Kleptocracy

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This article is about the term for systematic corruption and thievery by the state or state-sanctioned corruption. For a state with ties or aid from organized crime syndicates, see Mafia state.

Kleptocracy, alternatively cleptocracy or kleptarchy, (from Greek: κλέπτης - kleptēs, "thief"[1] and κράτος - kratos, "power, rule",[2] hence "rule by thieves") is a term applied to a government seen as having a particularly severe and systemic problem with officials or a ruling class (collectively, kleptocrats) taking advantage of corruption to extend their personal wealth and political power. Typically this system involves the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service.


Characteristics[edit]

Kleptocracies are generally associated with dictatorships, oligarchies, military juntas, or other forms of autocratic and nepotist governments in which external oversight is impossible or does not exist. This lack of oversight can be caused or exacerbated by the ability of the kleptocratic officials to control both the supply of public funds and the means disbursal for those funds. Kleptocratic rulers often treat their country's treasury as a source of personal wealth, spending funds on luxury goods and extravagances as they see fit. Many kleptocratic rulers secretly transfer public funds into hidden personal numbered bank accounts in foreign countries to provide for themselves if removed from power.

Kleptocracy is most common in developing countries whose economies are based on the export of natural resources. Such export incomes constitute a form of economic rent and are easier to siphon off without causing the income to decrease.

Effects[edit]

The effects of a kleptocratic regime or government on a nation are typically adverse in regards to the welfare of the state's economy, political affairs and civil rights. Kleptocracic governance typically ruins prospects of foreign investment and drastically weakens the domestic market and cross-border trade. As kleptocracies often embezzle money from their citizens by misusing funds derived from tax payments, or engage heavily in money laundering schemes, they tend to heavily degrade quality of life for citizens.[citation needed]

In addition, the money that kleptocrats steal is diverted from funds earmarked for public amenities such as the building of hospitals, schools, roads, parks – having further adverse effects on the quality of life of citizens.[3] The informal oligarchy that results from a kleptocratic elite subverts democracy (or any other political format).[4]

Examples[edit]

In early 2004, the German anti-corruption NGO Transparency International released a list of what it believes to be the ten most self-enriching leaders in the past two decades.[5] In order of amount allegedly stolen USD, they were:

  1. Former Indonesian President Suharto ($15 billion – $35 billion)
  2. Former Philippine President Ferdinand Marcos (at least $10 billion by 1986,[6][7][8][9] equivalent to about $21.6 billion in 2014 dollars[10])
  3. Former Congolese President Mobutu Sese Seko ($5 billion)
  4. Former Nigerian Head of State Sani Abacha ($2 billion – $5 billion)
  5. Former Yugoslav President Slobodan Milošević ($1 billion)
  6. Former Haitian President Jean-Claude Duvalier ("Baby Doc") ($300 million – $800 million)
  7. Former Peruvian President Alberto Fujimori ($600 million)
  8. Former Ukrainian Prime Minister Pavlo Lazarenko ($114 million – $200 million)
  9. Former Nicaraguan President Arnoldo Alemán ($100 million)
  10. Former Philippine President Joseph Estrada ($78 million – $80 million)

The Russian president Vladimir Putin is alleged to be the "head of the clan",[11] whose assets are estimated at $200 billion.[12]

Sources have also shown that Egyptian President Hosni Mubarak stole up to $70 billion.[13]

In addition, other sources have listed former PLO Chairman Yasser Arafat as having stolen $1 billion to $10 billion; and Pakistani President Asif Ali Zardari to have received kickbacks on contracts and misappropriating public funds, siphoning over $2 billion to his Swiss accounts.[14][15][16][17][18]

Nursultan Nazarbayev is a head of the Kazakhstan ruling clan with $7 billion assets.[19]

The partially recognized state of Kosovo is also run by a kleptocratic regime, mainly formed of members from one of the country's largest political parties, Democratic Party of Kosovo. A report on the wealth of Kosovan politicians showed that despite their relatively low incomes as civil servants, a significant number had amassed personal wealth sometimes amounting to sums exceeding several million euros.[20] More recently, EULEX reported on a specific case where illegal payments of 1.4 million euros had been made between the Kosovan Ministry of Internal Affairs and the Austrian State Printing Company which had previously won a tender to print Kosovan passports,[21] and a former transport minister and current deputy-president of the ruling Democratic Party of Kosovo Fatmir Limaj was also arrested by EULEX together with six other suspects on charges of organised crime and embezzling at least two million euros.[22]

Former Argentine president Nestor Kirchner (deceased) never fully accounted for an estimated US$1 billion that went missing from the public purse of Santa Cruz province during his tenure as provincial governor.[23]

China's former prime minister, Wen Jiabao, left office in 2013 with his close relatives controlling assets worth at least $2.7 billion.[24] These revelations were censored in print and censored online in China.[25]

The term kleptocracy was also used to refer to the Russian economy soon after the Soviet collapse in 1991. The "democrats," led by Yegor Gaidar and Anatoly Chubais, freed prices in 1992 and unleashed hyperinflation before they privatized Russia's assets. Most Russian citizens lost their savings in only a few weeks. A few billionaire "oligarchs" amassed fortunes not by creating new enterprises, but by arbitraging the huge difference between old domestic prices for Russian commodities and the prices prevailing on the world market. Instead of investing in the Russian economy, they stashed billions of dollars in Swiss bank accounts. Experts estimate that as much as $15 billion left Russia each year as either capital flight or laundered money from illegal transactions.[26] Referring to Russia Daniel Kimmage also used the terms: "kerdocracy" ("rule based on the desire for material gain") or "khrematisamenocracy" ("rule by those who transact business for their own profit").[27] Fareed Zakaria also described Russia as a kleptocracy on a July 23, 2012 airing of The Daily Show.[citation needed]

Other terms[edit]

Demonstration banner with text: "Demokracie místo kleptokracie" (Democracy in place of kleptocracy). Peace rally in Brno for Real Democracy NOW, Moravian Square (cs), Brno.

