These are some of the views and reports relevant to our readers that caught our attention this week.
Illicit financial flows growing faster than global economy, reveals new report
$991.2bn was funneled out of developing and emerging economies through crime, corruption and tax evasion in 2012 alone, according to the latest report by the Washington-based group, Global Financial Integrity (GFI), published on Monday. The report finds that, despite growing awareness, developing countries lose more money through illicit financial flows (IFF) than they gain through aid and foreign direct investment. And IFFs are continuing to grow at an alarming rate – 9.4% a year. That’s twice as fast as global GDP growth over the same period. Though China tops the list of affected countries in terms of the total sum of money lost, as a percentage of the economy, sub-Saharan Africa was the worst affected region as illicit outflows there average 5.5% of GDP.
Development’s New Best Friend: the Global Security Complex
International Relations and Security Network
The United Nations’ blueprints for the upcoming Sustainable Development Goals (SDGs) reveal an interesting trend. Whereas the Millennium Development Goals (MDGs) focused exclusively on development initiatives, the SDGs look set to interweave security into what was once solely a development sphere with the inclusion of objectives that seek to secure supply chains, end poaching and protect infrastructure. This shift reflects lessons learned from 15 years of implementing the MDGs and, even more so, broader global trends to integrate security and development initiatives.
These are some of the views and reports relevant to our readers that caught our attention this week.
When one thinks of corruption in the private-sector, grand scenes of executives paying bribes, bidders lying to win contracts, and senior accountants setting up secret bank accounts are likely to come to mind. In reality, though, the most common form of corruption is small-scale bribery involving people at every step of a company ladder.
Small-scale bribery can take many forms, including non-disclosure of conflicts of interest, setting up deals that benefit particular people, or paying a little extra money to speed up a normally slow process. You might not think the everyday payments people make to building inspectors, customs officials, their friends across the street, or to themselves matter, but they can create a culture of corruption and set an expectation for future payments.
This was one of the main points of a panel discussion, “The Role of Integrity Compliance and Collective Action in Making the Private Sector a Partner in the Fight Against Corruption” at the International Corruption Hunters Alliance conference held at The World Bank Group December 8-10, 2014. The panelists were Dr. Andreas Pohlmann, Billy Jacobson, and Cecilia Müller Torbrand. Galina Mikhlin-Oliver of the Integrity Vice Presidency of The World Bank was the moderator.
“Voice of Corruption Hunters in Social Media”, a panel discussion at the International Corruption Hunters Alliance (ICHA) Conference hosted by The World Bank Group, provided a nice summary of the importance of social media for communicating on anti-corruption. Jeremy Hillman, Christine Montgomery, Jessica Tillipman, Matthew Stephenson, and Julie Dimauro filled out the panel and provided an interesting break-down of the role of social media and some stories to back up their claims.
Social media, in field of the anti-corruption, serves two distinct purposes according to the panel:
- Analysis, commentary and advocacy
- Investigation and crowd-sourcing
Shehla Masood was a 38-year-old businesswoman living in the central Indian city of Bhopal. She was shot and killed near her home on Aug. 16, 2011, after availing herself of India’s Right to Information Act in order to expose local corruption.
Masood was one of several whistleblowers killed or attacked in India before the passing of the country’s whistleblower protection bill. Her story demonstrates the considerable threat of retaliation for whistleblowing.
When faced with corruption, only few of us take the courage to speak up. Reporting questionable business practices or abuses of power without protection is simply too risky for many. However, whistleblowing plays a critical role in fighting corruption.
So, how do we encourage those who witness corruptive practices to come forward? And, how do we provide adequate protection for whistleblowers? On International Anti-Corruption Day (December 9), members of the International Corruption Hunters Alliance gathered at the World Bank to discuss these questions.
People, Spaces, Deliberation bloggers present exceptional campaign art from all over the world. These examples are meant to inspire.
Prince William of the United Kingdom gave a speech at the World Bank's International Corruption Hunters Alliance Conference on Monday in which he announced the establishment of a royal task force to work with the transportation industry to examine its part in illegal wildlife trade.
The task force is a part of the royal conservation organization, United for Wildlife, and "will call on companies to implement a 'zero tolerance' policy towards the trade," the Prince said. He went on to say, "Criminals are able to exploit weak and corrupt standards, so we must raise those standards, collectively."
