the sense that they dish out money to individuals in order to get their plans ahead. I respect all opinions from this forum.

Corruption in Developing Countries
Jeanne Hakizamana, Student (MBA), Netherlands, Member
Corruption is caused by the leadership. The employees in the lower ranking follow up on what the leaders do. In developing countries an effective leader has to enact their role as explained in mintzberg's management roles.
These roles (interpersonal, informational and decisional) will lead to a change in attitude down the organisational structure thus reduction and in the long run elimination of corruption.

Leadership in Developing Countries
Jeffrey Tshabalala, Career Consultant, South Africa, Member
Economic growth and human development in the developing countries is a leadership challenge which unfortunately does not get addressed in the design and delivery of humanitarian aid and development assistance. Essentially humanitarian and/or development assistance instruments, by "accident" tend to address the symptoms of the "crisis" and not the cause. The cause of the "crisis" is invariably the absence of intellectual and fiscal investment in public policies which assure service deliverable at the levels that unlock human development capacities.
For instance the instruments perpetuate a situation which inadvertently allows client countries to use the fiscal space created by development assistance for policy priorities which do not promote sustainable human development. The consequent effect is that when assistance stops the "islands of excellence" created by the attendant instruments discontinue thus creating a vicious circle of human/ development assistance need.

Corruption Myths
Remme, Business Consultant, Netherlands, Member
Dear Emmanuel, eliminating corruption is like eliminating evil, quite ambitious.
But there are ways to limit corruption and fight it. In order to limit it, it is wise to:
- organise in such a way that decisions are not made by a single person, who can then be a target for influencing.
- good HR helps. If you ignore demotivation amongst the staff, you ignore people who no longer have the loyalty that otherwise would keep them from being corrupted.
- discuss the myths: corruption is NOT a necessary part of a certain culture, it is NOT the result of capitalism and it is NOT "what everyone does".

Leadership in Developing Countries
Bantwal Prabhu, Teacher, India, Member
India lacks serious leadership, talking, action, implementation in all areas of governance, education, business etc which will make an impact on development. The mindset has to change from a negative slavish fatalistic attitude to a positive rational approach based on long standing values of culture and not tradition or blind beliefs.

Leadership in Developing Countries
Radek, Investor, Poland, Member
More and more people in developing markets are becoming aware that corruption is a bad solution.
In Central & Eastern Europe (CEE), the number of people who give and take bribes has been falling steadily and the number of people who who perceive corruption as something bad increases.
But I think the best solution is time and because of more flexibility in traveling & work there must be born a new generation and the CEE region will become like Western Europe. This is about mentality.
People did not treat corruption as downtime in business before 89. During communism, when the market was closed, the bribes enabled you to have more than others. These people still live, and they still have this mentality.

Encourage the Citizens to Participate
hulsegge
In a developing country like Argentina, faith in their governors and politicians is at a minimum due to corruption and bad management. The only way to brake the cycle here is to encourage the citizens to participate in the decisions of public needs and goods and teach them how to organize themselves. Change comes from the bottom up, not from the topdown!
There are a lot of people wanting to change things in Argentina, for the better of all, and they feel powerless because the political system is so corrupt that if you get in, the only way to advance is to become corrupt as well, if you don't you get thrown out before your job has begun.
This is an "I scratch your back, you scratch mine "society. Budget cutting in the educational department and massive welfare plans for the last 10 years have disturbed the values of the average citizen. Here, change has to come from the organization of citizens and their active participation in local politics, thus pressuring the local governors and so on to the top. The political system in itself is too corrupt too change. And another revolution/dictatorship is out of the question. We're a democracy now, so let's act like one!

Leadership the Pilot to Transforming Nations
adeyinka ayodeji, Student (University), United Kingdom, Member
It should be noted at one point in time for all nations a decision has been made which had a positive or negative impact on the present generation and future generation. So when a leader is to take major decisions he should be well groomed on the effects it will have not only today but also tomorrow.
I find that leaders in developing nations should trace back decisions that led to the present situation and make a better decision to change the trend.

