Welcome back. Here are some more forms corruption can take. The last video described the corrupt transaction in Egypt. A tiny, tiny fraction of the Egyptian population is immensely rich, the most Egyptians or not. More than half the young men who joined the Egyptian Air Force to train as fighter pilots have a rickets. rickets is a disease that affects only those who experience malnutrition as children and young man accepted by the Egyptian Air Force has potential pilots are drawn from the upper regions of Egypt's middle class that tells you all you need to know about how well people lower down the social scale are doing.
The $20 I described given to that customs officer in the last video was probably enough to feed his family from all the week. Poverty in Egypt is severe and it's everywhere. Not ever country in the Middle East is in that condition. Take Qatar, for example. Qatar has vast reserves of high quality oil, and it's immensely rich. The population of Qatar was 2.6 million.
But only about 300,000 of those are Qatari citizens and every one of them is loaded. That's not something even safe for the larger numbers of migrant workers who do all the dirty jobs. A few years ago, a middle ranking manager in Qatar's Public Works Department agreed to try a product line and showed him we the manufacturers would supply material free of charge, and they would monitor its performance for six months after being applied. Excuse me the catch was that we were not allowed to apply the material ourselves. It had to be applied by a local contractor, chosen by the pw the manager. That contractor told me He wanted 50,000 US dollars to apply the material.
I said it should cost a maximum of 5000. And that was being generous. And the contractor said, if you don't pay me $50,000, your material will fail. Straightforward blackmail. That's how it is in Qatar. It's a country that demonstrates perfectly that the more you have, the more you want.
I refused to pay the $50,000 bribe. And there were two reasons. The first was salespeople talk to each other, whatever companies they work for. And so I knew that there were other companies being asked for the same amount of money for the same contract. That meant that paying $50,000 was no guarantee that we would win the deal. And the second reason was, I knew it wouldn't stop there.
Every time another order was placed, they'd want more money. It's unlikely we ever have earned enough profit to get the $50,000 back. Never mind what we had to pay for future orders. And if you wonder why the pwd manager was so helpful to a local contractor The answer is simple. Those $50,000 payments will be split 5050 between the contractor and the manager. I love the 40 years I spent an international sales but it didn't make me something but cynic.
Here's another example from a different country. The government department I dealt with was buying a cheap product in China, and it was failing within six months of application. I showed them our equivalent. It costs 40% more than the Chinese product, but it lasted not less than three years. The civil servant I was talking to said if it lasts six times as long I need six times the commission. My commission the amount bribe it isn't always government employees who want to be paid off in a number of countries around the Arabian Gulf government officials and business owners and nationals of the country, they're doing well.
And as long as we exclude Qatar, they don't themselves look for bribes. But nationals of these countries don't want to do jobs they think of as boring and that includes procurement. And so the procurement staff tend to be citizens of other poorer countries. They come to the Gulf on three contracts. They don't have a very high salary, but they are determined that when they go home, they will put together a decent pot of savings. And they do.
Where does the money come from? It comes from you, the people selling to their companies. What happens is you sell to the owner or senior management of the company who are locals and not corrupt. They tell procurement staff to place an order with you. That's your job finished right? Well, not quite.
The securement staff are going to want to be paid to issue that order. They will Ask for a lot. It might be as low as 5% of the total order value or even less, but they will want payment, they will ask for it. And if you don't pay, you won't get the order whatever senior management for the owner might have decided I could go on. There are lots of other ways in which corrupt people will seek to extract money from you. We may come across some more of them as this course proceeds.
But for the moment, it's time to talk about the legal background, and the laws that exist to prevent corrupt transactions from taking place. That's the subject of the next video. I'll see you there.