Soros planning fund to combat corruption in new democracies

Fighting corruption The billionaire investor and philanthropist George Soros is planning to set up a fund to combat corruption…

Fighting corruptionThe billionaire investor and philanthropist George Soros is planning to set up a fund to combat corruption in a number of emerging democracies throughout Africa and the former Soviet bloc following an aborted initiative in Georgia.

Mr Soros, who operates one of the world's largest private investment funds, is famous for having made $1 billion by betting on the devaluation of sterling in 1992. He is also the founder of the New York-based Open Society Institute (OSI), a private foundation which aims to shape public policy by promoting democratic governance, human rights and economic reform.

Speaking to The Irish Times in London last week, Mr Soros said he was seeking to promote "an anti-corruption fund" in countries where regime change was on the cards. The aim of the fund is to pay government officials a "decent" salary and thereby remove the need for them to earn extra cash by hustling for bribes.

"Something radical needs to be done whenever you have a newly democratically elected government, which doesn't have the resources on its own to prevent wholesale corruption," Mr Soros argued. "Revolutions do not necessarily lead to open societies."

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Countries mooted by Mr Soros and the OSI for help in dealing with corruption include Kenya, Senegal and Nigeria.

According to Mr Soros, the creation of the fund in Georgia enabled president Mikhail Saakashvili to form an effective and stable government there over a year ago. Mr Saakashvili came to power following a popular uprising against the leadership of former president Eduard Shevardnadze in late 2003.

In conjunction with the United Nations Development Programme, the OSI set up a fund to support governance reforms in Georgia with seed money of $2 million. A further $6 million was sought from international donors. The fund was used to tap the expertise of the Georgian diaspora by offering incentives to those who choose to return home to work in public service. Civil servants, traffic police and custom officials were offered decent wages in a bid to purge the system of corruption.

But Mr Soros said the fund collapsed after six months following accusations by opposition politicians that Mr Saakashvili's government was in the pocket of the billionaire. He said: "I was accused of paying off the Georgian government but I wasn't responsible for selecting the officials who were being paid."