In many countries around the world today, governments are designed not primarily to govern but to serve the personal enrichment of ruling elites. Kleptocracy is the term used to describe such ‘government by thieves’, whereby top political elites systematically raid state resources with impunity. Kleptocracy is enabled by the absence of democratic checks and balances on those in power. Kleptocratic governments undermine the rule of law, subjugate the courts and media, and deploy state security services to enrich the ruling elite and pacify the population. Kleptocracy is largely responsible for creating and perpetuating many of today’s global crises, including acute poverty and hunger, war, religious extremism, and global inequality.
While kleptocracy is not new, in recent decades financial globalisation has enabled kleptocrats, via professional intermediaries in banking and law in established democracies, to readily hide their stolen funds in offshore structures, business networks, and multimillion dollar properties in the West. Enabled by globalised finance, kleptocracy has now become a significant threat to democracy.
The Middle East and North Africa
Kleptocracy is a major factor fuelling instability across the Middle East and North Africa, and is a major factor driving Islamic extremism in the region. Every government that faced significant mass protests during the 2011 Arab Spring, from Tunisia, to Egypt, Syria, Bahrain, and Yemen, was a kleptocracy which perpetrated acute corruption on behalf of top government officials. The overthrow of these long standing corrupt dictatorships was the primary aim of the millions of protestors who took to the streets during the Arab Spring uprisings.
In Thieves of State, Sarah Chayes outlines how state structures in kleptocracies are expressly designed not to execute functions of governance, such as economic development, public safety, education, and healthcare, but are instead engaged primarily in extracting wealth for the benefit of those in power. According the Chayes, kleptocratic states may have multiple elite networks operating in parallel, giving rise to multiple centres of power, with the country’s leader acting as a central figurehead who may or may not exercise overall control. Chayes points to the leading role of the military in Egypt’s kleptocratic system, enabled by its major role in running state enterprises. In Tunisia, in contrast, the financial system played the major role in the kleptocratic system under President Ben Ali , who was ousted in the Arab Spring.
The malpractice of kleptocratic governance typically results in the neglect of state services and the persistence of widespread poverty among the general population, even as the elites prosper. In addition, the security services in klepocracies, as well as being deployed to suppress dissent, are also themselves kleptocratic in nature, extracting bribes and extorting citizens on a daily basis. This combination of stalled economic development, daily harassment at the hands of police, and visible wealth of ruling elites, was behind the uprisings across the Middle East and North Africa in 2011. The response of some of the region’s entrenched dictators, particularly in Libya and Syria, however, plunged the region into violence. The wars in Syria, Libya, Iraq, and Yemen, and oppression in Egypt and elsewhere, have crushed the hopes of millions and helped swell the numbers of those seeking to bring about change through violent means. The major beneficiaries have been religious extremists who argue that strict religious morality is the only solution to the gross immorality exhibited by the region’s governments. Kleptocracy, and Western democratic powers’ role in abetting it, continue to be major contributing factors to the rise of Islamic extremism across the region.
Resource Kleptocracy and War
The Democratic Republic of Congo (DRC) is one of the poorest countries in the world. It is also one of the richest in natural resources, with an estimated 45% of the world’s cobalt reserves, about 25% of all global diamond reserves, and the world’s tenth largest reserves of gold. The DRC has also been ravaged by the largest wars in Africa’s history, which have so far cost the lives of over five million people. The DRC’s wars and endemic poverty can both be attributed largely to a form of kleptocracy, resource kleptocracy, which involves the plunder of the DRC’s rich natural resources for the personal gain of warlords and government leaders.
Around US$4 billion is estimated to be lost to the state annually due to corruption and fraud. The vast majority of this wealth is thought to flow to politicians, government officials, security force commanders, and community leaders. As a result, the DRC ranks as the world’s worst country in the Verisk Maplecroft Corruption Risk Index. According to the African Development Bank, the DRC’s per capita income in 2011 was below the level it had been in the 1980s.
Despite the fact that it has resulted in the highest death toll of any war since World War Two, the Congo wars rarely make headlines. One reason is that most fatalities have resulted from neglect, rather than from direct violence. Only an estimated 2 percent of the 5 million fatalities in the wars have been directly caused by violence. The vast majority of deaths have instead been caused by easily treatable diseases, and widespread malnutrition resulting from displaced populations fleeing the fighting. Many of these deaths could have been prevented if the DRC had more developed infrastructure and public services, funding for which has been directed instead into the hands of DRCs klepotcrats.
The DRC is just one country suffering from this so called resource curse, which refers to the paradox that countries with an abundance of natural resources tend to have less economic growth, less democracy, and worse development outcomes than countries with fewer natural resources. Other countries severely affected by wars fuelled by the curse of resource kleptocracy include Nigeria, Angola, Libya, and Iraq.
Putin’s Russia exhibits some of the major characteristics of a resource kleptocracy. Political scientist Karen Dawisha argues that personal networks around President Vladimir Putin have used their political power to plunder the Russian state for their personal enrichment. And Russia’s natural resources are immense. It is the world’s largest exporter of oil and gas, and for the past decade has exported more than all OPEC countries combined. Russian oil and gas are vital commodities in the majority of the world’s most advanced economies.
