Terrence Farrell: “Corruption adds 10 percent to the cost of doing business”

POSTED: 10/19/15 12:39 PM

St. Maarten – The Information Village organized by the high councils of state ended last night with a presentation by Terrence Farrell of the Trinidadian company Terrayanna Investments about morality, integrity and corruption. While the turnout for the Information Village was somewhat disappointing, the crowd that attended Farrell’s address was good. It included, among others Justice Bob Wit, the president of the Constitutional Court who has just been appointed to a panel that will bring out an advice about the constitutional crisis next week.

Asked if he agreed with the opinion of Prof. Arjen van Rijn (that the governor has no choice but to sign the national decree to dissolve the parliament), Wit politely declined to comment. “It is not prudent to say anything about this at the moment,” he told this newspaper.

Farrell noted in his address that corruptions in these days are much more than just plain bribery. It is about abuse of power, conflicts of interest, nepotism, the theft of state assets, patronage, illicit enrichment, money laundering and providing advantages to others.

He described the difference between grand, petty, political and transactional corruption.

“The results of all this are higher costs to the taxpayer, higher prices for consumers, the deprivation of goods, threats and psychological pressure.”

Farrell noted that those who engage in these corruptive activities usually find ways to justify their actions. “They say for instance that they have to make do with a low salary or they refer to societal inequality. They tell themselves that what they do is right.”

The magnitude of corruption is dazzling. On a global scale it is about 5 percent of Gross Domestic Product – around $2.6 trillion. Criminal activities, corruption and tax evasion cost the world community between $1 and $1.6 trillion every year. Developing countries lose between $20 and $40 million to corruption every year. According to the World Economic Forum, corruption drives up the costs of doing business by 10 percent.

Farrell mentioned a number of examples of mega corruption – from the Indonesian President Suharto who embezzled up to $15 billion, and rulers in the Philippines, Zaire (now Zimbabwe) and Nigeria who enriched themselves to the tune of $5 billion.

“Those are old examples,” Farrell said, “but the corruption continues.” He referred to John Ashe, a former president of the General Assembly of the United Nations, the world soccer organization Fifa, a former oil minister in Nigeria and to Wall Street bankers. Of that latter group, nobody ever went to jail, he pointed out.

Farrell got a few good laughs when he noted that corruption occurs around large infrastructural projects. It immediately put the image of the causeway across the Simpson Bay Lagoon on the internal screen of many of those in attendance.

To battle corruption, Farrell said, there is a strong focus on anti-money laundering procedures. That is exactly where St. Maarten falls short, because none of the suspect transactions the Financial Intelligence Unite reported to the prosecutor’s office last year has been investigated. Data from the local FIU show that more than 1 million guilders in suspect transactions flows through St. Maarten’s financial systems every day.

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