Program of Seminars Partnerships to Combat Corruption: Rising to the Challenge September 17, 2006 Suntec Singapore Panelist(s): Paul Wolfowitz, President of the World Bank Group John Githongo, Senior Associate Member, St. Anthony’s College, United Kingdom Mohamed Ibrahim, Chairman, Celtel International B.V., The Netherlands Huguette Labelle, Chairwoman, Transparency International, Germany Nuhu Ribadu, Executive Chairman, The Economic and Financial Crimes Commission (EFCC), Nigeria Paul Volcker, Chairman, Board of Trustees, The Group of Thirty Consultative Group, United States Moderator(s): Dele Olojede, Executive Chairman, Timbuktu Media, Plc, South Africa P R O C E E D I N G S MR. WOLFOWITZ: Good afternoon. We have an exciting group here to talk on this critical subject of "Partnerships to Combat Corruption." I would just like to say a few words of introduction, and then I plan to come down and join you and listen, because there is a lot to learn from this very distinguished group we have here. We have been having an intense discussion in the World Bank Group in recent months about how a sharper focus on governance should shape our work. We have released a paper with the title "Strengthening World Bank Group Engagement on Governance and Anti-Corruption," and that paper will be discussed tomorrow at the Development Committee meeting. The fact that governance and anti-corruption have risen high on the agenda of the World Bank reflects, I think, a worldwide recognition that better governance and reduced corruption are key to achieving the central mission of our organization--the reduction of poverty. We approach governance not as an end in itself but rather as a means to better development outcomes, and the evidence, I think, is quite clear that better governance is associated with more rapid growth and lower inequality, lower child mortality, lower literacy. Poor governance and its worst form, corruption, waste public resources meant for schools, for health clinics, for infrastructure, and in its most extreme forms, poor governance can lead to financial collapse and even societal instability. Our internal discussions have emphasized that governance improvement is a long-term process. There is no quick fix that can transform the governance environment overnight. Improvements take place over time. It is the trend that matters, and I think the experience of successful developed countries, many of whom have had extremely corrupt pasts--not that they are totally perfect now by any means--shows that, as does the successful decades-long effort to fight corruption here in Singapore, the host for our meetings. Secondly, the governance challenges differ significantly from country to country. There is no one-size-fits-all when it comes to this subject. The approach to reform has to be differentiated across countries and will be most successful when it supports countries' own efforts to address governance and corruption. Third, engagement and partnership are critical. Even in the most challenging environments, we are working to seek and engage with the champions of good governance and anti-corruption efforts. The most important of those champions may often be inside governments themselves, and we need to work them, but also more broadly, we need to work in partnership with other national stakeholders as well as with other donors, both multilateral and bilateral. Finally, to remember that corruption has at least two sides to it, that every corrupt transaction has bribe-givers as well as bribe-takers, and very often the bribe-givers come from developed countries. The developed countries have to do more to deal with that, and they also have to deal with the fact that often the gains, especially of large-scale corruption, are hidden away in banks in developed countries. We intend to engage more systematically at the global level to support efforts by developing countries to recover stolen assets. Let me stop here, because today we are here to listen to these outstanding panelists. It is a real privilege, because the governance issue is a complex one, and we have some real experts who can help enlighten us. Let me introduce them, and then I will turn the panel over to our chairman and moderator, who is Dele Olojede. He is Chairman of Timbuktu Media, a newspaper and magazine publishing company registered in Nigeria and South Africa. In April 2005, Mr. Olojede became the first African to win journalism's highest honor--maybe that's--excuse me--an American-centric comment--but any rate, one of the highest honors in journalism, the Pulitzer Prize, for his detailed reexamination of the aftermath of the Rwanda genocide. MR. WOLFOWITZ: He is all too familiar with the debilitating effect of corruption on development, and he has the authority to speak out and be heard. In 2006, The Financial Times named him "the most influential voice in the public arena in Nigeria," and as an advisor to business as well as government and international organizations, he uses that voice to push positive change. I don't think Paul Volcker needs an introduction from me, but let me do it anyway. His long and distinguished career has included most prominently a long and impressive tenure as Chairman of the U.S. Federal Reserve. He is currently helping us in the whole international financial community as Chairman of the Board of Trustees of the International Accounting Standards Committee. He has shown strong leadership in the global fight against corruption, including his role as Chair