Wednesday, 24 September 2003

CORRUPTION SCANDALS DOG CENTRAL ASIAN LEADERS

Published in Analytical Articles

By Stephen Blank (9/24/2003 issue of the CACI Analyst)

BACKGROUND: An ongoing trial in New York looks set to implicate Kazakhstan’s President Nursultan Nazarbayev for corruption and bribery charges relating to the energy industry in Kazakhstan. Similarly in Uzbekistan, Western press revelations emerging out of the contest for custody of the grandchildren of President Islam Karimov by his daughter Gulnara in a New Jersey court reveal an astonishing accumulation of wealth by her through her or her father’s power over the state economy. Likewise, a New York court case is presently implicating Azerbaijan’s State Oil Company and potentially the leadership in that country in similar scandals.
BACKGROUND: An ongoing trial in New York looks set to implicate Kazakhstan’s President Nursultan Nazarbayev for corruption and bribery charges relating to the energy industry in Kazakhstan. Similarly in Uzbekistan, Western press revelations emerging out of the contest for custody of the grandchildren of President Islam Karimov by his daughter Gulnara in a New Jersey court reveal an astonishing accumulation of wealth by her through her or her father’s power over the state economy. Likewise, a New York court case is presently implicating Azerbaijan’s State Oil Company and potentially the leadership in that country in similar scandals. Most cases relate to the misuse of state revenue, in countries where the distinction between state revenue and corruption is often absent. This phenomenon should not be thought of strictly as a Muslim or Central Asian one. Virtually every post-Soviet government is mired in official corruption, e.g. in the case of Ukraine and Russia not only in energy contracts, but also in the sale of weapons and defense technologies, much of which receipts go to wholly unaccountable political slush funds or personal funds under the control of the President. Similarly the end-users of these weapons, a requirements of contracts, are often faked with the result that weapons go to rogue states, insurgents, terrorists, or dictators without little or no accountability. Thus the enormity of state corruption and the accompanying belief of high-ranking officials that they need not account to anyone are among the major causes for the low level of state legitimacy and public participation in government. In many cases government in these republics is not all that different from organized crime, and the criminal penetration of the regime, whether in terms of corruption by officials or by drug runners and the like who then seek protection, either by bribery or by election to high office, is commonplace. But the costs to democracy, stability, security and prosperity go beyond the deprivation of the people of their economic assets or of the substitution of short-term personal gain for long-term productive investment. Indeed, the costs go even beyond the inherent corrosion of legitimacy endemic in places of large-scale corruption.

IMPLICATIONS: It is not only that large-scale corruption undermines both the domestic and international legitimacy of the regime in question, or its economic health. Nor is corruption’s harm limited to the fact that it replaces politics with cronyism, patronage, criminality, and often a large degree of violence as has been the case throughout the entire post-Soviet space. Not only is the law and the rule of law made a mockery by this spectacle, the government’s ability simply to administer the country or to defend itself also comes into question. Thus throughout the Chechen war, the rebels have gotten their weapons from Russian soldiers who are themselves the victims of unpunished corruption and therefore replicate this kind of anomic behavior as well. Moreover, the resources with which to reconstruct Chechnya or to govern other parts of Russia or other former Soviet republics are lacking because they have long since been stolen and remain unaccounted for. Official corruption on a large scale undoubtedly is responsible for all these pathologies. But in the Central Asian and South Caucasian instances, there is another aspect to the revelation of large-scale corruption which could prove of consequence and which has hitherto been overlooked. Because these regimes are based on corruption, when a succession comes, candidates will be evaluated on the basis of whether or not they can keep the “gravy train” flowing, much more than any concept of national interest. Therefore revelations of corruption in western media or courts will contribute to eroding the legitimacy of the Karimov, Aliyev, and Nazarbayev families, and they will raise doubts among other members of the elite in these countries, and perhaps similarly in other countries as well, as to the viability of letting them continue to run the show. Where corrupt elite factions are in fact ruling the country, their paramount concern is the stability of their “rents”. If that is called into question, the risk is apparent that they will resort to violence. The succession to Boris Yeltsin in 1999 was clearly a case in point because his “family” launched a war against Chechnya, among other reasons, to secure their hold on official largesse and corruption. Therefore in Central Asia and the Caucasus, further public revelations about the extent of official corruption in the family of the ruling class can indeed trigger elite instability, popular unrest, or both. In either case, it would not be surprising to find an outbreak of political violence revolving around competing claims to power and thus to wealth. Such manifestations can only further destabilize and imperil weak states as it is unlikely that this political violence can be confined to one state. Again, Chechnya is a case in point, as it has repeatedly threatened to engulf Georgia as well.

CONCLUSIONS: Undoubtedly corruption charges will be denied or rebutted as being political. And indeed, the truth of accusations should not be taken for granted, given that there are foreign communities, either of exiles or of NGOs, who have an interest in discrediting the regimes accused of corruption. But these charges are political in a deeper and more dangerous sense because they can contribute to the further degradation of political life in their host countries as elites and/or masses are moved to fight more openly and therefore more violently for power and access to the spoils thereof. Ironically, the charges of corruption, however well-founded they may be, may not lead to better governance in the short term but to something worse or at least to a continuation of the same phenomenon – albeit with different players. Since corruption is endemic to politics everywhere, it would be naive to imagine it could be rooted out of new states with no tradition of the rule of law, public service, or the national interest. Yet the campaign to expose large-scale official malfeasance must go on lest it lead to a failing state, an all too likely a phenomenon as Africa’s experience indicates. The dilemma for those who would expose this corruption then becomes multiple: what do they achieve by doing so, and can they put in place remedies and people who will not lead the next generation of reformers to re-enact the same drama a second time or who will not lead the post-Soviet regimes into the dead end so visible across so much of Africa?

AUTHOR BIO: Professor Stephen Blank, Strategic Studies Institute, U.S. Army War College, Carlisle Barracks, PA 17013. The views expressed in this article do not in any way represent those of the U.S. Army, Defense Department or Government.

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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