Sunday, November 7, 2010

How do we break the corruption cycle?


Public perceptions of corruption in governments across the world highlight the intense degree to which corruption continues to exist and ruin lives. For the poorest nations, in particular, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure.

A small number of countries continue to be widely perceived as virtually free of corruption — Finland, Iceland, Denmark and New Zealand. By contrast, the peoples of dozens of countries continue to be seen as the victims of rampant corruption perpetrated by politicians and civil servants who abuse their public positions for personal gain. For the past dozen years, Transparency International has annually published a corruption perceptions index; this year's report, the largest ever ranking 180 countries, again shows that corruption remains widespread and a serious obstacle to poverty alleviation and economic growth.

There are examples of positive change. Most important, a number of countries, including some of the poorest, have achieved improvements in their rankings, such as Namibia, Seychelles, South Africa, Swaziland, Costa Rica, Croatia, Cuba, Czech Republic, Dominica, Italy, Macedonia, Romania and Suriname. But 40 per cent of the countries with a score of 3.0 or less (a score of 10.0 means squeaky clean) are classified by the World Bank as low-income countries. Somalia and Myanmar share the lowest score, 1.4, in this year's index.

Poor countries face enormous challenges battling corruption in an environment of severe deprivation. But corruption is not simply a problem of poor countries, as continuing corporate and government scandals show. And with the cross-border nature of corruption in poorer countries, rich and poor nations share the heavy responsibility of breaking the corruption cycle.

Corruption isn't just brown envelopes slipped under tables or passed in dark alleys. Too often, it has meant wholesale theft of public resources by leaders and senior public officials exploiting pliant or non-existent enforcement systems. Billions of dollars of this money, so desperately needed in the poorest countries, has quietly traversed borders and been comfortably nestled in bank accounts in the financial centres of some of the wealthiest places on Earth.

That developing countries face such barriers in terms of recovering their money seems like a slap in the face. There are steps that can be taken, by many different stakeholders, to help stop this injustice and return money to countries that desperately require funds to improve the lives of their citizens.

To begin, developing countries should use aid money to strengthen their governance institutions and ensure that strengthened integrity and corruption prevention is an integral part of their poverty reduction programs. A key institution to reform is the judiciary. Corrupt judicial systems facilitate corrupt politicians. Judicial independence, integrity and accountability must be enhanced to improve the credibility of justice systems where corruption is high. And a clean and capable justice system is essential if developing countries are to manage the complicated and opaque legal process of recovering stolen assets parked abroad.

When the institutions of corrupted countries cannot protect the lives and interests of their citizens, the international community — civil society, business and government — must step up and act. Eradicating safe havens for stolen assets, as prescribed by the landmark United Nations Convention against Corruption, and the development of uniform expedited procedures for the identification, freezing and repatriation of the proceeds of corruption are essential steps. So, too, is the recent launch of the UN and World Bank's Stolen Asset Recovery Initiative, designed to help less developed countries recover stolen assets stashed abroad. Clear escrow provisions for disputed funds are essential.

The world's wealthiest governments must strictly enforce the OECD Anti-Bribery Convention, which criminalizes the bribery of foreign public officials. Lack of compliance with the convention's provisions continues to hinder corruption investigations and prosecutions.

Wealthy countries must also acknowledge their role and regulate their financial centres more strictly. Focusing on the roles of trusts, demanding knowledge of beneficial ownership and strengthening anti-money-laundering provisions are just a few of the ways that rich governments can tackle the facilitators of corruption.

Multinational companies have to do more to clean up international business. They must not only introduce but implement effective anti-bribery codes, and ensure that they are adhered to by subsidiaries and foreign offices.

Finally, civil society has an essential role in strengthening the accountability of governments, bringing expertise on technical issues and helping to stimulate demand for reform. In both high-and low-income countries, governments must ensure there is space to operate.

The international community must work together to take these already accessible steps to stop corruption and ensure that developing countries have the resources to improve their citizens' lives. Working together is the key to ensure that the corruption perceptions index is the bearer of good news.

Huguette Labelle is chair of Transparency International.

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