Corruption

The Democratic Republic of Congo’s bad luck is to be rich in resources. Foreign investors are pouring billions of dollars into large extractive projects such as mines and hydropower dams. In a classic case of the resource curse, these projects are not promoting the country’s long-term development, but attract short-term profiteers, conflict, and corruption. In the latest example for this trend, the World Bank has just reported huge delays and cost overruns for the rehabilitation of the Inga 1 and 2 hydropower dams. Other projects are being swallowed by the morass of Congo’s resource curse at the same time.

Meles Zenawi and Italy's Foreign Minister inaugurate Gilgel Gibe 2

On Jan. 13, Ethiopia's Prime Minister Meles Zenawi inaugurated the Gilgel Gibe 2 scheme, the country's biggest hydropower project. "It is possible to speed up development without polluting the environment," Zenawi proudly declared as he cut the ceremonial ribbon. Yet this was wishful thinking.

Hingol National Park (Wikimedia Commons)

Pakistan’s government is currently considering building the Hingol Dam, a $400 million irrigation dam in the mountains of Balochistan Province. The project is controversial because it would impact a national park and a centuries-old temple which is revered by the region’s Hindu population. A few weeks ago, I got an e-mail from an engineering firm in Pakistan. Out of the blue, the firm offered me the contract to build the Hingol Dam and four similar projects. The offer came as a surprise because working for International Rivers, I am rather skeptical of such projects. I may pass as a dam expert, but have never built such a structure before.

(Lucas the Elder Cranach)When there is a chance to push a big loan out the door, some people just can’t say no. Every World Bank President since James Wolfensohn has committed to fight the cancer of corruption. For more than ten years, the Bank has talked the talk, but has not walked the walk. In April, an internal evaluation gave the institution the lowest possible grade for its anti-corruption efforts. As if to prove the point, the World Bank is now considering support for a multi-billion dollar project which squarely violates its procurement guideline and shows all red flags of corruption: the Gibe 3 Dam in Ethiopia.

 

Sen. José Sarney Receives Aluminum Eagle from President of Alcoa (Archive  )

José Sarney rose to power in his home state of Maranhão during Brazil's military dictatorship. He ascended to the presidency of Brazil in 1985 when Tancredo Neves, the president-elect, died on the eve of his taking office. Now, his position as president of the Senate, where he wields power second only to that of Lula, is threatened by revelations of abuse of power in secret financial transactions favoring family members and political cronies, and even leaders of his own party are calling for him to step down.

Sarney's fate is of critical importance for the Brazilian dams industry, for Sarney has made Brazil's dam building plans in the Amazon and the promotion of the aluminum industry his personal fiefdom. Sarney was reportedly instrumental in Alcoa and Billiton's decision to base their aluminum plant in São Luís, capital of Maranhão. And, Sarney helped the companies arrange publicly subsidized energy from Tucuruí Dam.