Corruption seems to be common in all very poor countries. It is one of the factors that feed the cycle of poverty – when donors see their aid syphoned off into private hands, they back away, and the poor remain poor.
Recently, donor countries have linked their donations to evidence of progress on anti-corruption measures. The Tanzanian government has been working on anti-corruption legislation that will provide better conditions for accessing information, improve the possibilities of sanctioning persons found guilty of corruption, and protect whistle blowers.
This legislation was due to be tabled in 2006 but the deadline was missed. Because of this, Denmark slashed 20% ($3.9 million) of its aid pledge to the Tanzanian government for budget support during the 2007/08 period, saying it was concerned about the delay in dealing with graft.
Denmark had granted general budget support to Tanzania of up $103.8 million for the period of 2006 to 2010. It was agreed by the two countries that 20% of the support be linked to specific achievement indicators of tabling anti-corruption legislation. The government says the Bill will be tabled in the House this year. That may help to ensure that they don’t have another 20% slashed next year!
The importance of anti-corruption legislation has been underlined by a news report in The Guardian this week. The report notes that in 2002 the UK's biggest arms supplier, BAE Systems, secretly paid a $12m commission into a Swiss account in a deal which led to Tanzania buying a controversial military radar system.
A Tanzanian middleman, who has a long-standing relationship with military and government figures, has admitted that the sum was covertly moved to a Swiss account by BAE Systems, which is under investigation by the British Serious Fraud Office.
The School of St Jude is run to benefit very poor children. It works hard to ensure that every dollar donated is used to provide excellent education for these bright children. Careful supervision of expenses and rigorous accounting ensure that money is well-spent. See the 2006 Annual Report on the school website.