Managing Corruption in Developing Countries
Taruvinga Hamura, Student (University), Zimbabwe, Member
The road map to eradicating corruption starts with educating the population what corruption is. The costs of corruption to the whole nation must be clarified to everyone. While we must acknowledge that some of the corrupt activities in the developing countries is driven by hunger and not neccessarily by greed, no corruption must be justifiable.
The challenge then is to root out the causes of corruption no matter its source. The following are possible suggestions:
1) Education of people in schools, churches etc on what corruption is and opening lines of communication to report it once identified.
2) Establish checks and balances in governments and all other institutions to improve on governance systems.
3) Independence of the judiciary must not be compromised and the judiciary must account for their judgements.
4) Poverty must be eradicated as it is the main driver of corruption.

Corruption in Developing Countries
Swati Mankad, Student (Other), India, Member
As long as people who have money and power, irrespective of considering the means that they have been acquired, are admired symbols of success and achievement in society corruption will continue. We have to change the yardsticks of what we term as a successful person - it should be ethics and the right values and all success and achievement gained from it only.

Corruption is Not Only Economic
Dilip Khanal, CEO, Nepal, Member
Why does corruption occurs? Prahalad's approach is revolutionary. PR China has done many things along Prahalad's line, from product design to services to cater this market. Yet we find a high rate of corruption in PR China. It is beyond comprehension why China has such level of corruption despite of double digit economic growth rate and most inexpensive goods/services available to them.
My opinion is that corruption can not be associated with economic well being only, rather it is the result of a combination of many situations that are already spelled out by many contributors in this forum and also some psychological aspects not addressed so far. We have to discuss consumerism and corruption together.

Corruption in India
Bantwal Prabhu, Teacher, India, Member
The quality of life (Human Development Index) is more important than GNP or GDP so far as India is concerned. The corruption directly affects the life of the common man (70% of the population) and presents a life style for the rest to continue corruption.
Only punishment of the guilty in the open domain is the last solution of the problem which I think is no more a problem and is a fact accepted by a majority and hence needs a divine interference if at all is possible.

Corruption & Leadership
Rudolph L. Boy
The problem is in developing countries, corruption is a cash cow for leaders. They use the donated funds for their personal gains, corruption erodes the social fabric of society, it impacts more on woman and children, funds earmarked for schools, hospitals which are mostly needed by woman and children gets diverted to personal accounts in the Swiss banks.
Developing countries will take long to get where the western nations are because of corruption.
And it is not only that. Because legislators makes the laws in developing nations, when they pass corruption laws, they are so weak such that it does not cover them. If it does, they face lighter sentences or fines. While for small fish as they say, the exchange of 10 US Dollars will put them 10 years behind bars.
The quality of human life in developing nations is a shame because of the leadership. With corruption, if you are not affected, you are infected, so leaders beware.

Corruption in Costa Rica
Liza Fendt, Management Consultant, Costa Rica, Member
In my country corruption is widespread particularly where government is inefficient. If you must wait three days for a doctor to see you, believe me you are willing to pay extra for the service. Several elements are fundamental to stop corruption, the first one is that the service offered is evaluated as a whole system constantly and that people using the service have the opportunity to give feedback. This ties with employee evaluation.
The third element is the identification of the employee with the enterprise he is in. If you don't care or believe in what you are doing you are bound to look for some reason to make it make sense. Private benefit is the answer. Make sure people understand the importance of their work, the end/objective of the institution they work for and are constantly inspired. If work gives more than money corruption will end.

BOP Concept and Poverty Eradication
KAMAU ESTHER, Manager, Kenya, Member
BOP is a wonderful idea in poverty eradication. The biggest problems with leaders in developing countries are: corruption, nepotism and unproductive politicking which take priority and hinder economic recovery.

Corruption & Leadership in Developing Countries
Edward Onipede, Manager, United Kingdom, Member
Sadly these two elements are intertwined.
Leaders arguably set examples and in the developing world, sadly they've been most effective only with regards to corruption. Hence the cancerous prevalence of corruption in all spheres of life in these countries.
Education is the only hope of effecting any change in the long term and the citizens also need to step up to the mark as they are the change agents that would make this happen. The developed world governments also have a huge role to play - by demanding the same code of practice of their companies abroad as they do at home.

Does Social Security Create / Support Laziness?
Ove Sahlin, Management Consultant, Sweden, Member
Very interesting thread indeed!
I have an additional question, slight of topic maybe but anyway. Why is it that some people believe social welfare programs make people lazy? I personally believe that a good society is one where everyone has food and shelter no matter class, religion or race. I would like to argue that a person who knows that it's safe to get ill and no matter what happens, the kids will have food, is a much more efficient and devoted worker than a person working under the pressure of fear of losing those basic things.

