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Political Patronage and Payments

Published: 
Sunday, August 5, 2018

Malaysians, during their struggle for independence from Britain, donated their jewellery, money and valuables to the State. To pull their country out of economic crisis in the late 1990s, South Koreans lined up to donate their wedding bands. Nik Shazarina Bakti, a 27-year-old, recently launched a private crowdfunding initiative to help relieve Malaysia’s debt crisis. She raised around $3,500 before the government stepped in.

When Malaysian Prime Minister Mahathir Mohamad unexpectedly won his bid for office in May 2018, he pledged to find funds that went missing from Malaysia’s 1MDB - a strategic development company established to drive initiatives for long-term economic development by promoting foreign direct investment in energy, real estate, tourism and agri-business.

The new Prime Minister’s first priority is to get the country’s $250 billion worth of debt under control. To do this, he is emulating the youthful Nik Shazarina Bakti. In imitating Bakti, the government launched a new ‘Malaysia Hope Fund’ that raised 7m Malaysian ringgit (US$1.8m; £1.3m) within the first day of its existence using crowdfunding. It is certainly an innovative way to cut national debt. Total recovery using this method alone is unlikely, given the scale of the obligation and the long distance to go before recuperation.

In the Kingdom of Jordan, the problem of national debt is identical, but the aetiology of the disease, in this case, is tax evasion, not missing money.

In Jordan, the citizens did not donate their nuptial bands like the Koreans and Malaysians. They chose the barricade instead. Tax increases and austerity measures were met with demonstrations. Police fired tear gas and blocked roads in the capital Amman to stop protesters from getting close to the cabinet office. The protesters claimed that the new tax bill backed by the International Monetary Fund (IMF) trampled on the poor. The King called for compromises from all sides. The people called upon the King to dismiss Prime Minister Hani Mulki and held vigils near the cabinet office. King Abdullah intervened and implemented a freeze on fuel prices to stem the fury of the people.

The government claims that it needs the money to fund public services and that the new tax bill will guarantee that higher income earners will pay higher taxes. Earlier this year, the sales tax was increased and bread subsidies were scrapped as part of a plan to cut the country’s debt and to get Jordan’s economy ‘back on track’ by 2019. The King laments that the worsening wars in Syria and Iraq have impaled Jordan’s economy.

In Madrid, Prime Minister Mariano Rajoy was swept from office following a bruising debate and a no-confidence vote against him in the parliament, brought on by a slush-fund scandal swirling around his party.

The ouster was unprecedented in Spain’s modern democracy.

The two-term, centre-right Rajoy was replaced by a leader of the opposition, Socialist Workers’ Party, who argued that corruption involving the conservative governing party made Rajoy unfit to lead.

The vote to remove Rajoy from power was 180 to 169, with one abstention. It needed 176 votes to pass. A penitent Rajoy accepted the decision of his peers.

Corruption probes that began in 2014 have reached the highest levels of the Brazilian government and corporate elite, implicating President Michel Temer, former presidents, cabinet officials and senators.

Operation Car Wash and overlapping investigations have led to prison sentences for executives, politicians, mass layoffs and billions of dollars in fines.

In April 2017, Odebrecht was ordered to pay fines totalling $2.6 billion to authorities in Brazil, Switzerland and the United States after admitting to paying officials in twelve countries approximately $788 million in bribes. President Pedro Pablo Kuczynski of Peru resigned from office on March 21, 2018, amid allegations linked to Odebrecht.

Meanwhile, former Brazilian President Luiz Inacio Lula da Silva, who surrendered in April 2018 to federal authorities to begin serving a 12-year prison sentence, maintains that he is a presidential candidate for the October 2018 elections.

Paradoxically, the imprisoned, Lula, who pulled millions out of destitution is crushing his rivals in presidential polls. The Global Risks Report 2017 by the World Economic Forum and the Global Catastrophic Risks 2017 report by the Global Challenges Foundation both catalogue an impressive list of major threats to human survival.

Conjointly, they lift a large lantern in the daylight over an abysmal need for schools to educate for ethical leadership.

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