Maravi

PF's business ventures

PF's business ventures
By The Post
Wed 17 Oct. 2012, 13:50 CAT

Avoiding corruption and abuse of public resources would require creating a thick line marking a distinction between the government and the ruling party. Lack of distinction between the ruling party and the government creates a climate for corruption and abuse of public resources.

No social group, for example, a political party, has the right to abuse public resources to keep itself in office or power. It is usually the unbridled desire to stay in power at all costs that leads to corruption. Those who want to keep themselves in power at all costs usually resort to abusing public resources to do so.

It is therefore very important that our political parties, especially the ruling party, become self-sustaining or self- reliant. In a poor country like ours, it is very difficult to mobilise the required financial resources to run election campaigns.

And the temptation is therefore very high on the ruling party, on those who control public resources to devise crooked ways of channelling such resources into their election campaigns. Over the last 20 years, we have seen how the MMD, as a ruling party, became parasitic on state resources for its survival.

All sorts of schemes were devised to steal public resources for its election campaigns. First ladies had NGOs or charities which received money mainly from people who were doing business with government. And part of this money was channelled to the ruling party's election campaigns.

Those who were doing business with government or those who wanted to do business with government became regular contributors to the first ladies' charities. And when their husbands lost power, the charities also lost support from these people. This should tell us something about the nature of those charities and the sources of their finance.

There are also many stories about people being given government contracts on condition that they contribute something to the ruling party and its election campaigns. We have heard stories of people who were given huge loans by the Citizens Economic Empowerment Commission with a requirement that they surrender part of the loan to the MMD for its election campaigns.

They didn't worry about repayment because the loans were not given with the intention of repayment. But the MMD failed to win last year's elections and those who had borrowed money from the Citizens Economic Empowerment Commission on such an understanding are today in trouble. They will have to pay back money they have not used for business. If the MMD had won the elections, they would have gotten away with it.

It is good that the Patriotic Front has publicly stated that they do not want to go that route. And to avoid such temptations, the party has decided to generate election campaign funds from commercial dealings, and has as such registered a limited liability company, Ilunda Chalo Investments Limited. The Patriotic Front intends to do business using this company and hopes to meet its financial requirements from the profits generated by this investment company.

This seems to be a good and honest approach to party fundraising. But there are dangers. Without strengthening the integrity and incorruptibility of the government procurement systems, there is no guarantee that in desperation the Patriotic Front may be given undue advantage in the procurement of government contracts.

And the whole Patriotic Front entrepreneurship endeavours may simply become just another form of tenderpreneurship. This may not be different, in nature, from the corrupt tenderpreneurship practiced by individuals close to, or associated with, the ruling party that we saw in the previous regimes of the MMD.

The Patriotic Front will not be the first ruling political party in our region to have business undertakings. The African National Congress in South Africa has similar business undertakings. The African National Congress has an investment wing, Chancellor House. And questions have been raised in the National Assembly about Chancellor House having undue advantage in the sourcing of government business.

Responding to questions from opposition members of parliament, Deputy President Kgalema Motlanthe said that Chancellor House should ideally not do business with government at all and should not do business in a way which gives it an advantage because it was the investment wing of the ruling African National Congress.

There is great potential for conflict of interest. This is a challenge. And there is a potential danger here. Not doing business with government means that the ruling party's investment wing should not enter into certain types of business like construction and other public works that are dominated by or are a preserve of government.

In small economies, like ours, this may greatly limit the ruling party's scope of business because most economic sectors have direct or indirect government financing.

In this country, it would mean that the ruling party cannot enter into road construction, farming input procurements and other businesses where there are limited resources to be allocated by government. Even mining can be problematic because licences, especially for new mines, have to be granted by government.

This is not to say these dangers, these challenges are insurmountable. These can be overcome by increasing the levels of transparency in government procurements and granting of licences and concessions.

The intention of the Patriotic Front to keep its fingers away from the government till is highly welcome and deserves support. But there is need to scrutinise the other legitimate options that the party wants to resort to because they too can result in the abuse of public resources by the back door.

We do not doubt the sincerity of the Patriotic Front on this score. The appointment of James Matale, a very honest man, is in itself indicative of the good intentions of the Patriotic Front in its business undertakings.

When things are going well, it is relatively easy to maintain an honest and clean line. Problems start when the going becomes difficult and expediencies of the moment increase.

It is important for the party, as it is for the individual, to avoid situations of extreme financial desperation, especially during election campaigns.

This can be avoided by advance planning and continuous political work. Plans for the next presidential and general elections in 2016 should start now to avoid desperation that may lead to corruption.

Labels: CORRUPTION, PF, TRANSPARANCY

posted by MrK @ 5:46 PM