Welfare Programs Don't Make People Lazy
hulsegge
Dear Ove, it is not the welfare program that makes people lazy, it's the abuse of the welfare program by lazy people and a state that doesn't control corruption, as is the case in Argentina.
I agree with you that it is ideal to have a program to fall back on, being able to feed your children no matter what. What I see here though is that a whole generation of unemployed people are 'bought' by the government so they have a secure vote for their next election. Instead of funding a strong national industry and stimulating work ethics, these people are pushed into the 'lazy zone' and unfortunately teach their children that it's more rewarding to receive than to give.

Corruption in and by Developed Countries
DATU ABOUZEID A. SINSUAT, Student (MBA), Philippines, Member
I am convinced that corruption does not only exist in third world and developing countries but more so in developed countries. The way I see it corruption is greediness to money and power and I believe the international financial institutions such as the World Bank and IMF are controlled by the highly developed countries although corruption at their end is not easily detectable because they have developed and designed frameworks that makes it hard or difficult to detect.
But why do I say this? Simply because they control the international money market. To give some facts, look at every war whose money is being used and who is behind arms deals. They only use the third world and developing countries as a field of experimentation or testing ground. In short they are the role model of every corrupt person and country which makes life for the poverty level more poorer than before...

Curruption and Politics. Sad But True ...
Ove Sahlin, Management Consultant, Sweden, Member
Hi Gwen and thanks for the response. I see your point and totally agree. The thing is that here in Sweden it was made a big media bubble, papers screamed out the "fact" that up to 20% of all social security was fraud. Then, after a while, when a team from an economical university had looked into the problem it turned out that... Yes some people was taking advantage of the system but that was far less than 1% of the turnover.
So, politics is a game of it's own and in this case invented a case that didn't exist. Yeah, it was election year! ;o)

Do Welfare Programs Create / Support Laziness?
Jeanne Hakizamana, Student (MBA), Netherlands, Member
In The Netherlands, individuals on welfare are required to apply for jobs and in fact some are contacted to work. This pushes them to search for employment.
I think that likewise governments should be supported in certain situations but this has to be for a limited time only. The longer people or countries are on welfare, the more difficult it is to free them from it.

Bottom of the Pyramid
James Antwi, HR Consultant, Swaziland, Member
We can possibly ensure the recognition of those at the 'bottom' if policy makers will initiate and formulate policies using action research methodologies. I think this will ensure sense of ownership of emerging solutions.

Regulations
susan evans, Student (MBA), Jamaica, Member
Governments of developing nations need to be convinced into creating a business friendly environment and made to realize that businesses have a role in the process of development.
Companies that can include social responsibility in brand building leave a lasting effect on customers in third world country where this concept is new. This may lead to sustained competitive advantage.

Attitude Towards Corruption is Different
Jagdish B Acharya, Consultant, India, Premium Member
Corruption exists everywhere at different levels.
In developed countries the common man needs not be corrupt to live normal life as the basic needs are met.
In developing countries it is difficult to reach higher levels without corruption. In the process there is a general attitude of tolerance towards corruption. This tolerance is bigger in developing countries than in developed countries. It is more widespread and very few are totally unaffected by it. An attitudinal change is needed to decrease the rate of corruption.

Developing Countries
James Antwi, HR Consultant, Swaziland, Member
I think it is important to recognise the various forms of investing / spending, comparing the spending in advanced countries context to that in low-income countries context. What can we make out of such comparison?
Low income countries do not have the basic infrastructure such as good roads, water, etc to serve as a leverage for growth, and development. Do they need to spend on these areas to create the right environment for further development? Or should they cut spending in these areas because advanced countries have done so?

Corruption in Developing Countries
Fouad Saher, Consultant, Canada, Member
The way to eradicate corruption will be long. The first thing to do is thinking how to change mentalities and modify attitudes and behaviors about corruption.