of the Independent Inquiry into the United Nations Oil for Food Program, a role undertaken at the request of Secretary-General Kofi Annan. John Githongo is one of Africa's lead--and, I might add, bravest--anti-corruption advocates. Until his recent resignation, he was Kenya's first anti-corruption czar, aggressively investigating cases of large-scale corruption within the new government. Prior to that, Mr. Githongo was Executive Director of Transparency International in Kenya. He remains a powerful advocate of good governance and anti-corruption efforts across Africa. Huguette Labelle is currently Chancellor of the University of Ottawa and Vice President of the International Union for the Conservation of Nature. She joins us today in her capacity as a leading proponent of improved global governance and anti-corruption initiatives, signified by her serving on the Board of Directors of the United Nations Global Compact and, I would say, most significantly her key role as Chairperson of the Board of Transparency International. Mohamed Ibrahim, or Mo Ibrahim, as he is referred to at the IFC, where he is one of our good partners, is Chairman of Celtel International B.V. In building a major business which operates cellular networks in 14 African countries, he has 6.5 million customers and revenues of $1 billion. Mr. Ibrahim has had to join the battle against corruption first-hand, and we are delighted that he will share his advice and views on tackling corruption from the private sector perspective. Finally, but by no means least important, Nuhu Ribadu is leading the efforts of the Nigerian Government to tackle corruption in his role as Chairman of the Economic and Financial Crimes Commission in Nigeria. He has demonstrated remarkable personal leadership in the fight against crime and corruption and has been recognized with several awards as a police officer, prosecutor and the Chairman of the FCC, where he is a strong figure for national anti-corruption efforts. I hope he doesn't mind if I tell this on him--when I was in Nigeria in July, he was part of a team briefing me on the impressive efforts of the Nigerian economic team, and after he described some of his work, I said, "Isn't it dangerous?" and he said in a matter of fact way, "Well, yes. Two of my people have been murdered." He is conducting himself at great personal risk, and I commend his courage in the face of real threats. It is a difficult subject, it is a challenging subject, but it is a critically important subject, and I thank all of you. Now, Mr.--if I may call you Dele--please take over. Thank you. MR. OLOJEDE: Thank you. Can everyone hear me? All right. Thank you, everyone, for coming. To simplify the process, I have just made a slight adjustment to our program. I am going to ask our panelists to make brief statement to open the session before I invite Frannie and Michael from the World Bank and the IFC to pose some general questions, and then we'll take it from there. We fully intend to involve the audience directly in this conversation. We want it to be a conversation, so we are going to try to make time available to you to ask questions and to make brief comments as you see fit on this very interesting subject. So, Paul, if you would lead us off by making an opening statement of what your thinking is with regard to the subject at hand. MR. VOLCKER: Well, let me say I hadn't really expected at my advanced age to be at a World Bank meeting in Singapore, talking about corruption. But the truth of the matter is that my interest has been sharpened by my recent experience with investigating the UN's Oil for Food Program. It seems to me a prime example of good intentions being thwarted by corruption, and that corruption not only limited the success of that program, but it raised, as you know, very real questions about the competence of the UN organization. And I would emphasize that without a percent of confidence in the organization, or any organization, it is difficult to maintain support and legitimacy. That concern has been reinforced in the last few days by the tragic event in Moscow. Andrei Koslow was a brave young man on a patriotic mission to restore a sense of integrity and confidence in Russian banking. It must have been a lonely effort. His murder is a dramatic reflection of the corrupt forces resisting governance reform. So, yes, I do think this is a crucial matter. The battle is joined. It has real implications for the World Bank Group and its lending. And I do want to concentrate just for a few minutes on the World Bank responsibilities in particular. The preface to that is that I think it is now generally recognized and accepted that corruption is a major obstacle, and in some countries, the major obstacle, to effective economic development. The simple fact is that that has been increasingly recognized by the World Bank itself, and in that light, let me just say right off the bat that it is fatuous to suggest that a serious attack on corruption in borrowing countries, including in the last analysis a threat or the actuality of denying loans, is somehow inconsistent with supporting the development goals of the World Bank Group. The contrary is much more likely. Failure to deal with corruption undercuts development. It will limit, more likely more than offset, any value added in new lending. Now, that's awfully easy for me to say. What is difficult, what is practical and difficult, is how to do about it, how to be effective in combating corruption. And I am in a