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The World Region

Settling with Justice

Jean Pesme's picture

Settlements in cases of foreign bribery cases are big news and growing.  More and more countries are allowing these procedures, and their law enforcement agencies are using them forcefully in their efforts to combat foreign bribery. The FCPA, which came into law in the US over thirty five years ago, has paved the way for many other countries to adopt similar legislations, in line with far reaching international agreements such as the OECD Anti-Bribery Convention. These are very welcome developments, which should continue unabated.

The 2003 UN Convention Against Corruption – to which almost 170 countries have become party to - has created an environment for a radical and universal change in the international landscape of anti-bribery legislation. Actual enforcement is making a difference, as illustrated by the rapid growth in settlements by companies and individuals who have contravened the law and have to face the consequences - without going to a full trial. The figures are telling: over the past decade a total of US$ 6.9 billion has been imposed in monetary sanctions through settlements - which is clearly good news in the fight against corruption.

But in the midst of this positive development, there are a number of troubling concerns (from the perspective of the countries affected by corruption).  Research by the  UNODC/World Bank Stolen Asset Recovery Initiative in our new report ‘Left Out of the Bargain’ has revealed that those countries whose officials have been bribed are most often unaware of the settlements, and receive very little of the moneys involved. Of the US$ 6.9 billion, nearly US$ 5.8 billion came about when the countries where the settlement took place – mostly major financial centers - were different from those of the allegedly bribed foreign public official.

StAR’s analysis of 395 cases reveals that only about US$197 million, or 3%, was returned to the countries whose officials allegedly received bribes.
 

To Boost Job Creation, Fix the Skewed Financial Sector

Christopher Colford's picture


Will any government be brave enough to let a big bank fail? (Credit: Ian Kennedy, Flickr Creative Commons)

Five frightening years after the meltdown of the global financial system – with the world’s advanced economies stuck in a painful slump – policymakers are still struggling to reinvigorate job growth. If the unemployed were awaiting some tangible initiative from this summer’s G8 summit, they were surely disappointed: Last week’s G8 summit communiqué offered only boilerplate assertions that “decisive action is needed to nurture a sustainable recovery and restore the resilience of the global economy.”

The financial fiasco of 2008 left human wreckage in its wake. An additional 120 million people worldwide were plunged into poverty at the nadir of the crisis, wiping out years of development progress. According to the World Bank's most recent World Development Report, there are now about 200 million unemployed worldwide; 1.5 billion only marginally employed in tenuous jobs; and 2 billion dropouts from the workforce.  

Why are we trapped in financial crises?

Claire McGuire's picture


The financial crises has entered a new, difficult phase (Credit:©iStockphoto.com/Photomorphic)

The Thirteenth Annual Financial Sector World Bank/Federal Reserve/International Monetary Fund Seminar on Policy Challenges for the Financial Sector was held on June 5 to 7th, attracting more than 90 participants from over 60 countries. There were many distinguished speakers, including World Bank President Jim Yong Kim, IMF Managing Director Christine Lagarde and Federal Reserve Chairman Ben Bernanke.  One of the highlights was a provocative lunchtime address on The Contradictions of System Stability: One Asian View by Andrew Sheng, the President of the Fung Global Institute.

Why do we feel that poor people need financial education?

Ignacio Mas's picture


Does everyone need financial education? (Credit: Bill Ruhsam, Flickr)

I am not at all sure I could live on a few dollars a day. Why would I think that those who do need financial education? Yet in any meeting or conference on financial inclusion, someone will clamor for financially educating the poor and all will readily nod. Please allow me to side-step the substance of the issue, for I have no new empirical evidence to bring to the table either way. What I find curious is why the idea that poor people are lacking essential financial literacy skills is so prevalent among the non-poor. Let me propose five reasons.

1. The poor mis-spend

Who hasn’t wondered why it is you can find Coke bottles in the poorest communities in developing countries? Who hasn’t had a pang of doubt upon seeing reams of shiny bags of candy hanging from the shabbiest stalls in the remotest villages? And you’re thinking: my parents didn’t buy me this stuff! Well, it might be because your parents had plenty of other ways to reward you and each other. Think toys, ski trips, family outing to a restaurant, gifts, etc. Next to these things, splurging one day on some candy and a Coke seems downright meaningless. But for many it might be the easiest way to create magical family moments, to transcend a dreary daily routine. If it helps keep the family going and united, it might be a bargain. We musn’t pass judgment on how the poor spend their money, for we cannot imagine the job that they are ‘hiring’ those seemingly superfluous products to fulfill.

Can Islamic Finance spur Inclusive Growth & Sustainable Development?

Abayomi Alawode's picture


Islamic finance can connect millions around the globe to the economy (Credit: The Reboot, Flickr)

In the wake of the global financial and economic crisis, the need for a new development model which is more sustainable and also fosters inclusive growth has become more apparent. Could Islamic finance be the answer? Islamic finance promotes risk-sharing, connection to the real economy and emphasizes financial inclusion and social welfare.  Can these dimensions contribute to inclusive growth and sustainable development?

Islamic finance is based on two intrinsic features: risk-sharing and the link between financial transactions and the real economy. Because all financial contracts are backed by real sector assets and risk-sharing among partners, including financing institutions, Islamic financial instruments have relatively more stability than conventional instruments and tend to be more flexible against unanticipated shocks. This critical link brings prudence to the system, promotes equity relative to debt, broadens financial participation, and minimizes overall vulnerability.

G20 Summit’s Commitment to Action Will Help Promote Financial Inclusion

Amid the chronic chasm between the world’s wealthy and its excluded, almost half of the adult population worldwide – an estimated 2.5 billion people – lack access to basic financial services. The global economic crisis has intensified the plight of the financially excluded, preventing even more of the world’s poor from gaining a foothold on an important ladder out of poverty.

 

Massive Bankruptcy of Interconnected Political Powers...Europe? Think again...

Yesterday, a democratic jurisdiction that is part of a much larger and deeply interconnected political federation declared bankruptcy. This bankruptcy promises to have a significant disruptive effect across the larger federation. Think I’m talking about Europe? Think again.