Corruption in Developing Countries
Jay Watson, CxO / Board, United States, Member
I think there is one thing here that needs qualification. The definition of corruption. More to the point what is the scope of the definition of corruption. This is a business forum, and as such, there is an underlying goal of each one of us: to learn to be better in business. We are here to seek a possible advantage over others. This is true in individuals and business. Corruption (at least from the sounds of it) in the context of this thread seems to be methods used by some to gain (unfair) advantage over others. Some methods are blatant and obvious. Most however, fall in to the category of "it depends on how you look at it." ergo, you won't be able to solve the problem of corruption until you properly define the scope of corruption.

When the Leader Has no Vision, the Country Suffers
adeyinka ayodeji, Student (University), United Kingdom, Member
The issue of corruption will continue to grow if the leaders that emerge are visionless leaders, who do all they can in the bid to assume office but when they are elected cannot perform.
This is often the case if they had no (clear) goals they want to achieve (and he who fails to plan, plans to fail).
I think for developing countries the time is right for leaders to prepare how they are going to move their nation by taking strategic decisions.

Time for Action...
P.F. Brok, Management Consultant, Netherlands, Member
Dear colleagues in the discussion forum, is there anybody who can get this on the agenda of the UN or in national legislation proposals or ...?

Corruption is NOT a Matter of Right and Wrong
Greg Flattley, Consultant, United Arab Emirates, Member
4 FACTORS are at play in corruption. They are:
1. Poor wages (incentive)
2. A lack of internal financial control procedures (policing)
3. An insufficiently large middle class (votes)
4. Efficiency (it works)
On efficiency, correct me if I am wrong but the world bank found that corrupt systems often function more efficiently than others. Of course, this is only convenient for those with the ability to pay, excludes the poor and threatens justice. However, if it is convenient for the 'critical mass', it will be tolerated.
Tackle these 4 aspects and major inroads will be made into addressing corruption.

Why Corruption is Tolerated
Ove Sahlin, Management Consultant, Sweden, Member
Greg, very good! You put the finger on the weakest part of democracy as we know it. If corruption is convenient for the "critical mass" it will be tolerated. I agree on your action plan and see it as a possible work task, but am afraid that I won't live to see it happen. The obstacle called 'greed' is a tricky one to get around.

How to Eliminate Corruption
Robert Arunga, Consultant, Kenya, Member
It is easy to reduce / eliminate corruption inside a country through committed and exemplary leadership! In Kenya corrpution became a temporary reality in early 2003, but as soon as the citizens realized the leadership were now committed to zero tolerance to corruption they reverted.
The corruption perpetrated by operatives from outside Kenya is much more difficult to eliminate, and requires concerted global action and cooperation.
I suspect the bottom line is efficient detection and high cost if you get caught.

Eliminating Corruption by Providing the Basic Needs
adeyinka ayodeji, Student (University), United Kingdom, Member
The majority of the citizens are in need for the basics because the mentality to collect as much as possible to afford the basics is their first aim. The way forward is provide the basics and the money stolen will be not needed / useless since your wages is enough to provide that is needed so why steal.

Corruption in India - Roots
Bantwal Prabhu, Teacher, India, Member
Vote bank politics has led to corruption at Banks in India running a parallel economy affecting every moral fibre of Indian. This is leading to cancer and the only remedy is surgery and cleaning politics and their resulting good governance. It is next to impossible for change to take place, only time will tell the end result of any calamity!

Corruption in the Private Sector
Manuel Razo, In-house consultant, Philippines, Member
Corruption also occurs in the private sector and its being initiated by 2 outside forces of the organization. These are the regulating body (the government) and the suppliers who want to capture the business of the organization.

Corruption in Private Sector
adeyinka ayodeji, Student (University), United Kingdom, Member
Corruption truly exist here too, but the corruption in the private sector will continue to grow if the level of corruption increases in the country among leaders. If there is a need for money to provide for the basic needs. But when the basic needs are provided by the government what is the need to stain oneself with an issue that can be avoided?

Corruption in Business
Dilip Khanal, CEO, Nepal, Member
Corruption in many cases is also initiated by private business companies. A profiteering mind set of the business community and an undesirable environment in the government triggers this type of corruption. Educating on the value of ethical ways of doing business may help to some extent.

Corruption in NGOs
catherine makumi, Consultant, Kenya, Member
Corruption has also taken root in the very organizations trying to alleviate poverty at the BOP. For example, funds set aside for work by some NGOs are used for luxury cars, sleeping in expensive hotels, huge amounts of salary and exorbitant holidays. This leaves little money to do the actual business. This I feel is not only moral decay, but also greed. How can this be eradicated?