position, happily, of having colleagues up here with years of experience in this area that will be able to explain more fully how to implement my general prescription. I do think that this session and the questions that have been posed to us emphasize the potential of partnership. But I think my main point will be something different--that the key to dealing with corruption will be leadership, leadership certainly in the multilateral institutions, but in lending countries and in borrowing countries and in private companies and in NGOs. The message really needs to come from the top. It has to infuse the culture of all the organizations, public and private, concerned. As I thought about it, I thought a reasonable starting point might be to take a leaf from Nancy Reagan, with her old anti-drug slogan--"Just Say No." After all, corruption is a kind of addictive drug, and I know that some companies enforce that approach, but I also know that slogans aren't enough. Private companies, public institutions, NGOs, I suspect can do more by in effect making that kind of pledge publicly and jointly, in particular countries or more generally. They should have a common approach toward conflicts of interest, financial reporting, ethical standards, and transparency--all that helps as part of good corporate and public governance. But still, I am not so naive as to think that a plea for voluntary cooperation by itself is going to do the job. It seems to me entirely legitimate that with respect to individual loans, that the Bank be assured that really effective independent oversight and auditing arrangements are in place. I know that in general that has been the intent in the past, but my sense is that it may need to be toughened up, and particularly when experience has been that a particular country will require strong Bank oversight. I think it also implies a strong internal Bank inspection function, and it does seem to me that we have reached a point where that inspection function has to be thought of not as an unwanted addendum to the Bank but as an integral part of the Bank and the Bank Group, right up there with the lending function itself. Now, of course, that kind of thing is intrusive, but I see no real question of national sovereignty involved. That seems to me a false hair. We are talking about voluntary lending programs, and if corruption is found, and remedial action by governments and businesses falls short, then, suspension of lending programs is certainly justified. The more difficult case is when the concern is not confined to a particular loan but when the country and its government are broadly and deeply corrupted, embedded in longstanding traditions and culture. Then, maybe a different approach at the start is needed--consultation, step-by-step criteria for change, maybe the indicated course. But again, in the end, if there is recalcitrance or progress isn't made, disbarment may be the natural and needed choice. Now, those are very general statements. The policies need to be more concrete. I think it would be very helpful if they were spelled out in program guidelines in the Bank. And this is an area, it seems to me, that calls out for consultation and partnership with private parties and NGOs. And I understand there are models to be followed. In the past, there was interesting improvement in Hong Kong in that area. Right now, I understand that Dubai, which has not had the clearest reputation for transparency and forwardness, has been working very hard experimenting with an international financial area with the highest standards, anti-corruption and otherwise. But I'm getting ahead of the discussion. Let me just conclude with a simple declaration of faith. The greatest threat to development and, ultimately, to the Bank itself would be to sit back and be passive in the face of this challenge. To take the view that its job is to lend freely whenever a perception of marginal benefit seems to justify it is not the right approach. Then, I think support for the institution and the effectiveness of its programs is sure to erode over time. My impression is that the corruption problem may be getting worse. It needs priority attention--attention by the Bank and elsewhere. I know of no institution, by its leadership, by its professional staff, by its standing in the world, that should be better-equipped to take on that challenge. Thank you very much. MR. OLOJEDE: Thank you, Paul. The New York Times told us a couple of days ago that even the rather modest efforts that Paul Wolfowitz has been making within the Bank itself have been meeting with some resistance--hopefully, not as much resistance as people like Nuhu Ribadu faced--at least, Paul, to my knowledge, no one is threatening to kill him. So, Nuhu, if you would give us some of your thoughts on this. MR. RIBADU: I thought I was going to come last. Well, thank you very much, Mr. Olojede. Let me start by thanking the President, Mr. Wolfowitz, for inviting me. Thank you very much. You came to Nigeria, and you listened to us, and we thought it was important that we should come--the foot soldiers who are involved or directly engaged in the fight against corruption and the establishment of good governance in developing countries, the countries that suffer as a result of corruption, who are really at the receiving end of all the bad things we are talking about. And I think it is important--it is great--that we can see a changed world, really. The fact that I could get an opportunity to talk to you