Jun 19th 2014

Kenya, Corruption, and Terrorism

by Daniel Wagner

 

Daniel Wagner is the founder and CEO of Country Risk Solutions and a widely published author on current affairs and risk management.

Daniel Wagner began his career at AIG in New York and subsequently spent five years as Guarantee Officer for the Asia Region at the World Bank Group's Multilateral Investment Guarantee Agency in Washington, D.C. After then serving as Regional Manager for Political Risks for Southeast Asia and Greater China for AIG in Singapore, Daniel moved to Manila, Philippines where he held several positions - including as Senior Guarantees and Syndications Specialist - for the Asian Development Bank's Office of Co-financing Operations. Prior to forming CRS he was Senior Vice President of Country Risk at GE Energy Financial Services. He also served as senior consultant for the African Development Bank on institutional investment.

Daniel Wagner is the author of seven books: The America-China Divide, China Vision, AI Supremacy, Virtual Terror, Global Risk Agility and Decision Making, Managing Country Risk, and Political Risk Insurance Guide. He has also published more than 700 articles on risk management and current affairs and is a regular contributor to the South China Morning Post, Sunday Guardian, and The National Interest, among many others. (For a full listing of his publications  and media interviews please see www.countryrisksolutions.com).

Daniel Wagner holds master's degrees in International Relations from the University of Chicago and in International Management from the Thunderbird School of Global Management in Phoenix. He received his bachelor's degree in Political Science from Richmond College in London.

Daniel Wagner can be reached at: daniel.wagner@countryrisksolutions.com.

Shortly after Uhuru Kenyatta was elected president of Kenya early last year, I published an article pondering whether his election and indictment at the International Criminal Court would ultimately make the country more isolated. At the time, Kenya was becoming increasingly important in the regional fight against militant groups such as Al-Shabaab, and a transit point for aid and goods to South Sudan, so the country's potential to impact other states in the region was significant.

Given the subsequent and ongoing terrorist attacks throughout the country, Kenya has now become a lynchpin in the fight against terrorism in the region. The stakes are high because Al Shabaab has become stronger, in spite of all the resources devoted to fighting against it, and crosses the region's borders with impunity. The presence of endemic corruption is important here because it can impact a country's ability to combat terrorism. Kenya has regrettably become a paradigm for what can happen when corruption becomes so ingrained in a nation that its security forces are unable to effectively protect its people.

Kenya is not the worst country in Transparency International's (TI) Corruption Perceptions Index. It is rated 136 out of 177, on a par with Bangladesh and the Ivory Coast. But it is not far from one of the worst, and is in a rotten neighborhood, battling one of the most savage terrorist organizations on the planet.

The vast majority of Kenya's people do not trust the police. Ninety percent of respondents in a 2011 TI survey in Kenya considered security services to be either corrupt or extremely corrupt. It is widely believed that last year's horrific attack on the Westgate shopping center was as prolonged as it was because troops were busy looting the place before ending the siege.

An article in Foreign Policy magazine last month posed the question "Is East Africa's economic powerhouse becoming the region's newest lootocracy?" The article reminds us that Kenya has a decades-long history of kleptocracy (dating from British times, it is worth adding), and that Kenya was actually the inspiration for the creation of TI. Following the frustration of a former World Bank Director at seeing numerous Kenyan development programs undermined by graft, he created TI to attempt to combat it.

It is bad enough, of course, that the Kenyan people are denied a better state of development and higher standard of living as a result of the institutionalized corruption in the country. Now they are denied the right to live in a country free of terror. According to the FP article, even the importation of equipment specifically designed to enable police to identify suspects is subject to corruption. A $100 bribe will get a terrorism suspect out of jail. It is a sad state of affairs, to be sure.

The government has generally done a poor job of hunting down terrorism suspects. Left unanswered are questions about how military grade explosives often used in the attacks are acquired in the first place. Could the military be involved? There is talk in Nairobi that some of the recent terrorist attacks are actually the work of domestic political forces, either seeking to make a stronger case for more foreign anti-terrorism funding (some of which will presumably 'disappear' upon arrival), or to attach blame to the President and his political party for political purposes. In his first comment on the attacks this week in Lamu Province, President Kenyatta denied they were the work of Al Shabaab and instead blamed domestic forces for the atrocities.

The result is that the depths of corruption in Kenyan society permit terrorism to potentially threaten the very fabric of the nation. Kenya is already 17th on the list of Failed States Index -- sandwiched between Nigeria and Niger. Number one on that list is its neighbor, Somalia (home base for Al Shabaab); number four is another neighbor, South Sudan (one of the world's newest nations, at war with its sister nation, Sudan); and next to that is number nine, the Central African Republic (currently imploding, and a magnet for terrorist groups). In fact, Africa is the home of 15 of the top 20 failed or failing states on the Index.

There is a very real risk that Kenya could become part of a swathe of states -- from Africa's east coast to West Africa -- that are effectively ungovernable, what I have dubbed the 'African Confederation of Failed States'. It may be argued that this is already the case. For example, despite its support from France and the UN, the Central African Republic is in a state of anarchy. At issue now vis-à-vis Kenya is whether the country shifts from being a shield against Al Shabaab or a potential base of operations. Given its porous border with Somalia, the group's base of operations already (de facto) includes parts of Kenya.

So what does the future hold for a country in a bad neighborhood, unable to break free of the disease of corruption and being infiltrated by a terrorist organization wreaking havoc throughout the region? That depends on how effectively anti-terrorism assistance can be integrated into Kenyan society, and how long such assistance will continue to flow to the government. How effectively can the security forces deploy those assets, and to what degree can the government become proactive, rather than reactive, about the problem. Is that even possible? To date, regrettably, the security services have been relegated to the role of firemen.

My best guess is that Kenya will continue to muddle along as it has for decades, failing to address the corruption issue in any meaningful way, and squandering the opportunity to become a genuine regional economic powerhouse. In the process, its people will endure even higher unemployment (currently at 40 percent) and crime rates, while the terrorism threat continues to rise. Crime is out of control. On a trip to Nairobi this week literally every person I spoke with - Kenyan or foreigner -- had either been robbed, carjacked, or both.

Kenya is too important to fail. The government knows it, and so donor governments. So its dependence on foreign aid will also continue. Let us hope that Kenya does not become part of the African Confederation of Failed States. As of now, there is just as much chance that it will, as that it will not.



For Daniel Wagner's website, please click here.

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