Aboitiz-assisted coops boost earnings amid ‘new normal’

The COVID-19 pandemic has already brought about numerous changes to our world and lives. Given the gravity and speed of the political, economic and social changes that we are seeing, it is vital to take a step back to reflect on the impact of these trends.

The purpose of this reflection is less to predict the future and more to consider different potential outcomes on key topics and to identify opportunities for course-correction in the short, mid and long term.

When faced with extraordinary circumstances, such as the current pandemic, governments often resort to extreme measures, including increased surveillance and restrictions of the freedom of assembly and freedom of speech, and the closing of space for civil society, the media and whistleblowers. Luckily, however, the imperatives of social distancing are accelerating the spread of digital forms of activism and participatory processes such as citizen assemblies or public hearings conducted online.

In the short term, countries will face clear corruption and governance challenges as emergencies put pressure on governments to procure lifesaving equipment, creating fertile ground for fraud and corruption. These include shortage-induced bribery risks, overpricing, diversion of emergency response resources, and kickbacks in procurement processes. The private sector is an active player in this environment!

Emergency measures often include the temporary suspension of institutional checks and balances. If this concentration of power outlives the emergency itself, anti-corruption reformers ought to gear up for a back-to-basics kind of agenda, pushing for the reinstatement of the appropriate institutional checks and balances, transparency and ethics, fairness and integrity.

Reduced income, a reduction in manufacturing and increased risk aversion are factors contributing to a worsening of the economy.This is likely to contribute to the rise of the informal sector of the economy, as more people find themselves in precarious employment. This may lead to a paradigm shift in the delivery of social and public goods expected from the state, such as health care, social security measures and even climate governance.

All these factors come with high corruption risks. In the short term, huge economic stimulus packages will have to be monitored to ensure they are being spent for the common good, rather than in the private interest of a few. 

The pandemic is already hitting harder the poorest and most disadvantaged groups who tend to live in closer quarters and without adequate medical and social support. Many will struggle with job losses and family burdens. Depending on how the economic stimulus bailouts are managed and disbursed, bigger corporations may end up benefiting, while the population at large foots the bill.

The negative impacts of illicit financial flows of public budgets, government effectiveness and even inequality had been increasingly recognized long before the COVID-19 crisis. However, the pandemic has laid bare the devastating effects of stashing cash away in tax havens, while governments struggle to pay for basic services required to keep people alive. The pandemic has brought to light the inability of multilateral bodies such as the UN Security Council, G7 or the EU to effectively coordinate the response to the crisis. But this needs to be addressed now!

When looking at all these topics, it is clear that there are both opportunities and challenges ahead for anti-corruption, governance and development work.

Will we in the Integrity Initiative have to continue with our anti-corruption work? I am convinced that we have to!!! If you agree, join us; if you disagree, tell me why. Contact me at [email protected]