Corruption in Latin America: destruction or opportunity?
Estimated reading time: 2 Minutes
In these “orange times of terror”, Latin America has some more important issues to focus on, rather than spend all its energy and efforts dealing with Trump and his distinctive foreign policy in the region.
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Photo via America 2.1[/caption]
Only a few months after the ‘Panama Papers’ controversy, a new corruption scandal has emerged. Odebrecht, Latin America´s largest construction group, is becoming famous for creating one of the biggest bribery machines in corporate history. Corruption is, of course, nothing new in Latin America. However, last December, Brazil reached the largest anti-corruption settlement in the history of the country, where this company revealed that over the past 20 years it had paid nearly US$800 million in bribes related to infrastructure and engineering projects in about a dozen countries such as Argentina, Panama, Chile, Peru, Colombia, the Dominican Republic and its home Brazil (among others).
Odebrecht is not the only Brazilian company who is spending money on bribes to increase its portfolio in Latin America; other companies have been executing similar plans. Nonetheless, Odebrecht has certainly taken this to a new level. According to accusations the company would have financed political campaigns and directly bribed heads of state in Peru, Chile and Colombia. In the specific case of Peru, a judge ordered an international arrest warrant for the former president Alejandro Toledo associated with the Odebrecht case.
Beyond the figures, discovering that one of the most successful companies in Latin America led such a crime and has, for so long, been ‘exporting’ the corruption model to many countries has shocked the region.
Transparency International, a global civil society organisation, has recently published the 2016 Corruption Perception Index, where 176 countries and territories are assigned a score between 0 (highly corrupt) and 100 (very clean). Scores below 50 indicate countries unsuccessfully tackling corruption. In the case of Latin America, the average score is 44. Even if this average score doesn’t seem all that low, it is relevant to point out that twenty out of thirty countries are below 50 (the highest-scoring country, Uruguay, scored 71, while the lowest-scoring country, Venezuela, scored 17).
These results are not new, but the Odebrecht scandal has certainly put corruption in the spotlight and this should be recognised as an opportunity rather than defeat. 2017 should mark the start of a shift towards more active enforcement by the authorities in response to these public demands. Furthermore, this should be taken as an opportunity to act against corruption as a region. Brazil's exemplary settlement with both the US Department of Justice and the Swiss authorities should be followed by other countries, marking the beginning of a new cooperation era within the region, implementing new schemes of information and judiciary collaboration.
But the challenge goes beyond law enforcement. Latin Americans should take the opportunity to introduce a social and cultural change. Corruption is not only fought in courts; social punishment has been proven to be more effective. Understanding, recognising and rejecting corruption should be promoted and encouraged by citizens, institutions and companies; it should be discussed in schools and universities, shared with families and friends and adopted as a set of values and principles if we really want to bring about sustainable change.
Silvana Amaya is an alumna of the Blavatnik School of Government (MPP Class of 2015).
[caption id="attachment_8647" align="alignnone" width="904"]
Photo via America 2.1[/caption]Only a few months after the ‘Panama Papers’ controversy, a new corruption scandal has emerged. Odebrecht, Latin America´s largest construction group, is becoming famous for creating one of the biggest bribery machines in corporate history. Corruption is, of course, nothing new in Latin America. However, last December, Brazil reached the largest anti-corruption settlement in the history of the country, where this company revealed that over the past 20 years it had paid nearly US$800 million in bribes related to infrastructure and engineering projects in about a dozen countries such as Argentina, Panama, Chile, Peru, Colombia, the Dominican Republic and its home Brazil (among others).
Odebrecht is not the only Brazilian company who is spending money on bribes to increase its portfolio in Latin America; other companies have been executing similar plans. Nonetheless, Odebrecht has certainly taken this to a new level. According to accusations the company would have financed political campaigns and directly bribed heads of state in Peru, Chile and Colombia. In the specific case of Peru, a judge ordered an international arrest warrant for the former president Alejandro Toledo associated with the Odebrecht case.
Beyond the figures, discovering that one of the most successful companies in Latin America led such a crime and has, for so long, been ‘exporting’ the corruption model to many countries has shocked the region.
Transparency International, a global civil society organisation, has recently published the 2016 Corruption Perception Index, where 176 countries and territories are assigned a score between 0 (highly corrupt) and 100 (very clean). Scores below 50 indicate countries unsuccessfully tackling corruption. In the case of Latin America, the average score is 44. Even if this average score doesn’t seem all that low, it is relevant to point out that twenty out of thirty countries are below 50 (the highest-scoring country, Uruguay, scored 71, while the lowest-scoring country, Venezuela, scored 17).
These results are not new, but the Odebrecht scandal has certainly put corruption in the spotlight and this should be recognised as an opportunity rather than defeat. 2017 should mark the start of a shift towards more active enforcement by the authorities in response to these public demands. Furthermore, this should be taken as an opportunity to act against corruption as a region. Brazil's exemplary settlement with both the US Department of Justice and the Swiss authorities should be followed by other countries, marking the beginning of a new cooperation era within the region, implementing new schemes of information and judiciary collaboration.
But the challenge goes beyond law enforcement. Latin Americans should take the opportunity to introduce a social and cultural change. Corruption is not only fought in courts; social punishment has been proven to be more effective. Understanding, recognising and rejecting corruption should be promoted and encouraged by citizens, institutions and companies; it should be discussed in schools and universities, shared with families and friends and adopted as a set of values and principles if we really want to bring about sustainable change.
Silvana Amaya is an alumna of the Blavatnik School of Government (MPP Class of 2015).