Most people want to help other people.
Australia invests a lot of time, money and effort in helping its neighbours develop. There are geopolitical self-interests too, but when funds go to critical infrastructure developments that uplift communities, great good can be done.
The occasional theft of such well intentioned foreign aid money is therefore a tragic and ugly thing.
Any serious discussion about infrastructure must address corruption risk because large projects, by their nature create a plethora of embezzlement opportunities for a few rotten people.
Projects involve permits, contracts, subcontractors, materials, political interference, community consultations, customary land considerations and large flows of money which create opportunities for bureaucratic waste, favouritism, inflated pricing and rent-seeking. In complex political economies, those risks are especially sensitive.
Procurement documents often avoid plain language. They speak of “capacity constraints”, “governance challenges” and “complex operating environments” when they really mean that money can be wasted or stolen.
Procurement is a vitally important mechanism for minimising corruption risk and should not be perceived as an administrative process. It represents the point where public money becomes private revenue. It determines who gets access, who is excluded, who carries risk, who takes margin, who employs local workers, and how much of the original funding reaches the actual asset.
Unfortunately, but understandably, supply chain participants typically look to minimise their own risk, and not at the whole picture. Donors of development aid money want to minimise the risk of political or reputational damage, so procurement management is often outsourced to commercial organisations that, also wanting to minimise their reputational and commercial risk, pass risk down the supply chain to subcontractors, and so on, reducing transparency and accountability with every step.
In developing countries, bureaucratic procurement processes that are intended to reduce corruption risk, can unintentionally encourage collusion among smaller suppliers because fair participation requires too much unpaid time and effort with no certainty of remuneration.
In many cases, a larger international company with the resources to engage with the procurement bureaucracy but with little to no local presence will produce a winning bid and then further dilute funds by subcontracting it to smaller local contractors anyway.
The appearance of probity can mask inefficient or exclusionary market structures. It's one of the great contradictions of international development procurement.
It seems ironic that the very mechanisms that are designed to protect against corruption, help create an opaque and convoluted process where it can thrive.
There may be downsides with conducting procurement in the open, especially regarding bidders' commercial sensitivities, but would it be better than a status quo where well intentioned aid money lands in the pockets of a few corrupt people and not in the design and construction of critical infrastructure?
Corruption-risk management should not be treated as a defensive compliance exercise. It is central to development impact. Funds lost to waste, inflated claims or unnecessary bureaucracy are funds not spent on power, telecommunications, roads, markets, schools, health facilities or local jobs.
I don't know what the answer is yet, but it probably starts with talking about it.