A narcokleptocracy is a society in which criminals involved in the trade of narcotics have undue influence in the governance of a state. The term has its origin in a report prepared by a subcommittee of the United States Senate Foreign Relations Committee, chaired by Massachusetts Senator John Kerry.[28] The term was used specifically to describe the regime of Manuel Noriega in Panama. The term narcostate has the same meaning.[citation needed]

See also[edit]

References[edit]

  1. ^ κλέπτης, Henry George Liddell, Robert Scott, A Greek-English Lexicon, on Perseus
  2. ^ κράτος, Henry George Liddell, Robert Scott, A Greek-English Lexicon, on Perseus
  3. ^ "Combating Kleptocracy". Retrieved 8 August 2008. 
  4. ^ "National Strategy Against High-Level Corruption: Coordinating International Efforts to Combat Kleptocracy". Archived from the original on 10 July 2008. Retrieved 8 August 2008. 
  5. ^ "Plundering politicians and bribing multinationals undermine economic development, says TI" (PDF). Transparency International. 2004. Retrieved October 16, 2006. 
  6. ^ Hunt, Luke (January 8, 2013). "End of 30-Year Hunt for Marcos Billions?". The Diplomat, Asian Beat section. 
  7. ^ Komisar, Lucy (August 2, 2002). "Marcos’ Missing Millions". In These Times. 
  8. ^ Ezrow, Natasha M. & Franz, Erica (2011). Dictators and Dictatorships: Understanding Authoritarian Regimes and Their Leaders. Continuum Publishing. p. 135. ISBN 978-1-4411-7396-6. 
  9. ^ Henry, James S. & Bradley, Bill (2005). "Philippine Money Flies". The Blood Bankers: Tales from the Global Underground Economy. Basic Books. p. 43. ISBN 978-1-56025-715-8. 
  10. ^ "Bureau of Labor Statistics CPI Inflation Calculator". United States Department of Labor. 
  11. ^ Luke Harding. "WikiLeaks cables condemn Russia as 'mafia state'". the Guardian. 
  12. ^ "Putin’s judo cronies put lock on billions in riches - The Sunday Times". thesundaytimes.co.uk. 
  13. ^ "Hosni Mubarak's 'stolen' $70 billion fortune". 
  14. ^ Alon, Gideon; Amira Hass (2002-08-14). "MI chief: terror groups trying hard to pull off mega-attack". Haaretz. Retrieved 2007-07-21. 
  15. ^ Nashashibi, Karim; Adam Bennett (2003-09-20). "Business & Economy: IMF audit reveals Arafat diverted $900 million to account under his personal control". The Electronic Intifada. Retrieved 2007-07-21. 
  16. ^ For a general overview of the crucial importance of foreign funding in the peace process, and the PNA's use of such aid, see Rex Brynen, A Very Political Economy: Peacebuilding and Foreign Aid in the West Bank and Gaza, United States Institute of Peace Press, 2000
  17. ^ Stahl, Lesley (2003-11-09). "Arafat's Billions, One Man's Quest To Track Down Unaccounted-For Public Funds". CBS News. Retrieved 2007-07-21. 
  18. ^ Backgrounder: Corruption in the PLO’s Financial Empire[dead link]
  19. ^ SPIEGEL ONLINE, Hamburg, Germany (13 March 2013). "European Social Democrats Lobby for Kazakhstan Autocrat". SPIEGEL ONLINE. 
  20. ^ Aliu, Majlinda (2011-06-07). "How Wealthy are Kosovo Politicians Really?". BalkanInsight. Retrieved 2012-12-02. 
  21. ^ "Detention on remand against German citizen". EULEX. 2012-11-15. Retrieved 2012-12-02. 
  22. ^ "EU prosecutors indict Kosovo ex-minister for corruption". EUBusiness. 2012-11-16. Retrieved 2012-12-02. 
  23. ^ "Argentina under the Kirchners: Socialism for foes, capitalism for friends". The Economist. February 25, 2010. 
  24. ^ "Billions in Hidden Riches for Family of Chinese Leader". New York Times. October 25, 2012. 
  25. ^ "New York Times blocked in China over Wen Jiabao wealth revelations". Guardian. October 26, 2012. 
  26. ^ Johanna Granville, "Dermokratizatsiya and Prikhvatizatsiya: The Russian Kleptocracy and Rise of Organized Crime,"Demokratizatsiya (summer 2003), pp. 448-457.
  27. ^ Kimmage, Daniel (2008-08-12). "Russian 'Hard Power' Changes Balance In Caucasus". Rferl.org. Retrieved 2014-03-29. 
  28. ^ Drugs, Law Enforcement and Foreign Policy, Subcommittee on Terrorism, Narcotics and International Operations of the United States Senate Committee on Foreign Relations, December 1988

Further reading[edit]