Rural Development Overview by Governments
joseph kwame freitas, Ghana, Member
The "bottom" are always left for the urban development after governments are voted to power. The rural development is revisited during election period to "buy-in" to their votes. There should be a sustainable empowerment of the rural folks economically, financially, politically, socially, technically (infrastructure) to facilitate the development of the rural areas.
Another aspect to forestall the BOP is to look into the introduction, implementation and sustainability of SMEs to mobilize the financial resources of the rural areas to help determine the road map for the their general contribution to the GDP.

New BOP Leaders are Needed
Alabamarjara Itama, Entrepreneur, Nigeria, Member
A radical psychological shift in the minds of those at the top is required for this crusade to achieve the desired results. The mncs will embrace this if it offers a market they no longer have in the western and other industrialized nations. We are already experiencing the 'scramble' for Africa's 'cheap' natural resources. And with profit as sole motivation, until such time that standards will be enforced as a result of loud outcry, low quality products will be dumped here. We are already having that from China. For the African nations with more than 75% of citizens are at the BOP, a radical, almost a revolutionary approach is imperative. If a new set of entrepreneurs are not 'borne' to take the driver's seat and wrestle economic power from current holders, the African BOP population will be increasing.

New BOP Leaders are Needed
Bantwal Prabhu, Teacher, India, Member
True: the developing countries, which suffer because of open corruption and legalized by the dirty political system need a large band of dedicated BOP leaders. The majority of them should come from the BOP itself. They can generate an awareness and then involvement of the whole population in the process of transformation of the society and the cleaning of the system at all levels.
This is challenging unless the whole world supports removing poverty from the BOP countries.

Corruption is Everywhere
Kwaku Agyeman-Manu, Strategy Consultant, Ghana, Member
Corruption is everywhere but the intensity and frequency are the variables. As long as the rich world is so so happy benefiting from cheap raw materials from the developing world and taking serious advantage of their markets without consciously investing heavily into infrastructure and industrial projects in these countries, the developing world will continue to remain at the bottom of the pyramid.
Why do American companies see so much viability in Ghana's oil and gas exploration, invest to mine these resources but refuse to invest to doing the refining in Ghana to add value to these resources in Ghana before export? Only God can tell.

Globalisation Has Led to More Greed and Corruption
Bantwal Prabhu, Teacher, India, Member
Money is God and God is money, this is the lesson for all concerned in the world matters today which has led to greed and corruption. The poverty does not lead to corruption but the unlimited greed for wealth leads to corruption and degrades the societal values.
Values based on ethics and need based requirements and a good protection and justice system can reduce the ill effects of corruption in our society.

3 Observations on Corruption
susan evans, Student (MBA), Jamaica, Member
1. Power brings out dishonest tendencies.
2. Corruption seems to find comfort where there is a chance to use intermediaries to perform the acts.
3. Where there is a culture of corruption it appears to be almost contagious, especially when it is perpetrated at the top.
Values will need to be changed, and those who break the law sanctioned.

Even a Perception of Corruption Already Causes Damage
Remme, Business Consultant, Netherlands, Member
The damage done by corruption is partly through perception. If a company is associated with corruption, it will feel the consequences, whether there has actually been corruption or not. This has a lot to do with how the company is represented by its leadership.
Also, if a leader is associated with corruption, the others in the organisation will feel inclined to be more tolerant to corrupt behaviors.

Regulation and the Corrupt
Jay Watson, CxO / Board, United States, Member
All, the potential for corruption exists every time a decision is made... by anyone.
One can add layers of oversight and still find that if the top layer is corrupted, all layers eventually fall.
If you appoint those to regulate who have no vested interest in the outcome of the system, those seeking to profit will find a way to make the regulators have an interest.
Likewise, a system with no tolerance for corruption will fall due to the mere perception (as earlier stated) of corruption. Due to the fact that, those seeking to manipulate a system will simply implicate regulators until one appears that possess the qualities "corruptors" seek.
Corruption seems to be the noise in an ideal regulatory system.
The question now is, how to minimize that noise, and to what acceptable level?

