Capital Ethiopia Newspaper

Hyper inflation could set off rampant corruption: Survey cautions

The rise in the cost of living could undermine the government’s efforts to clamp down on corruption and corrupt public servants, warns a survey commissioned by the anticorruption watchdog. 

Inflation slowed during recent months but has stood at a raging 32 percent during January. This trend in the cost of living is a number one stressor for the public, according to a national survey by the Federal Ethics and Anti-corruption Commission (FEACC).

Food prices have been going upwards for more than a year burdening consumers since a September 2010 17 percent devaluation of the birr against major foreign currencies. Though it is a slight ease on consumers, the latest month’s drop should help urban consumers that spend about 60 percent of their income to buy food.

A Harvard study says there is a direct relationship between corruption and inflation. “We document a positive relationship between corruption and inflation variability in a sample of 75 countries over 14 years,” reported the Harvard Business School 2004 study entitled Inflation and Corruption.

Among 6,518 people polled in the national corruption perception survey, most placed the cost of living as a major concern while they put corruption at a distant seventh on a list of national problems. However, researchers of the Kilimanjaro International, a firm which conducted the survey for FEACC, say the direct link between the rising cost of living and corruption should be noted.

“As the cost of living soars, public servants will be increasingly tempted to engage into petty corruption in exchange for public service. Thus, curbing inflation should be seen also as an effort of combating corruption,” said the Kilimanjaro International group in its recommendation.

The corruption perception survey offered 22 socio economic factors for people to rank as concerns; next to inflation emerged unemployment.

The federal government unsuccessfully targeted holding inflation at 4 percent in the five year economic period embarked on July, 2010.

According to the corruption perception survey, most polled say the level of corruption has slowed or stopped to where it was when FEACC was set up ten years ago; a result researchers say recognizes the corruption watchdog’s decade long efforts.

Bad news for FEACC however is most of the 3,400 households say they are afraid to take part in combating corruption fearing reprisals. This indicates that most people feel unprotected by FEACC if they provide a tip for investigation against corruptors.

“There needs to be increased efforts to place mechanisms such us witnesses and whistleblower protections to encourage people to come forward to name corruption and corruptors,” said the survey in its recommendations and findings present on Tuesday, February 21, in a seminar that drew participants form FEACC, regional anticorruption commissions and civil societies.

Using for the first time a witness protection legislation approved last year, the corruption watchdog has shielded three people under a witness protection program in the first six month of the current budget year. A six month performance report of the commission says 18 people have asked for the protection during the period.

The national corruption perception survey, financed by the World Bank, also found that police, the judiciary, Ethiopian Revenues and Customs Authority and local administrations such as kebeles suffer from “deficit of trust” from the public which ranked the institutions as less competent than others. These institutions were also criticized ten years ago when a similar study was conducted to initiate the FEACC.