Corruption Scandals across Latin America Cause for Concern — But Reactions Show Promise for the Future

Since early March, protests and rallies across Brazil have called for the impeachment of President Dilma Rousseff. While Brazil’s stagnating economy and fiscal austerity are reason enough to cause such uproar, what has brought millions of citizens to the streets in over 150 cities within the past month is the scandal revolving around state-controlled oil company Petrobras. On the 6th of March the Brazilian Supreme Court authorised investigations of 34 incumbent politicians, the majority of whom belong to Rousseff’s ruling coalition, and their role in the scandal that entails a total of at least $3 billion in kickbacks, bribery and money laundering since the 1990s. While President Rousseff herself has been cleared from participating in this massive scandal, Brazilians are still calling for her impeachment given her position as chairman of Petrobras in the mid-2000s, which is thought to be when the corruption linked to the company was at its height. Her dismal approval rating of 13% reflects the populations’ growing intolerance for corrupt behaviour, more so than the country’s severely underperforming economy.

Image courtesy of Radio Interative, © 2015, public domain
Image courtesy of Radio Interative, © 2015, public domain

Brazil’s Petrobras scandal that has inspired widespread protests since March is far from an isolated incident in Latin America. In this year alone scandals have unravelled throughout the region. Wehave seen the suspicious murder of an Argentinian federal prosecutor Alberto Nisman mere hours before testifying against President Cristina Fernández de Kirchner regarding her alleged criminal activity in colluding with Iran to cover up the bombing of a Jewish community centre in 1994 resulting in 85 deaths. Peruvian Prime Minister Ana Jara was ousted after the media uncovered she had knowingly allowed the National Intelligence Directorate to spy on its domestic population. Perhaps most surprisingly, Chile, known as one of the least corrupt Latin American countries and the pride of international financial institutions, has also been racked with scandal as President Michelle Bachelet’s son resigned as head of a state charity following alleged influence peddling; the arrests of executives from a large financial group on charges of illegally funding the right-wing party, the Independent Democratic Union; and the investigation of a giant mining company run by former son-in-law of dictator Augusto Pinochet regarding suspicious payments to a variety of political figures. This all shockingly falls within just the start of 2015.

Latin American corruption has been characterised by fierce resistance and has frustratingly endured throughout its history. Colonial viceroys set the stage for endemic corruption that continues to persist with enormous economic but also social costs. Corruption deepens inequality, as the poor must pay bribes for access to the most basic services such as water and healthcare, making the most disadvantaged in society even more vulnerable. Anti-corruption platforms have been used by many Latin American politicians to come to power, such as Venezuela’s Hugo Chávez whose regime ironically worsened the situation for the country, playing on the populous’ exacerbation with the issue.

Expectations that democratisation and market liberalisation, manifested in the early 1980s, would eradicate corruption were met with severe disappointment. Democratisation actually created greater opportunity for corrupt behaviour as political hopefuls used party donations to secure coveted government seats via manipulation of loose campaign-financing laws. Meanwhile, economic liberalisation likewise offered new opportunities for financial gain as privatisation allowed for government officials to allocate contracts and privileged business stature to friendly societal elites. Huge inflows of money from increased drug trafficking beginning in the 1980s and the commodities boom in the early 2000s with the rise in oil prices provided yet further opportunities for money laundering and grand corruption. Such activity has become so pervasive that petty corruption is common custom when dealing with bureaucrats or the police in some areas; certain levels of corruption in developing countries are argued to be acceptable as small bribes are thought to increase efficiency and economic growth — the classic scenario of “greasing palms” to get things done. Latin America has experienced enormous growth in recent years, now a middle-income region of the world, yet two-thirds of states there fall in the bottom half of Transparency International’s Corruption Perceptions Index; only Chile, Uruguay, and Costa Rica stand out amongst their neighbours, yet as mentioned before even Chile is not exempt for the effects of corruption.

Public anger and indignation, however, such as that currently witnessed in Brazil, should not be taken as bad sign. Rather, hostility towards corrupt behaviour is a healthy sign that greater transparency in government is desired and that corruption has become simply unacceptable as Latin America continues to blossom. This move towards intolerance of corruption is perhaps indicative of a generational shift as relatively young democracies have evolved and grown into their institutions far enough that corruption can become a real priority on political agendas. As citizens become more educated and the region continues to grow richer with further economic development, honesty will become essential for governments to maintain legitimacy. The backlash against corruption scandals has been mirrored by strengthening institutions in Latin America. Evidence of this can be found in Mexico as its Congress continues to push a national anti-corruption initiative through that will encompass shared responsibility across a multitude of government bodies. The reaction to the Petrobras scandal is also promising for the future as it indicates the strengthening of Brazil’s government institutions aside from the executive; the independence of its judicial branch and federal prosecutor’s office, as mandated in the country’s constitution, has enabled the aggressive pursuit of investigating and prosecuting the business executives and politicians involved in Petrobras’ illicit activities. The role of technology can also be noted as a contributing factor in eradicating less corrupt behaviours; for instance, Bolsa Família’s payments are made electronically so that they undoubtedly and in-full value reach the intended recipients. Likewise, some areas are allowing driving licenses to be renewed online to cut-out petty bribes to local bureaucrats to receive such a basic service.

Some problems relating to corruption are likely to persist in Latin America for some time, especially in states such as Ecuador and Venezuela where freedom of the press remains an issue and given the fact that leaders are unlikely to criticise one another’s corrupt behaviour for fear of drawing scrutiny on themselves. However, public reactions to recent scandals across the region and mass mobilisations are encouraging signs that political leaders will have to answer to their constituents’ demands for honesty and transparency.

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