Corruption in Developing Countries Like India
Bantwal Prabhu, Teacher, India, Member
Right now corruption is a burning issue and social activists led by Anna Hazare are taking active interest and force the corrupt government and its machinery to change the system and clean the process.
It is likely to lead to a state of confrontation between the various groups ending in some changes and a order which will result in some control and reduction. Hope the quality of life will improve in the future owing to these changes.
If the mission fails then only a revolution can change the situation.

Eliminating Corruption: 3-tier systems
isaiah, Accountant, Kenya, Member
This can be accomplished by so called 3-tier systems:
i) The top leaderdership defines and ensures the fight against corruption is real, and
ii) The executing arm is run by people of integrity, and
iii) Public compaigns are run to ensure citizen enlightment.
Also social systems should ensure equitable resource distribution and utilization.

Strong, Developed Middle Class
Dr. Alan Williams, Professor, Thailand, Member
Sorry but I don't agree. If the top officials (company or government) are corrupt they will ensure there is nothing (models / legislation / oversight committees or whatever) implemented or even discussed which could interupt their corruption 'income'.
Imho a better educated moral middle class in big numbers is the answer but unfortunately in many countries this is a long way off.

Criteria for Selection of Leaders
Greg Flattley, Consultant, United Arab Emirates, Member
Hi Emmanuel, another thought comes to mind. All leadership positions should be advertised using merit-based selection criteria and a representational selection committee. Conflicting interests should be explored, preferred applicant profiles developed and prior knowledge of applicants officially declared. All selection decisions published, approved and signed off.

Filling of Leadership Positions
Dr. Alan Williams, Professor, Thailand, Member
I would agree, in principle, that there should be detailed scrutiny of candidates for leadership positions. Unfortunately (regarding corruption in public funds), when government is controlled by a ruthless immoral even violent few, then (deliberately), none of these things will happen.
I work in Thailand (30 yrs) as an organizational consultant and I coach PhD candidates in the graduate business schools in three top local universities, and the same in Vietnam and in China.
I see in all of these countries (in different degrees of course) the very slow rise of a moral, educated, logical and sincere middle class who will eventually, when they develop numbers and gain the courage to speak, will spearhead and demand change, and it will be a tough fight.

3 Sources / Components of Fraud (Corruption)
isaiah, Accountant, Kenya, Member
Corruption, like fraud in the 'Fraud Triangle' by Donald Cressey, has 3 components:
- Pressure
- Opportunity, and
- Rationalisation.
What can top leaders do against those 3 pillars of curruption? They can provide pressure against corruption by controls, reduce opportunity by good systems manned by people of integrity, and through public education they can affect rationalization of evil deals.
That's what 3 Tier Systems are all about.

Anti-corruption Systems
Jorge Canale, Consultant, Argentina, Member
Transparency International has an anti-corruption system for developing countries which is applicable to any country, and is very effective.
You just have to know, apply and disseminate it. In Argentina it has been applied in some cases with great success.

NGOs and Corruption Need a Strict Control System
Grocholski, Consultant, France, Member
Unfortunately NGOs and multilateral institutions encourage corruption, both within and outside their sphere of influence.
You cannot pretend to work on development issues without strict control of where the money is going. No control and no monitoring of what is done with the money is already corruption.
Moreover, should one decide to criticize a project/programme, donors will refute your conclusions for "diplomatic" reasons.
Do we really care about the poor or are we all here for development business? Even here on the internet, we exchange ideas on corruption and development whilst the world is getting poorer each year. Cynical or true?

NGOs and Corruption
Dr. Alan Williams, Professor, Thailand, Member
I agree, we all talk our heads off while the world gets poorer. Did our maker (whoever / whatever that is) really intend that some people starve to death and die because they can't afford inexpensive medicine which would save their lives, whilst the other half drool over Gucci handbags? Seems all wrong to me.
I also agree about some NGOs. I did a consulting project several years back with one of the world's highest profile Christian NGOs, supposedly focused on poor children. The way they wasted massive amounts of money was beyond belief and the internal nasty fighting consumed almost all of the energy and capability inside of the organization. Then they all sat around, several times a day for prayer sessions.
Real specific focus on poor children was getting very little attention. I was shocked. I sometimes wonder whether, in the next 100 years we will see massive changes whereby society will change, driven by threatening action by the poor masses, with a rethink of capitalism.