itself is a new development, and we thank good leadership like you are giving, Mr. President. Well, I am here to just share with you our experience, what is going on in Nigeria, and tell you that probably the biggest challenge facing the world development is corruption. \When I talk of corruption, I'm talking about mismanagement, incompetence, abuse of office, not doing things properly and correctly, inability to establish justice and fairness, not doing this properly and correctly--and that is the only difference between the developed countries and the developing ones. We know what corruption is doing to us. We know what corruption has cost us--it has denied us the value of our resources, both human and natural. It breeds injustice. It causes killings, the diseases that ravage us almost everywhere. It turns us into a country of people who live on the kindness of others and we are very angry. This is not what we want, and this is not what we are going to allow to continue. Some of us are saying "Enough is enough." I am talking about corruption today. It is we, those who are at the receiving end, who are calling for a change--change, first of all, in how we run our affairs, how we manage our affairs, and then also, change in the world--let the world listen to it--hopefully will help--not giving us charity but, rather, to help us address some of these fundamental problems. We do get some not really happy people to see, then, that the world is calling for how to help us, to feed us, calling for making poverty history. Daily, every day, you open the television, you see horrible pictures coming from us. We think that it cannot just continue like that. We are tired of living on the kindness of others. The only way we can change this is also if we can do very well like the rest of the world, and we are talking about management. There is no difference between us and the rest of the world. Instead of making poverty history, we should make mismanagement and corruption history, and we will set ourselves-- MR. RIBADU: And it is happening in Nigeria today. I can tell you that and assure you that in this short period of time, two or three years, we have set up the reforms in Nigeria. We have turned Nigeria into a country at the head of the war against corruption. We are already seeing some changes. We are seeing the benefits of it. For you to do that, first and foremost, you have to get good leadership--a homegrown program, people who believe that you have to change. And I think we are lucky today that we have good leadership in the country, leadership that is fairly transparent and open, leadership that allows this kind of work to go on, leadership that is ready to take and confront the problem. After that, some of the problems facing us have to be addressed through law enforcement. This is extremely, extremely important, because lack of law and order and rule of law is the cause of all this. Where you have rules, where you have law, chances are this will be done properly and correctly. In Nigeria, what we did was to come up with a program to ensure that we establish rule of law, first and foremost, do things properly and correctly, and through that, we can fight the corruption that we are talking about. I am the one who is heading the Economic and Financial Crimes Commission. It is just three years old, but when we started, we said that we were going to address this problem. How do we go about it? First and foremost, we said that we were going to go after the bad people who are responsible for some of the bad things that happened to us--we would bring them to justice. We showed the world that in Nigeria, there is going to be rule of law, and that nobody is going to be above the law again. Today, we have recorded about 82 convictions in a country that never had one before the coming of these reforms. Within this short period of time, we have recovered over $5 billion. It may not be important, but it is very, very significant--it is showing a change and giving us a new direction. It is showing that we can do it ourselves. It is not something that is coming from the outside; there is nobody imposing it on us, but we are asking for people to understand and to come and help us. The nature of corruption itself, a country cannot address it alone; it has to get support from outside. And we are fairly lucky that since there are changes in the world--maybe September 11 changed the world--maybe September 11 has let small, poor countries like Nigeria to take advantage of it. As a result of it, we have the new anti-money laundering law. As a result of it, we have an FI, Financial Intelligence Unit, that talks with the rest of the FIs in the world. As a result of it, the world is coming to look critically at the finances. As a result of it, those who stole money from the poor countries of Africa and the rest of the poor countries are finding it difficult to have safe haven where they are going go keep this money. It is helping us in addressing the problem locally at home. In Nigeria, we had a leader who took $6 billion from the country and took it outside; most of the money was kept in the Western world, in the finance sector of the world. Today, maybe 80 percent of the grand corruption that takes place in Africa goes out, is kept somewhere. We are working, and we have been able to establish very good linkages with law enforcement agencies all over the world, with the metropolitan police, and I want to seize the opportunity to thank them extremely, extremely, because