The prince also linked wildlife poaching to terrorism and organized crime: “Criminal gangs turn vast profits from the illegal killing or capture of wildlife; armed groups and terrorists swap poached ivory for guns; and middle-men oil the wheels of the trade in return for reward.”
The speech was delivered one day before International Anti-Corruption Day, which is observed annually on December 9. This year’s theme, “Break the Corruption Chain”, urges people to avoid taking part in everyday acts of corruption that undermine education, health, justice, democracy and sustainable development in communities around the world.
In accordance with the Prince’s speech, the United Nations Office on Drugs and Crime previously published a video calling for an end to illegal trade in wildlife products.
At times, I ask my friends in Nepal, why they would not launch a business, especially when they have funds. A common obstacle for everyone is that they say you have to bribe government officials to even open a business.
Turns out, this isn’t unique to Nepal. According to Drivers of Corruption, a report recently published by the World Bank,
. These charts are based on surveys of more than 13,000 firms in 135 countries, by World Bank Enterprise Surveys.
Check out these charts and tell us if you are surprised.
Whenever aid and development money is involved, one question consistently emerges: How do you make sure it does not fall on the wrong hands, and be victims of fraud and corruption? This is a question that the World Bank country team in Vietnam and elsewhere has been grappling with. How do we ensure that financing for World Bank projects actually goes to its intended purposes and supports the ultimate goals of eliminating extreme poverty and boosting shared prosperity?
World Bank country staff in Vietnam realized that previous responses to fraud and corruption have focused too narrowly on individual projects. What are the factors that cause and perpetuate fraud and corruption in the first place? They needed to sufficiently address the root causes of the problem, and not just the symptoms. Despite greater awareness and more open debate about corruption in Vietnamese society, there's no evidence that allegations of fraud and corruption have decreased in the last several years.
To nip the canker in the bud, the Vietnam country team is developing a Strategic Action Plan to Address Fraud and Corruption Risks. The plan identifies broad areas of fraud and corruption concerns, categorizes them, and proposes measures and activities for mitigation. Teams across different World Bank units called “Global Practices” have come together to mainstream and implement the plan into core operations.
In our earlier blogs on corruption we have looked at the causes and consequences of corruption within the process of economic development. In our last blog, Six Strategies to Fight Corruption, we addressed the question of what can be done about it, and discussed the role of economic policies in developing the right sorts of incentives and institutions to reduce its incidence. This blog will provide some thoughts on the moral dimensions of corruption.
China has a long tradition of burying the dead and building tombs to honor them. This ancient practice, however, has recently been butting heads with modernity as the Chinese government now needs to conserve limited land for farming and development to support its people. In an effort to use land more effectively, the government launched a campaign to encourage cremation instead of burial, and authorities demanded that a minimum number of corpses be cremated each year, based on the total population of the previous year.
The campaign, however, led to unexpected results. At the start of November, two officials in China’s Guangdong province were arrested for allegedly buying corpses in order to meet the strict cremation quotas. Police from Beiliu City in Guangxi Province began investigating the theft of bodies in the region during the summer and apprehended a grave robber named Zhong in July. Zhong admitted to stealing more than 20 bodies from the graveyards of local villages in Guangxi at night. He then transported the bodies to Guangdong province to the east, where he sold them to two local officials. These two officials, He and Dong, were formally in charge of funeral management reform in the province and were arrested for purchasing the corpses with the intent of delivering them to a funeral parlor for cremation on the official registry.
Compare this to public school teachers in the United States who cheated on standardized test scores by illegally viewing tests ahead of the test date and changing their students’ answers to meet high yearly targets for student progression.
Public procurement is not among the most popular topics in development circles. However, consider just these three ways in which procurement is probably one of the most indispensable elements that make up a truly capable state:
First, without effective procurement, hospitals wait for drugs, teachers for textbooks, and cities for roads. Whenever a news item surfaces about drugs shortages in hospitals, schools without textbooks or failing road networks, the reader may be looking at a procurement problem. Without efficient procurement, money gets wasted on a very large scale. Many developing countries channel significant proportions of their budgets through the procurement system – even marginal savings can add up very fast. Third, public procurement is a part of the government that citizens see every day. Lack of transparency and corruption in procurement directly affects citizens, and the losses to corruption are estimated in the billions of dollars every year. Corruption in procurement is a big problem that affects rich countries as well.