Eliminating Corruption: At Least Start Small
Dilip Khanal, CEO, Nepal, Member
The basic reason for corruption is society's positive approach for it. In the past, a corrupt person used to be talked of and was seen as a undesirable subject.
The situation is just reverse today. Last week, I was looking for a book on business ethics. The sales person in the book store advised me to look for a book on corruption in business.
This reveals how things are changing.
But, yet we believe that corruption does not exist in every sphere of life even in the poorest segment of society. Corruption seems to have a trickle down effect in certain countries.
We often talk about eliminating the entire folk of top brass in politics as a starting point for eliminating corruption. We have also formed a voluntary group to curb corruption and in some instances, we have been successful too. However, our outreach is too narrow now.
The point is: we can start with small initiative rather than talking about pessimistic view without exerting any effort to curb corruption.

Anti-corruption Requires Lifestyle Change
isaiah, Accountant, Kenya, Member
Corruption is social, political and economic. Thus to tackle it, a framework is required in which behaviour will be rehabilitated and economic resources provided(political-policy setting) to fight as well as deter the current vice.
I propose along term strategy that may transcend a generation or two - a concerted, sustainable effort at both individual and corporate levels.
Efforts to empower the poor through equitable resource distribution, and systems of detecting and punishing the corrupt and rewarding proper leadership have a role to monitor and control and can give direction and support.

Corruption is Cancerous and Should Be Treated Like Cancer
Bantwal Prabhu, Teacher, India, Member
Today corruption is present everywhere and spreading very fast in developing countries leading to misery, chaos and disasters. Corruption is like cancer, uncontrolled and leading to death of the society and good values.
The governing systems should be cleaned up with surgical intervention and radiation. A change has to take place either in the form of a mass movement, or a revolution finally ending in a order state from the chaos.

Role of Management in Corruption
raymond bett, Student (MBA), Kenya, Member
More often than not in third world countries,those holding management positions view themselves as the privileged lot.This is a view which has made many companies to collapse due to corruption and pursuance of wrong policies.The corruption cases in Kenya are of a magnitude which will ensure a few live in opulence while the majority live in abject poverty and die young.The donor countries should not just make statements on corruptions issues but ensure that the culprits are made public. The third world underdevelopment has nothing to do with lack of resources but lack of an enlightened leadership.This is why even in countries which are net producers of oil,the price of fuel is so high that the general population is unable to enjoy the benefits associated with it.There is need of the rest of the world to ensure the leadership in such countries are isolated.It has been argued that most of the looted monies and property are located in developed nations.It is therefore imperative for for such nations to help Africa to regain most of it without complications.Africa may have fast tracked its democratic credentials due to the perestroika effects but next revolutions will be in Africa against the rich.It s a scenario which can be avoided if the world assists Africa to recover and reclaim her assets hidden in other countries.

Elimination of Corruption is Challenging
Bantwal Prabhu, Teacher, India, Member
The developing countries like India are facing the serious impact of corruption in all walks of life with the poor majority in the BOP level. The quality of life is very very poor indeed particularly in health, sanitation, education, security, shelter.
The leadership is lacking everywhere with bad governance in all sectors, politics, bureaucracy, business, police, justice etc giving rise to money and muscle power taking the lead and destroying the very fabric of the nation.
The masses have to take it to hands to remedy the situation by some sort of a revolution against the parties propagating this corruption. There is a possibility of a change passing through chaos and order being set after the consequences of a disaster or man made catastrophe. The situation is really challenging in India and not many are serious in finding a solution although everyone talks and blames. The problem needs an immediate solution by the involvement of all concerned by action. What we need is insured leadership.

Teach them Fishing, Do not Feed them Fish
abedmadi, Coach, Palestine, State of, Member
Coach them to be honest with themselves, to invest in their resources according to the priorities of their needs, exchange experiences you have with them.
Be a coach to them; not a leader.
And don’t forget the privacy of their belief, religion, culture, etc.

Constitutions Allowing Presidents to Run Multiple terms in Office
Thato Fredrich Peloentle, Coach, Botswana, Member
Constitutions of most developing countries are amended to allow presidents to run (several) extra terms in office. Often they are amended to satisfy the master and the associates. In most cases, citizens do not have constitutional authority over their leaders and decisions affecting them. The leaders treat state property as though it was theirs and regard the people as mere tenants who cannot ask questions.