they helped us by coming after those people who stole this money and are keeping it. They are helping us to address the problem locally and internally. We are working with the FBI, BK of Germany, Interpol, and so on, and it is making a difference. I hope--hope--that we are going to get more of this support from international bodies like the World Bank, the IMF. The World Bank is one of the first agencies in the world that came up and supported us. They gave us $5 million, and that $5 million they gave us in two years made a massive difference in the country, because it came at a time when we were going after members of the National Assembly, the President of the Senate. The number three person in Nigeria, we brought to justice, as a result of which we were threatened. We probably would not have gotten some money. Eventually, we did, but the money came in very handy. Today, we are fighting literally every big person. We have brought ministers to justice. We have brought the chief law officer to justice. We have governors in Nigeria imprisoned. We have almost all the powerful ones. We will not survive until we get the support of the outside. The battle, the war, is going on the ground in Nigeria. But we are small, tiny. We may not really see success until and unless, of course, we get the support. I think that's an introduction. Let me just stop there. Thank you. MR. OLOJEDE: Thank you, Nuhu. Thank you very much. MR. OLOJEDE: Nuhu has just taken us through what it feels like to be, as the miners say in South Africa, "at the coalface." One of the things that has come through these introductory remarks is the idea of collaboration, and who is better-placed than Huguette Labelle to take us through that, from your vantage position as head of Transparency International. MS. LABELLE: Thank you very much.It's great that all of you are here this afternoon and therefore recognize this as a very, very central problem of our day. I like very much your point of making corruption history. This is something we must keep in mind. Let me illustrate by one example a number of points that I want to make. Our National Chapter in Senegal, the Transparency International Chapter, decided in talking to their colleagues in civil society that the whole field of health and health delivery in that country was a significant problem and had a significant corruption problem. With the support of the Ministry of Health and the support of the President's office, and the support of a major bilateral donor, they undertook a very extensive and intensive study of the health delivery system in that country--20 researchers working for nine months in over 20 health institutions, clinics, hospitals, regional health units, Ministry of Health at the national level, local governments and what they came up with was a very, very interesting story as to not only was money leaking out of the system at all levels, right to the front again. What they saw in those institutions was vaccines and antibiotics being diluted or replaced by water so that the effective agents could be sold; they saw some of the medications sold to street vendors who then--you might come with chest pain, and they would say, "Let me see" and pull out a box which could have been aspirins or something else. They saw how medical doctors in certain situations were directing patients who would come to a public clinic into their private clinic. They saw people who had to be turned away because they could not pay the bribe that was asked when they brought a very sick child to a clinic. And--much more--they saw equipment manufacturers coming and bribing extensively to have their equipment bought, which meant that a much smaller quantity of equipment could be bought, whether x-ray machines or otherwise. So the interesting part is not so much that this was a detailed study of the health system in that country it’s what happened after; and Transparency International of Senegal was able, with the support of the government of that country, to bring together all the people that needed to be part of the solution to get very extensive debriefings. And at first they were extremely resistant, these were the doctors, they were the nurses, the pharmacists, the drug companies, they were the equipment providers. But the users of the system were also there, those that had been patients. You also had, of course, the Ministry of Health people. What happened is that this group of people from civil society, professional organizations, providers and so on, eventually agreed that this could not continue; that together they would try to fix this situation, find ways of preventing it. They asked our chapter not only to facilitate the process but to monitor its implementation over time. What did we learn there? We learned that you need to have all the right people around the same table. That civil society had a very important role to play: the providers and so on. We also learned that you need to get at the real data. Paul Volcker and his commission was part of getting at that. It’s hard to solve a problem if you don’t know what it really is. You needed the leadership and the support and the will of the government of that country for that to really happen. Of course, you needed the people to agree to work in a sustained basis. You needed to relook at your financial system and at your justice system to…. that it was effective in dealing with those situations. And of course, transparency kept coming back to the fore; transparency into budget