Cost of corruption rises for donor-dependent Kenya

After Parliament kills antigraft bill, IMF freezes aid to Kenya's sputtering economy.

Morris Walunywa is unemployed.So his older brothers, who wanted to help find him a job at the prison, did the natural thing: They pooled their meager savings of $65 and bribed the prison's chief officer to give Mr. Morris a job. The officer pocketed the money, promising to enroll Morris. But when the list of recruits was later posted, it didn't include Mr. Walunywa's name.

"This is normal. Everyone is corrupt, and we play by those rules," says eldest brother George Walunywa. "You cannot expect anything here without a kitu kidogo.

In Swahili, kitu kidogo means "a little something." The culture it reflects is endemic in Kenya. A kitu kidogo is required by everyone from school headmasters to politicians. But the problem appears to be catching up to Kenya, which is regularly ranked as one of the 10 most corrupt countries in the world.

Last month, a proposal came before Parliament that would have established an independent anticorruption authority, and entrenched it in the Constitution. President Daniel arap Moi personally showed up in the Parliament house to lobby for it. The International Monetary Fund and World Bank - tired of having their funding siphoned into personal accounts - had conditioned $317 million in aid on the passage of the bill. But the bill failed, because reformers said it was not strict enough.

It was just the latest high-profile failure to handle a problem that analysts say could devastate Kenya's economy, the most important in eastern Africa.

Kenya's donor-dependent economy is already plagued by dwindling private investment and increasing capital flight. The economy is in the worst recession since its 1963 independence, and last year actually shrank by 0.3 percent. The loss of the IMF's $317 million, along with the investor confidence that comes with the IMF endorsement, is a massive blow to the economy.

"Failure to stem corruption will lead Kenya down a slippery slope," warns Mehdi Drissi, a French diplomat in Nairobi. "The IMF's departure will be followed by an exodus of multinationals and professionals. Infrastructure will further deteriorate, doctors will leave, the level of teachers in the education system will go down, and common people will become more demoralized."

But fighting corruption is proving to be difficult - in great part because those taking on the fight are the very same people benefiting most from corruption.

"The linkage here between power and wealth is very, very clear," says John Githongo, head of the Kenya chapter of Transparency International, a corruption watchdog group. "The majority of the richest people in this country are all ex-politicians or ex-soldiers ... which means that when you are messing with corruption, you are messing with the leaders."

The original Kenya Anti-Corruption Authority (KACA) was created in 1997, soon after the Public Accounts Committee revealed that $10 billion in public funds was lost between 1994 and 1995, including funds from the Central Bank, the state-run postal and telecommunications corporation, and Kenya Railways.

KACA was given a mandate to investigate allegations of corruption - which turned out to be no mean task.

KACA's first director, John Harun Mwau, was dismissed after less than a year, and found himself facing a judicial tribunal looking into his competence soon after.

Subsequent directors found working conditions just as hard, and each one claimed that Attorney General Amos Wako was blocking their attempts to prosecute well-connected suspects.

Mr. Wako denies those claims, arguing that he never stopped a sound case. "Prosecution is only as good as the investigation," he said last week, speaking at a seminar organized by Transparency International.

But last December, the high court declared the whole organization illegal, saying that certain powers bestowed on the authority conflicted with those of the attorney general.

It said the only way to re-create KACA was to amend the Constitution - which is what last month's bill attempted to do.

A broader question under debate here is how - and how quickly - to proceed with reforms. While few people would publicly dispute the need for reform, many Kenyans felt the bill last month was ill-conceived, and that a related bill with an amnesty provision would have let the worst offenders go unpunished.

According to opposition leader Mwai Kibaki, donor funding would do little for Kenya if the anticorruption agency were weak. He argued that there is no use passing a bill that does not create a proper infrastructure for fighting corruption, "because if aid were renewed under such circumstances, it would be misused anyway."

Members of the opposition also criticized the IMF's stance, pointing out that the improved KACA would have had no more power than the old one - and questionedwhy the international organization was backing it.

Samuel Itam, the IMF's senior representative in Nairobi, defended IMF position, saying that it was important to start somewhere. "We believe the reform process is important for Kenya, and a fundamental pillar of that is governance," he told reporters, adding that while perhaps not perfect, the bill would have been a "step in the right direction."

"I know that now the situation will be even worse, but I am ready for that - if only one fineday we will have a real fight against corruption and if on that dayit will be possible to punish the big corrupt people," states George Walunywa, who was against the bill. "Only then can this country be a fair country."

The bill, says local political commentator Peter Wanbali, was disingenuous, for Moi "has no inclination to start the difficult task of fighting corruption at this point in his career."

But one high-level Western diplomat says the bill's defeat has serious ramifications for the future. "If Moi does not have funds coming in from the IMF prior to elections [next year], he will take funds from elsewhere to finance the elections - further bankrupting the country."

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