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WHY IT MATTERS?

Our GI finding show all states in the Middle East and North Africa are at high risk of corruption posing a continuing threat to security and stability in the region.

Sixteen of the seventeen states assessed in the GI index receive either E or F grades, representing either a “very high” or “critical” risk of defence corruption. Only Tunisia performs better, although is still classed as “high risk”.

The region has some of the most rapidly growing defence budgets in the world, with a spend of $135bn, and where up to a third of all government spending can be on defence.

There is well-documented evidence of weapons from a wide range of countries reaching terrorist groups such as ISIS, Houthi and ISIL.

Those at critical risk are Kuwait, Morocco, Iraq, Libya, Syria, Bahrain, Oman, Egypt, Qatar, Algeria, and Yemen as there is virtually no accountability or transparency of defence and security establishments. Across the region only Jordan and Tunisia publish information on defence and security budgets, though with insufficient detail for any meaningful scrutiny.

However, all countries suffer from lack of oversight, excessive secrecy, and widespread nepotism with networks based on family and business ties in the procurement of defence contracts.

High-ranking Princes in Saudi Arabia preside over powerful defence agencies and use those assets to distribute patronage to their client base. In Iraq individuals can buy military positions with a Divisional Commander’s job reportedly being sold for $2m. In Yemen and Oman all senior positions within the intelligence services are filled on the basis of political patronage and family ties.

The lack of accountability has undermined the development of strategic defence procurement policies further threatening security in the region. Despite the US alone providing $24bn for training and weapons to Iraq, an Iraqi Army General stated that the inability to halt the advance of Islamic state was because it lacked advanced airpower and weapons.

Many improper sales and transfers have happened well away from evidently fragile environments, under a thin veil of legitimacy. Neither Russia nor Iran have disclosed any of the financial details regarding the S-300 missile defence system deal signed in August this year, estimated to be worth $800 million. In 2013 Saudi Arabia purchased a large supply of weapons from Croatia on behalf of the anti-government rebels in Syria, and in 2014 financed the purchase of $2 billion in Russian arms on behalf of Egypt’s military-backed government.

The global economy is so fundamentally interconnected that truly effective governance depends on cooperation and common approaches across the world’s major powers. In this more militarised, multi-polar and uncertain world, global security depends on the most powerful nations in the world establishing acceptable way of managing military might, based on accountability to citizens and basic transparency through which effective domestic oversight over policy and budgets can be exercised. We call upon the leadership of the world’s most powerful nations to demonstrate the foresight and vision to close the gaping chasm of accountability and transparency.

This isn’t just about commissions on sales: corruption can mean soldiers operating with equipment that doesn’t work, or with no equipment at all. It can mean that well intentioned defence assistance can be subverted by corruption in the destination country.

Societal norms and the attitudes of markets to corruption have changed for the better over the last 30 years. Practices such as facilitation payments and uncontrolled use of intermediaries, once common, are increasingly recognized as poor practice, anti-bribery laws have been passed, and compliance has become part of the lexicon of today’s businesses.

These changes of attitude are happening in defence too, but with greater difficulty. The sale and purchase of weapons usually has a political element, and many defence transactions are protected by secrecy, which can shield companies from scrutiny. Major corruption scandals continue to occur.