Wednesday, September 11, 2013

Rich people and politics
By Editor
Wed 21 Aug. 2013, 14:00 CAT

WE were this week told by Redwan Hussein Rameto of Ethiopia's ruling party, Ethiopian People's Revolutionary Democratic Front, that rich people are not allowed to be members of his party.

Rameto says this is a way of protecting the country's interests; it is a preventative measure for members not to engage in corruption.

"Never hesitate to chase out anyone who is found guilty of corruption. In Ethiopia, the first one to go behind bars was our former prime minister before our great leader Meles Zenawi. A month ago, we arrested customs authorities, including their director. Arresting corrupt people is part of protecting public resources. We have to ensure national resources benefit all our people unlike where resources end up in a few pockets," Rameto told colleagues from other African political parties.

But how is it possible to keep rich people away from a political party?
In recent years, politics has no longer been restricted to people with political ideologies, or technocrats. More and more people from business circles are represented in governments. Some of them do not even bother to directly take part in elections but hold political positions and take part in policy-making.

We can't say which group is best able to run the country - politicians or business people.

We have seen a few rich men become prime ministers or presidents. In Thailand, business tycoon Thaksin Shinawatra rose to power in 2001. His rise to power indicated how much Thais wanted a leader with business insight to help establish the country's economic presence on the global stage.

Of course, Shinawatra is not the first businessman to lead a government. Media tycoon Silvio Berlusconi became prime minister of Italy in 2001, cultivating on public hopes for a better Italy, mainly in economic terms. Hungary in 2004 also elected one of its richest businessmen, Ferenc Gyurcsany, as prime minister.

These three brought knowledge necessary to facilitate business expansion and economic growth. But it is worth reflecting on what happened to them and their countries. Shinawatra's story needs no lengthy repetition here. His political opponents can file a long list of allegations against him, but the most important are his dubious business deals - listing procedure of the family's business on the stock exchange, as well as the dubious participation in a state land auction by his ex-wife, Pojaman.

Now he is in exile and hardly tries to hide the fact that he still controls the government of Thailand.

Berlusconi has faced numerous charges, from tax fraud to abuse of power. Berlusconi has been charged with allegedly bribing a left-wing senator with US$3.9 million to join his party. He has also been convicted of tax fraud, which has landed him a four-year jail term.
Listed as the 50th richest person in Hungary in 2002, Gyurcsany faced a charge of abuse of power in 2011 regarding a land-swap deal related to a casino project. Prosecutors said authorisation for the land-swap was pushed through by bypassing the usual administrative procedures, and the casino scheme itself was facilitated by Gyurcsany's decision to declare it a "project of national importance".

The Thai economy was buoyant during Shinawatra's era, as his policies helped spark new investment and consumption. But this came at a cost, as public debt rose. Leading Italy for eight of the ten years between 2001 and 2011, Berlusconi saw Italy's GDP per head fall by four per cent during that period, and the debt to GPD ratio rose from 109 per cent to 120 per cent.

What went wrong? Most politicians believe that businesses are better than bureaucracies at generating growth. But how can we make sure that businessmen in office use their business skills to lead the country and not political skills to protect vested business interests?

Last year, we had an interesting revelation by Geoffrey Mwamba, our country's Minister of Defence today. Mwamba, in an interview with UK hosted online radio station, CrossFire Blog Radio, revealed that he was forced to go into active politics in order to successfully operate his businesses that were becoming difficult to run - "I had to find a way of sailing through and making my business successful. The only people who were benefiting were only those who were somehow connected to the so-called politicians".

Politicians do need help from business people, given the more complex business world of today. But they need to realise that for businesses, profits come first. Only recently have some companies realised that there must be a balance between profit and society.

As policy makers, politicians have to realise that they are serving the entire population. Any ideas from people must be scrutinised and fine-tuned before they are passed into law, which must be fair to all. Meanwhile, there should be less rhetoric, and more focus on the context of their work. One can only do a job well with the right knowledge and the right ethics.

We are reminded of the Bible teaching of the young rich man who wanted to follow Christ and was told: "If you want to be perfect, go and sell all you have and give the money to the poor, and you will have riches in heaven; then come and follow me" (Matthew 19:21).

When the young rich man heard this, he went away sad. Jesus then said to his disciples, "I assure you: it will be very hard for rich people to enter the Kingdom of heaven. I repeat: it is much harder for a rich person to enter the Kingdom of God than for a camel to go through the eye of a needle" (Matthew 19: 23-24).

Truly, it is very difficult for people pursuing business and profits from dealings with government to play a proper and sincere stewardship role. Politicians, especially those in government, are protectors of public interests, of the common good. They are in charge of government business. If they happen to be businessmen, they will be chasing the same business that they are controlling on behalf of the public. No matter how much things are disguised through all sorts of schemes, there is a potential for conflict of interest here. It will take very strong and well-organised societies to put in place mechanisms for very high levels of transparency and accountability to ensure that no such conflicts of interests exist.

We have seen the problems this causes even in well-established democracies of the West that have very good institutions providing checks and balances. What more of our poor countries with very weak institutions of governance? The rich take over everything and use their wealth to entrench themselves in the political leadership of the country.

It is no wonder that our best presidents have been those with the least or no business interests. Dr Kenneth Kaunda was not a businessman and as such managed very well to protect public interests and the common good from business greed and vanity.

And one of the strengths of Michael Sata is his little interest in accumulation of wealth. Michael has had big opportunities to enrich himself using public office. But no one can truthfully and successfully point an accusing finger at Michael of abusing public office to enrich himself or to benefit his business interests.

Looked at this way, the practice of the Ethiopian People's Revolutionary Democratic Front of stopping rich people from joining their party deserves some consideration or attention.

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