allocation, all the way to the front line, to prevent those leakages. I’ve certainly had experience and seen where that happens. That it is a tremendous deterrent for those leakages to happen therefore, that was the key. Obviously, partnership there was vital, the support of the donor community was vital as well, it all was part of the whole. I think what we found out too is that you can work at the national level--which is important--but eventually you need to start looking at sectoral programs, whether it’s customs, or whether it’s education, or health, or others. Otherwise, you don’t get at those imbedded systems, which this was able to demonstrate. Let me just make a few other points beyond this I think that the very sad murder that happened a few days ago in Russia demonstrates that corruption kills. Not only does it kill because people do not have the services that they should have because money is out somewhere else that should go to development. Not only does it kill because when the service is available, people can’t pay the bribes that are very often asked for its delivery. But it also kills in a very different way, money that is siphoned off into fiscal havens, laundered in a variety of ways, comes back either through the drug trade, through illicit weapons trade, comes back into the country to buy votes, and we could go on. The forces that are there to try to ensure that these things continue are very strong. Without the partnering of all the key people that has a stake in solving it, we won’t solve it. If I just look at this money laundering situation you were pointing out, basically you need the regulators, you need the central banks, Paul, you need the major banks, the major investment firms, you need the accounting area, you absolutely need the security services, and many more. But unless we find ways of getting around these major problems of our society, the right people around the same table working in full partnership, it won’t work. This is why, Paul Wolfowitz, we welcome the strategy that you’re proposing, because to us it’s part of that solution. And hope that it’s implementation will include all the people in society that need to be involved in finding the right solutions at all levels: internationally, nationally, and locally. Thank you. MR. OLOJEDE: Thank you. Thank you, Huguette. I will now go to Mo, Mo Ibrahim, who funded and runs a company, telecom company called Celtel, which basically focused on how the rough neighborhoods we’ve been talking about. He, in particular, takes Paul Volcker’s injunction to heart, which is, just say no. I invite him to tell us how easy it has been to operate in these countries on the principle of just saying no to all kinds of corrupt demands and inducements. MR. IBRAHIM: Thank you. Thank you very much, and I’m glad to be here. So just essentially, I’m going to tell you a story about how we went about to build a business in sub-Sahara Africa, which is supposed to be one of the most difficult areas according to your reports. It was about ‘98 when we founded Celtel. I come from the mobile industry, I’m an engineer, civil engineer, etcetera, designed a system in U.K. I was executive director with BT, and then I started my own company: MSI. We design most of the cell systems in Europe actually, we made a lot of money with this company; sold it for $1 billion, so I had some money. But what happened is, around that time I looked around, there were tremendous activities among telecom companies to acquire assets in Europe and here in Asia, at extremely high prices--sell our assets, I mean, mobile communications. And nobody was interested in Africa, I remember once I was talking to the senior executive from Bell Company in U.S., a board member, and I told him, “Look, Uganda, we received a request from them to build a cellular network, so we would like to come and to do that.” And he said, “You crazy. I mean, you want me to go to that country run by terrible called Idi Amin?” I said, “John, Idi Amin left 15 years ago.” MR. IBRAHIM: I said, “Actually, this proves my point.” I am the most enlightened man on my board. Maybe I’m the only guy with a passport. If I think Idi Amin is still there, what do you think the rest of my company-- MR. IBRAHIM: You think Ugandans still live up in the trees.I’m an African, I’m a Nubian, which is very old African race one of the oldest African races. I always have quarrels with the Zulus, but we think we’re older than them. That’s another issue. Really, it helped me a lot, because I know Africa. And yes, things are not perfect in Africa. But the picture or the image of Africa abroad is really much worse than reality. So that person said, “Look, we will go and build mobile communications in Africa.” At that time nobody wanted to touch Africa at all. So I started Celtel and everybody said, you are crazy. How are you going to deal with bribes, corruption? You are going to lose your shirt over there. So what we have done actually is very simple, which I would like to share with you. First, I got a fantastic board in my company. Of course, it’s a company; it’s a business, so we had the right business and telecom people. I remember I had Sir Went, the man who founded Vodaphone, chief executive of Vodaphone was at my board, deputy chairman. I got deputy chief executive of British Telecom--the right telecom people were in my board. But then I went, I got people like Lord Pryor, who is a very senior minister with Margaret Thatcher, very special figure. Got Salim Ahmed