Russia differs in the form of its kleptocracy, however, by virtue of its history. In Russia today, the FSB, the successor to the KGB, is the main vehicle for political and economic power. The FSB is personally overseen by Putin, and both the courts and the Parliament are subservient to it. Following the demise of the Soviet Union, oligarchs gained control of Russia’s state assets and amassed considerable fortunes in doing so. Since coming to power, Putin has brought these oligarchs under political control, and has placed many so called siloviki – people with roots in the KGB – in positions of power. Security personnel are estimated to make up three quarters of the top echelon of the country’s leadership and one third of the middle level of the state administration.
With the FSB in control, it is not surprising that Russia retains many of the former Soviet methods of political control, including rigging elections, suppressing the opposition, controlling NGOs, and making use of selective violence or incarceration to silence dissent. The security services also retain the power to act outside the law to ensure the compliance of key political and economic actors.
Russia today, however, is not a totalitarian state. It has a vibrant middle class which enjoys a greater measure of personal and political freedom than ever experienced in modern Russia, and the state’s ‘selective violence’ is unlikely to impinge on citizens who stay out of politics. Dissent in Russia, although limited, is more visible than in China, particularly among the young. Putin also enjoys a large measure of popularity due to the belief that he has brought stability to the country after the chaos of the post-Soviet period, and that he has restored Russia to its place as a respected world power. Nationalism, the Soviet victory under Stalin in World War Two, Orthodoxy, and Great Power status are the main elements of the conservative narrative that Putin uses to unify the country.
As political scientist Lev Gudkov points out, however, Russia, in line with many kleptocratic systems, does not offer an appealing vision of the future, but is instead focused primarily on preserving the regime. This defensive posture largely explains Russian foreign policy. While it has generally been seen to be in the West’s humanitarian and security interests to promote democracy around the world, authoritarian and kleptocratic regimes naturally view the spread of democratic values as a threat. Russia’s defensive stance can be seen in its invasions of Georgia and Ukraine to protect ‘Russian interests’ in its near abroad. It can also be seen in the aggressive measures Russia has taken to undermine the institutions and democratic ideals of the West, including backing right-wing parties in Europe and interfering in the U.S. Presidential election. Among the most visible aspects of this campaign has been the use of television, including RT, and social media to spread ‘fake news’ to create an environment in which, because there are no reliable facts and no objective truths, public reflection on politics becomes impossible.
Adopting such an aggressive stance is not without its dangers for Russia. Today, the wealth of Russia’s kleptocratic elites is largely found in offshore structures, business networks, and multimillion dollar properties in the West. A clamp down by western governments on these assets and on the kleptocrats’ professional intermediaries in the West would present a significant threat to the interests of the regime. In addition, Russia possesses the world’s largest nuclear arsenal. The nuclear standoff between Russia and the west today is arguably potentially more dangerous than during the Cold War. Unlike in the Soviet era, when the Soviet collective leadership was in charge of military decisions, Putin’s regime appears to be a highly personalised one in which there are few constraints on his actions, particularly with regard to foreign policy. With Donald Trump as U.S. President, similarly largely unconstrained on his decisions regarding the use of nuclear weapons, the nuclear threat today is at its highest level in a generation.
 Sarah Chayes, Thieves of State: Why corruption threatens global security, W.W. Norton & Company, 2015
 Carl Gershman, Unholy Alliance: Kleptocratic Authoritarians and their Western Enablers, World Affairs,
 Corruption: The Unrecognised Threat to International Security, Working Group on Corruption and Security, Carnegie Endowment for International Peace, June 2014, p 12
 Sarah Chayes, Thieves of State: Why corruption threatens global security, W.W. Norton &Co., 2015
 Quoted in The Sentry, Democratic Republic of Congo Country Brief https://thesentry.org/wp-content/uploads/2015/07/19103553/Country-Brief_DRC.pdf
 Jason Stearns, Dancing in the Glory of Monsters, Public Affairs, 2012, p250
 The Resource Curse: The Political and Economic Challenges of Natural Resource Wealth, NRGI Reader, March 2015, Natural Resource Governance Institute, https://resourcegovernance.org/sites/default/files/nrgi_Resource-Curse.pdf
 Karen Dawisha, Putin’s Kleptocracy: Who owns Russia?, Simon and Schuster,2014
 Scott L.Montgomery, The Conversation, Russia: a global energy powerhouse that’s much more than a petro-state, http://theconversation.com/russia-a-global-energy-powerhouse-thats-much-more-than-a-petro-state-57766
 Lev Gudkov, The Nature of Putinism, Russian Politics and Law, 49:2, 7-33, 2011
 Alina Polyakova, Why Europe is Right to Fear Putin’s Useful Idiots, Foreign Policy, February 23, 2016
 Carl Gershman, Unholy Alliance: Kleptocratic Authoritarians and their Western Enablers, World Affairs, http://www.worldaffairsjournal.org/article/unholy-alliance-kleptocratic-authoritarians-and-their-western-enablers