Harriett BALDWIN (United Kingdom) - GENERAL REPORT

17 January 2023

Corruption undermines national institutions that are critical to administering states, endangering national stability and deepening international differences. It enables terrorist and criminal networks both by providing vehicles for these groups to finance their operations and by weakening the hand of the states that they oppose. Corruption forges links between political elites and organised criminal groups − some of which may be tied to terrorist groups engaged in drug, arms and human trafficking. It weakens societies by undermining economic potential. It is, almost by definition, a misallocation of private and public resources; yet it is difficult to measure its toll. How does one, for example, attach a figure to investments never made because pervasive corruption essentially raises risk premia and eviscerates the potential for earning returns? Corruption also renders state regulation of the market irrational and ponderous. It undercuts state finances by making fair tax assessment and collection all but impossible. It insidiously rewards the well-connected and untalented while penalising society’s more skilful, productive, and virtuous actors who are denied opportunities as channels of influence become distorted by venality. It erodes national financial systems when those systems are flooded with illegally generated revenues. The erosion of economic opportunity simply becomes deeply rooted and pervasive.

Corruption also undermines democratic governance, election integrity and civil society participation in the life of the state. This is particularly problematic in countries such as Afghanistan where democracy is weak, but this malignant force also threatens stronger democracies. Freedom House, for example, ranks corruption along with ever more powerful anti-liberal political movements, election subversion, and the breakdown of the rule of the law as among the drivers of a global retreat from democracy. When corruption is institutionalised, it becomes a means by which ruling parties and elite insiders consolidate their hold over the state and the electoral process itself. State capture describes a condition in which well-connected elites both within and outside of the state use corruption to shape national policies and laws to benefit their own private interests. It allows the corrupt to maintain their grip on power, illegally obtain riches from the state, and avoid legal consequences for their theft. 

Russia illustrates the phenomenon clearly. Its leaders, many hailing from the intelligence apparatus, have essentially seized both public and private assets and deployed these to enrich themselves, to maintain their hold on power and to ensure that their narrow interests are advanced globally. Corruption has dramatically constrained the emergence of a dynamic private sector and an autonomous and vibrant civil society in Russia. It is also a problem that evades military solutions. Indeed, war itself is typically a catalyst for the intensification of corruption, while corruption can be both a tool and a catalyst for war. In short, to ignore corruption is to court disaster.

Furthermore, given its capacity to weaken the institutional and societal underpinnings of the state, Russia has used this powerful tool for hybrid warfare and national security policy. Russia’s security apparatus, through corruption, not only purchases compliance but also fosters weakness, servility and undermines democracy globally. 

The Kremlin has elevated its use of corruption to the level of statecraft. It deploys its control over important oil and gas industries and corrupt practices to create political and economic dependencies, while sowing distrust, confusion and weakness. Putin’s Kremlin has used this tool not only in countries like Ukraine, but also throughout much of the Western Balkans and in Western countries. 

China and Russia have used large investment projects to subvert democratic resilience, foster dependence and weaken the capacity of recipient societies to counter the agenda of authoritarian competitors. Bribing decision-makers responsible for signing large infrastructure contracts creates vulnerabilities and provides these authoritarian states with “shills” prepared to do their bidding, both because they have been paid to do so and because they are vulnerable to blackmail − or worse.

For these and other reasons, the question of how to reduce purposeful and incidental complicity in corruption, particularly where it poses a strategic threat, has moved to the centre of the international agenda. With allied countries still assessing lessons on corruption from Afghanistan, they have been compelled to think more systematically and seriously about how corruption shapes the security landscape and what can be done both to account for it and to help limit it. The introduction of comprehensive sanctions against Russia following its invasion of Ukraine marks a sea change not only in international relations, but in how Allied governments intend to address the problem of international corruption and its security implications. 

Among NATO countries, significant progress has been made on tackling the proceeds of corruption since the invasion of Ukraine in February. The crisis with Russia over Ukraine will very likely accelerate movement on these issues, firstly with regard to Russia but ultimately in a more generalised sense. 

Read also