Corruption in the Defence Sector

By its nature the defence sector has always been a high-risk area with regards to corruption: However, a report last week from UK think-tank Transparency International brought the extent of the problem into stark clarity.

Defence is a sensitive and complex field, which requires politicians, military leaders and the defence sector to work closely together – unfortunately, it also means that corruption is an ever present temptation. The immense amounts of money do little to help this issue: neither does the fact that business is often conducted behind closed doors, necessitated by national security interests.

We could be forgiven for assuming that given the high-risk nature of the sector governments would be extra vigilant of any threat of corruption. Unfortunately, last weeks report suggests that we couldn’t be more wrong.

Transparency International’s Government Defence Anti-Corruption Index examines the anti-corruption efforts of 82 countries, which accounted for 94% of global military expenditure in 2011, a frankly enormous $1.6 trillion USD. Each country was graded between (A) – low risk, to (F) – critical risk, and were measured against 77 indicators across 5 areas covering politics, finance, personnel, operation and procurement.

The news isn’t good. Over 70% of the countries were criticized for failing to adequately protect against corruption in the defence sector, with only 15% displaying ‘comprehensive, accountable and effective’ political oversight of the defence sector. In over half the cases Transparency International found ‘minimal evidence of scrutiny of defence procurement.’ Only 2 countries, Australia and Germany, were awarded the top tier Grade A.

Some countries were singled out for particular criticism. A number of countries in North Africa and the Middle East were rated particularly badly, all deemed at high or critical risk of corruption. Egypt came in very last of all the 82 countries – at the bottom of a class of the 9 lowest rated which included Algeria, Cameroon and the Democratic Republic of Congo.

Also worrying was the number of high-level arms importers and exporters that were rated poorly on the list. Israel, Russia and China, all major arms exporters, were deemed at high risk, while top arms importers India, the United Arab Emirates and Singapore received equally poor ratings.
Corruption in the defence sector is a problem for several reasons. The huge amounts of money involved mean that if a defence budget is poorly spent, or if it’s diverted into the pockets of the wrong people, enormous quantities can be wasted. Transparency International estimate the global cost of corruption in the defence sector at USD $20 billion per year – and that’s a conservative estimate. To put it into perspective, this is roughly the same sum pledged by the G8 to tackle world hunger in 2008. Not a happy statistic.

None of this is good news – defence spending will always be high in the developed world, and the recent conflicts in Libya, Syria and Mali suggest that it won’t be falling any time soon. Likewise, spending in the developing will likely rise as well. Unless positive changes are made, the problems will continue to worsen – “corruption in defence is dangerous, divisive and wasteful: every one pays the cost” says Mark Pyman, Director of Transparency International UK’s Defence and Security Programme.
What can be done? Today, Transparency International released a report focusing on 19 countries in the Middle East and North Africa, offering specific recommendations for combatting corruption. In general, they calls for stronger legislative controls and oversight, as well as large public contracts to increase openness.

But we, the general public, can also play a role. As citizens we have a responsibility to hold our leaders to account and demand better public accountability. We must be made aware of how our countries defence budgets are being spent. This report should be a wake up call for politicians and the public alike: a warning that we ignore at out peril.

BY: Tom Clarke