Senegal’s new leadership offering a vital beacon for international anti-corruption efforts

In a landmark moment for the future of Senegal’s democracy, newly-elected president Bassirou Diomaye Faye was sworn in to office on 2 April, ending three years of political turmoil in dramatic fashion.

Along with his mentor, Prime Minister Ousame Sonko, Faye was part of the imprisoned political opposition granted amnesty by outgoing President Macky Sall just days before the late-March vote. Between their allegedly politically-motivated arrests last year and Sall’s attempted 10-month delay of the presidential election in early February – both of which sparked mass street protests – Senegalese democracy seemed on the verge of crisis after long serving as a regional bastion of stability.

Yet Faye has projected a determined face to bring his country back from the brink, outlining a bold anti-corruption vision to address the country’s significant economic challenges and provide hope for its largely-unemployed youth – a promising direction that the rest of the world should take inspiration from as weak anti-graft progress continues to hinder development efforts across the globe.

MENA’s uphill investor confidence battle

Published in January, Transparency International’s (TI) Corruption Perception Index 2023 spotlights the Middle East and North Africa (MENA) as a region of concern, with three countries – Syria, Yemen and Somalia – ranking in the bottom five. With its genuine desire for change impeded by weak political and anti-graft structures, Iraq is broadly emblematic of the region’s current situation.

Under the aegis of the UNDP-led, EU-funded ‘Anti-Corruption and Arbitration initiatives’ (ACAI), the Iraqi government and Kurdistan Regional Government of Iraq (KRG) have been working with international experts to progress good governance reforms and attract foreign investment. While ACAI’s legislative and judicial capacity-building efforts in anti-corruption and commercial dispute resolution are setting Iraq on a promising path, deep-seated issues in both governments remain significant barriers.

The ongoing dispute between Kuwaiti logistics firm Agility and the Iraqi Government represents the very issues ACAI aims to root out. In 2011, Agility invested $380 million in Kurdish telco Korek Telecom, only for Baghdad’s Communications and Media Commission (CMC) to annul its shareholding some three years later, completing the expropriation in 2019 by transferring Agility’s shares to Korek founder and member of the Kurdish region’s ruling family, Sirwan Barzani.

The CMC’s decision has notably drawn corruption allegations involving Barzani and his associates bribing its members with luxury London real estate. Left to file a claim with the World Bank’s ICSID tribunal in 2017, Agility’s long-running case has survived an initial rejection, with an ICSID committee overturning the previous decision in February, thus offering the company an opportunity to have its claim heard by a new arbitration panel. If Iraq's leadership aims to sincerely embrace ACAI principles and draw in investment, it is crucial for them to promptly address and resolve occurrences of public corruption.

ASEAN’s democratic backsliding stalling anti-corruption drive

Further east, the story is much the same, where ASEAN’s considerable growth potential in the coming years is threatened by lagging anti-corruption interventions. According to Transparency International, an authoritarian trend is largely responsible, ranging from the military junta of Myanmar to the subtler democratic backsliding in countries including Indonesia, which has hollowed out its anti-corruption commission and compromised the integrity of its whose constitutional court.

This governance downturn has already begun playing out in the Indonesian mining sector, the jewel in the crown of its economic ambitions. As the world’s largest producer of nickel, a vital component for EV batteries, Jakarta has actively been seeking foreign investment in nickel mining and higher-value downstream activities.

However, multiple government officials either face trial or investigations for alleged bribery offences concerning the issuance of nickel mining permits, including former Energy Ministry director general Ridwan Djamaluddin and governor of North Maluku, Abdul Ghani Kasuba. Among the mining executives caught up in the scandal is Harita Nickel director Stevi Thomas, who allegedly offered Kasuba $60,000 to secure permits for mining and associated road construction.

TI Indonesia notably spotlighted “frequent corrupt practices” in the country’s nickel industry, adding that the Indonesian government has failed to take direct action to address a problem that is damaging its economy and causing mounting concern in foreign investors.

Latin America’s turn for the worse

While anti-corruption efforts have failed to achieve lift off in ASEAN, a bout of significant progress in Latin America last decade has perversely triggered a backlash. Corruption across the region has soared since 2020, crushing the hope sparked by Brazil’s sweeping Lava Jato (Car Wash) investigation in 2014 and the similar efforts it inspired in neighboring countries. Brazil and Peru are among the countries in freefall, while Guatemala, Honduras and El Salvador have all disbanded their respective anti-corruption and Mexico is potentially set to follow suit.

In this vacuum – exacerbated by Latin America’s leading anti-corruption officials fleeing to the United States – the Biden administration has stepped in to help tackle the returning corruption by establishing a dedicated Justice Department Task Force, a State Department coordinator role and strict investment standards to counter the local corruption that China is actively encouraging as it deepens its economic footprint in the region.

Washington’s investigative efforts in Latin America have notably seen Illinois-based medical waste services multinational Stericycle agree to an $84 million fine for the bribery of hundreds of public officials in Brazil, Mexico and Argentina to secure and maintain public business contracts. Capitalizing on the weak enforcement culture, Stericycle’s predatory practices generated over $20 million in profits while further undermining the region’s investment climate.

Although its specific manifestations vary by region, corruption and its economic impact are on the rise globally. As President Obama summarized during his first official trip to Africa, “development depends upon good governance,” adding that the continent “doesn’t need strongmen” but “strong institutions” – a formula that new Senegalese President Bassirou Diomaye Faye has encouragingly taken to heart. Moving forward, governments must follow Fay’s lead if they hope to deliver on their growth ambitions.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.