Salim, who just stepped down from the--was Secretary General African Union, who’s South Africa. This was statesmen of the board. Then the World Bank IFC wanted to put some investment in our company and we said, “Look, if you want to put money, you need to give us a director on the board.” They said, “No, no, no, no, no, we don’t put people on the boards because of conflicts.” I said, “No conflicts. If there are any issues, we can walk out of the room. Conflict, we don’t want any.” But we need what are called corruption repellents, so we got a senior director from the IFC in our board. Then CDC, which is the British government, sent a director to us, [they] invested, but also put a director there. (Inaudible) from Holland, DEG from Germany. We had a wonderful board here. Had a board of 12 people; very eminent people. Maybe I’m the lesser person on those, and I had to chair those guys in board meeting. So it’s better thought for me to stuff. Anyway, that’s how one of the things we put in place to get really a powerful board. Then we put out a very strong message from day one we said, not a single dollar was given away. Can you spell that? Not a single dollar would--repeat after me--not a single dollar. Say, “Okay, then he signed his employment contract.” He joined the company. It’s a matter of culture we need to create a culture in the company say, “Look, we’re very good in our business we’re some of the best telecom people around, we know that. But we’re also very honest people, we’re going to do business cleanly.” That is very important. So that is how we started our business. To our surprise, it was very easy actually, our assumption that those crocodiles sitting out there waiting to swallow us the moment we land at the airport actually were not there. I start to ask the question, I said, “Is it possible that we, the business people, are actually the guys who create corruption? Could it be us who’s begetting that?” We land in a country. Usually it is not a very nice capital compared to where we came from. The food is not fantastic, the hotel is bad, and you are missing your baseball game, and your wife phoning, when you going to be back for the weekend, and you try to cut corner. You think are cutting corners by stuffing a brown envelope in somebody’s pocket to go home in time. So that’s food for thought, because genuinely we had really little problems in the countries. It doesn’t say things were always smooth. Three times went to court and we won every single case, to our surprise. And our board people said, “Courts work in Africa. Can you believe that?” It works. We won our three cases in court in Africa. We got under pressure sometimes but we stand. Obviously, okay, do you want something? Fine. I’m going to take your request to my board, and I’ll come back to you because what we’re a BV company. Our board has really--it’s true--has full executive power actually, by law. So I cannot sign check for you. I’m going to take your request to the board, and sit down. Said, “okay.” MR. IBRAHIM: What we did also was to really engage the society. So we say, “Look, Mr. President, we’re going to build a wonderful medical center here. And why don’t you call it your wife’s name or your daughter’s name? Great, And you come and open it, you get a lot of credit for that.” We dig a well here, we do something here. So we have really a lot of social commitments, and we don’t care what you call it at the end as long as it is for the people. And that how we dealt with this. As a result of that, we managed to--I arranged to have a map here. The IT people said--promised to put a map and they forgot, obviously. SPEAKER: I think there it is. MR. IBRAHIM: Right. Now look at these countries we are working in. We work--I think we need to update the information that Paul gave to you. We have 17 million customers in 15 countries, all of them in sub-Sahara country. And according to your people actually, the top country in your list here is Burkina Faso, is number 70. Most of our countries actually are in the hundreds. And we have the owner--actually, the last country is one of our countries, Chad. (Inaudible.) So we did operate in some of the most difficult places. But as I said, by making a stand from the outset, people knows, nobody will come to you. The problem, you feel generous, you want to go and stuff money in the pockets, et cetera. Fine, people will take your money. But it is stupid. And I’m talking to our business colleagues around here. Bribes erodes your margin. When you start to pay, it will never stop. You give the minister of telecom, then there is a regulator, then there is the finance telecom, then there’s a prime minister, then there’s a president. And guess what, next year you have a different finance minister, different-- MR. IBRAHIM: It never ends. Really. It never ends. It erodes, really erodes your margins. Something else, it is a quality of your company, the value of your company. We were taking our company public last year, and we were inundated with offers. A lot of companies wanted to buy us, because everybody knew was squeaky clean, there’s no skeletons it’s so easy for them to do due diligence on us. As a result, we ended up selling the company for $3.4 billion, do you know what you mean $3.4 billion? Total investment was $400 million. That’s an average return of eight times. Eight times average of return for our shareholders. Why? Because the company was squeaky clean, successful and squeaky clean. That creates value for our business. |
