Cynical reaction: well, we all knew someone was doing it, now we've identified a few.
One thing I can't help think here is: this is just another uncomfortable truth re: what a truly global economy looks like (frankly, similar the factory jobs leaving the US for cheaper labor countries, etc.). The bottom line is that in many developing countries, bribery is part of the economy, and if western companies want to engage in the economies of those countries, then it's not surprising that they need to participate wholly. Because of western anti-corruption laws, they of course can't engage directly, so these Unaoil folks found a solid business opportunity to exploit.
What sucks of course is that western companies often have funds to overpay vs. the local bribery market, so they end up reducing local economic competition, slowing internal development, flooding incumbents with cash, keep incumbents in power longer than they would be otherwise, and contribute to their illegitimacy.
They still should stop, I guess my point is that corrupt systems (usually) pre-existed western corp. participation. If I'm being optimistic, stories like this hopefully will motivate the US and other western gov. to recognize this reality, and then actually develop and enforce international laws to handle this effectively - though I wouldn't hold my breath =)
(Of course, the involvement of western governments in colonization and in creating this atmosphere is a whole other discussion, which I won't start here..ha)
I think you've missed one of the big points of the article, which is that Unaoil was the vehicle by which western companies introduced totally new levels of corruption into developing economies. They'd start the bribees (is that a word?) out small with minor stuff, and then they'd move on to full-blown bribery.
In other words, one of the big points of the piece is that the idea that "these countries are just that way and you have to pay to play" is actually not true across the board, and that in cases where the country wasn't that way, Unaoil and their clients made it that way.
ah yes - that is right. I attempted to say something like this when I mentioned western corp's ability to "overpay vs. the local bribery market" and all that, though I admit I didn't flush it very well out. here's a try: this is the natural result of massive western corps having access to economies that rely on bribery wide-scale, and what sucks is that, due to the western companies massive resources relative to the local economy, the bribery gets much further out of hand and continues longer vs. if the local economy had remained isolated.
Corruption is diabolical, and the worst form of tax - one where no benefit from the tax flows to individuals other than the fixers.
But with climate change, I find it hard to get upset about any corruption that causes the price of oil to rise. The current situation of rock bottom oil prices encourages more consumption and reduces the incentives to improve energy efficiency. It makes it harder for renewables to compete.
Bring on more corruption. Let oil prices boil over.
>any corruption that causes the price of oil to rise.
it works the other way. There is no environmental controls and proper taxation on corrupted contracts by corrupted governments. So the price of such oil is cheaper. Just think - who would pay a bribe to obtain something for a higher price than it would be without a bribe?
>The current situation of rock bottom oil prices
and the cheapest oil is from ISIS - one of the reasons for current low prices. It is the most corrupt oil - to get into your car as gas it passed through the most corrupt laundering "pipelines" in Turkey and Saudi Arabia and further to Ukraine and Poland...
I don't get your first point. Typically corruption undermines normal competition, reducing efficiencies. To quote from an OECD report (https://www.oecd.org/cleangovbiz/49693613.pdf):
"On the macro level, corruption distorts market mechanisms, like fair competition...The World Economic Forum estimates that corruption increases the cost of doing business by up to 10% on average. "
As to whether ISIS oil is cheaper, I don't know about that, but if so, perhaps that could be because it was stolen from its rightful owners. I don't think you can use that to draw a conclusion that corruption causes costs to go down.
>Typically corruption undermines normal competition, reducing efficiencies.
...
>corruption increases the cost of doing business
these statements make sense and are true only than normal competition is a real alternative. Which it isn't in those corrupted countries.
Without normal competition as a feasible alternative, the things are the other way around. Corruption way of doing things is cheaper, while doing things "by the book" is much more expensive if at all possible (an attempt to do "by the book" is basically denying government people an income they are "entitled to" and they don't take it lightly and would make sure that it is less profitable for you :)
One thing I can't help think here is: this is just another uncomfortable truth re: what a truly global economy looks like (frankly, similar the factory jobs leaving the US for cheaper labor countries, etc.). The bottom line is that in many developing countries, bribery is part of the economy, and if western companies want to engage in the economies of those countries, then it's not surprising that they need to participate wholly. Because of western anti-corruption laws, they of course can't engage directly, so these Unaoil folks found a solid business opportunity to exploit.
What sucks of course is that western companies often have funds to overpay vs. the local bribery market, so they end up reducing local economic competition, slowing internal development, flooding incumbents with cash, keep incumbents in power longer than they would be otherwise, and contribute to their illegitimacy.
They still should stop, I guess my point is that corrupt systems (usually) pre-existed western corp. participation. If I'm being optimistic, stories like this hopefully will motivate the US and other western gov. to recognize this reality, and then actually develop and enforce international laws to handle this effectively - though I wouldn't hold my breath =)
(Of course, the involvement of western governments in colonization and in creating this atmosphere is a whole other discussion, which I won't start here..ha)