Readable in its original version in the Huffington Post here or below:
Wal-Mart is making the headlines with the FCPA corruption case it faces in Mexico. But anyone who has been on the ground trying to close business in countries such as Mexico, India, China, Russia, Venezuela, Nigeria and so forth knows corruption is a way of life.
Corruption is so entrenched in countries of weak governance that citizens of those nations are fully applying their entrepreneurial spirit toward non-law abiding activities. As my Brazilian employer often reminded me, “If you can’t change something, you have no choice but to join in.”
On the other hand, we have plenty of people (mainly politicians, attorneys, and academics) who have high moral standards and strongly believe corruption is wrong and thus must be eradicated by all means. Corruption is wrong, and it indeed harms the poor the most. But what is debatable and giving great grief to any international business developer is how we go about making the world a better place — and especially the lack of cohesion and drive found throughout the West in making it a better place.
Recently I sat on the plane next to a businessman from France who told me that the advancement of his company in the Middle East is going very strong. He was very proud of their new office in Tunisia and how it serves as a platform for doing business throughout the region. When I asked him about bribery and corruption, he told me point blank that of course his company pays bribes. There is no way around it, he told me. The culture and the business environment demand it. In his eyes, his company has no choice; his directors are going with the flow and being respectful of the local culture. “Listen,” he told me, “we are not there to change the world; we are there to create and deliver energy to billions of people who need it to get out of poverty.”
This conversation with my fellow traveler made me want to know more about the dichotomy found across the globe with regard to economic development and the tolerance of corruption: Will a better world come from the advancement of democracy and the eradication of corruption, or will it come from providing access to potable water, electricity, and technology to people who otherwise could not be heard, even if we have to pay bribes to do so?
My question led me to a lecture at Portland State University where Dr. Larry Diamond, a leading contemporary scholar of democracy studies and a Sr. Fellow at Stanford’s Hoover Institution, confirmed that, in his view and based on his lifelong study of failed states, it is the institutional deficit — the fact that politics is perceived as a self-serving tool, a right to loot–that causes countless governments to failure every year. Education (knowing how to read and write and apply judgment), followed by civic education, is what gives people the mindset needed to elevate one’s country and go beyond personal gain. Once citizens understand the mechanics of politics and how democracy tends to open opportunities for all, countries tend to be on their merry way. (Another great take on this comes from the World Value Survey Cultural Maps.)
Until the planet embraces democracy, we’re still confronted with the same dilemma: Should we sell to countries that have a culture of corruption? Rob Salkowitz, in his book Young World Rising: How Youth, Technology, and Entrepreneurship Are Changing the World from the Bottom Up, describes how having access to the Internet is allowing the “Net Generation” from weak and failed states such as Paraguay, Peru, Zambia, Uganda, etc., to bypass the corrupts with their business ideas and directly link to the outside world in search of opportunities. Thanks to technology, reliance on international organizations such as the World Bank, the International Monetary Fund, and USAID — whose aid is too often funneled and pocketed by the elite who interact with the IGOs — is no longer necessary.
My experience living and working in Latin America makes me bet that the company that brought wireless technology to Paraguay has paid its fair share of bribes to the local authorities. And it’s a fact that this moral concession is now allowing millions of people to have access to the world and apply their entrepreneurial spirit to create better opportunities for themselves and their compatriots, making us wonder if providing access to technology might be quicker and more effective than waiting for democracy to take roots in certain parts of the world.
The dilemma persists: Should the foreign company that perhaps brought wireless technology to Paraguay resist the bribe and say no to the business, delaying Paraguayans access to global business opportunities; or should have they “gone with the flow,” like my French traveler’s employer does in search of the better good?
It is now obvious that my question is of an ethical nature and grounded in the cultural values of the person who will answer it. In the United States, a country that is often perceived by others as the “police” of the world, we don’t hesitate to place embargoes on nations that behave in a way that does not align with our vision. We also created the Foreign Corrupt Practices Act, the strongest anti-bribery act in the world.
Other countries, including Canada, European nations, and Australia, tend to be more reserved when it comes to sanctions. Their cultural values make them believe that changes come from within and that an imposed resistance from the outside to corruption does not accomplish much. To those players, economic development and access to technology is proving (and confirmed at least in China) that there might be some truth to that.
