CIC Special Briefing - Fighting Corruption: Progress or Stalemate?

Although corruption is, of course, not confined to Central Asia, it is widespread throughout the region for a variety of historical and cultural reasons. Illegal payments to officials are not easy to eradicate in societies in which 'gifts' have been regarded as an important symbol of friendship or good will. Moreover, during the Communist era, payment to public officials, in cash or kind, was often the only viable means for ordinary people to persuade the bureaucracy to do its job.

However, following Independence the government was quick to recognise that corruption acts as a major disincentive to foreign investment, and as a brake on efficiency and the delivery of services. Instead of trying to conceal or minimise the problem, as part of an anti-corruption strategy it has focused attention on it and sought to explain the consequences of allowing corruption to go unchecked. As a report from the World Bank has noted: "Many countries, such as Kazakhstan, are moving anti-corruption to places of prominence on the reform agenda."

Key elements in the strategy have been:

§ Major institutional reforms under the Civil Service Law of 1999, including the separation of political appointees from professional civil servants. The latter - who number 66,000 - who are now appointed on the basis of merit through competitive recruitment, have a revised salary policy and participate in programmes with the aim of modernising attitudes, orientation and status.

§ The encouragement of transparency and openness in matters relating to business contracts and participation in international conferences and seminars on this subject.

§ A pay award of 50 per cent for all public servants, announced in June 2003.

§ A decision, announced in June 2003, to favour joint venture arrangements over production-sharing and other arrangements in the development of Kazakhstan's oil resources, because of their superior transparency.

§ Proposals to create a Commission for Combating Terrorism, with far-reaching powers under the Department of Justice.

The World Bank has confirmed the central importance of the first of these reforms: "The authorities realise the importance of developing public sector human capital. The passage of the Civil Service Law 1999 was a watershed in the modernisation of the public service."

It also noted that its survey of opinion about the impact of reform among civil servants showed that "large numbers" believe that this has been favourable, and that even job applicants who were not successful said the process was fair and "ensured that the most qualified applicant got the job". Sixty per cent said that the process was transparent and fast.

The Bank concluded that continued public sector reform would be necessary to further the efficiency and honesty of public service provision. It also stated: "… Kazakhstan's track record on selected aspects of institutional reform despite opposition from entrenched interests, and the technical capacity and competence of its public administration, provide cause for hope."

Its report continued: "The road ahead is long and arduous, and staying the course will require reserves of political sagacity, institutional capacity, technical competence and stamina that will be tested repeatedly. As Kazakhstan's enlightened policy-makers have found in the past, such challenges are easier to surmount if the state works hand in hand with civil society … Kazakhstan's development partners stand ready to extend all assistance in this worthy quest."

One sign that the Kazakhstan government is indeed enlisting the aid of civil society can be found in its support for a project with the aim of improving education and changes in attitudes in this area, to match the revolutions that have occurred in economic and political life. USAID, through the organisation Transparency Kazakhstan, has set up the Kazakhstan Anti-Corruption Center, which has the goal of enlisting public participation. The Center produces a research journal entitled "Towards A Corruption-Free Society", carries out surveys and public opinion polls on corruption, and maintains the web-portal www.transparancykazakhstan.org, through which it is possible to access a database of organisations involved in the fight against corruption.

A major part of the project is a university-level course on anti-corruption measures, consisting of lectures and student presentations - the only such course in Central Asia. Taught by a Kazakh lawyer and a leading human rights activist, the topics covered include the economic and political aspects of corruption, the anti-corruption legal framework, civil society, international regulations, and the impact of corruption on the political process, economy and foreign investment.

According to the Anti-Corruption Resource Center, the situation in Kazakhstan in respect of corruption is "more positive" than in other Central Asian republics. The Kazakhstan government, which is a signatory to the joint Asia Development Bank-OECD Anti?Corruption Initiative for Asia-Pacific, has been praised by the Anti?Corruption Resource Center for its efforts in building a legislative and operational framework for the market economy, a banking system and systems for financial management, public procurement and insurance - all vital steps if the campaign against corruption is to succeed. The organisation also acknowledges that over the last three years "the government has been undertaking systematic action aimed at eradicating corruption." The Anti-Corruption Resource Center described as "certainly welcome" the announcement of President Nazarbayev that a Commission for Combating Corruption with far-reaching powers is soon to be set up under the Department of Justice.

Recent progress in this and related areas, however, may have been obscured in part because of the wide international media coverage of the arrest and indictment in the United States of a US citizen, James Giffen, under the Foreign Corrupt Practices Act. In the indictment, Giffen is said to have obtained large sums from inter-national oil companies in the second half of the 1990s, some of which are alleged to have been paid subsequently into Swiss bank accounts controlled by Kazakh officials. Since this matter has not yet been dealt with by the US courts, it is important to stress that the charges are unproven and that the only individual currently facing criminal charges is a citizen of the United States.