Speaking today ahead of the World Bank-IMF Spring Meetings, Bank President Robert Zoellick said the crisis engulfing the Middle East and North Africa shows that greater citizen participation and better governance are crucial for economic development. The World Bank will do more to emphasize both, he said.
Recently, many in the community concerned about international corruption have begun to discuss the need to hold individuals responsible criminally for their actions. While people have long discussed the failure to hold high-profile bribe recipients responsible, now the discussion has mutated to the bribe payer side. Lower-level targets are certainly more easily prosecuted than the rich and powerful. After all, corruption, like most crimes, is committed by people, not by companies, machines or cultures. Some countries, most notable the U.S., have brought an increasing number of cases against individuals directly involved in paying or authorizing bribes.
It is a fact that many of the countries which suffer the most from corruption are the countries which have the fewest resources to combat the problem. Poor countries may be faced with a dilemma of using resources to prosecute the corruption which degrades the quality and quantity of public goods that reach their citizens, or using resources to provide those basic goods, such as food aid and roads.
At the same time, larger bribes are not infrequently paid by outsiders, such as foreign corporations. Casual observation shows that funds must be coming from outside some of the poorest countries. In short, the bribe money is flowing from the developed world into the developing world.
I would like to follow up on Paul’s interesting comments on information sharing and the need in particular for timeliness. He raises a number of issues on when to share information and this is where I would like to come in. My background relies on information sharing across disciplines, be they units in the Bank or wider afield to other agencies such as Multi Lateral Development Banks (MDB) with their own integrity/investigations function or to law enforcement. And herein lies the difference between information managed by law enforcement when compared to that of the development community. In our search for timeliness – often a crucial issue for law enforcement it is not so for the development community, and in some ways this is essential as it allows us to first evaluate the reliability of the source of the information and then question the validity of the information. One may ask why we should do this, and the simple answer is – we must be able to satisfy ourselves that we have undertaken our own due diligence and are confident that the information we are providing will add value to the enforcement entity with whom we share the information. For instance we may find that after questioning the source of the data we ascertain that the information is not known directly to the source it is in fact a regurgitation of information relayed to him/her by someone else – and therefore while our source may be good the validity of our information could be questioned.
Courts must expeditiously, but fairly, adjudicate corruption cases, and the penalties imposed on those convicted must be sufficient to dissuade others from similar acts. To ensure that anti-corruption laws are indeed being effectively enforced, governments need to monitor the enforcement process.
Doing so can provide performance measures to inform and guide policy design and implementation. These performance measures also serve as indicators of corruption. In the short run, policy makers may not be able to do much to change these indicators, but measures, focused on performance, can provide a country something more concrete to act upon, helping policy-makers to prioritize.
For example, if the number of completed corruption investigations in a particular country is low because of difficulty in obtaining evidence, it can identify changes in policy and procedures which expand or strengthen investigators powers and tools such as providing it with subpeona powers or access to financial records.
The OECD Antibribery Convention requires parties to make promising, offering, or giving a bribe to an official of another government a crime. Although 38 countries have ratified the convention, Transparency International reports that as of the end of 2009 only seven are actively enforcing this provision. Another nine are making some effort to enforce it and have taken few if any steps to enforce the convention.
In early 2009, the U.S.-based multinational Halliburton paid $579 million to the U.S. government to settle charges it had bribed Nigerian officials to win a contract. In late 2008 the German telecommunications giant Siemens paid $1.6 billion in fines, penalties and disgorgement of profits to the German and American governments for bribing officials.
I believe that timeliness is key in the sharing of information. If criminal information about suspects is not shared with those who need to know in a timely manner, this can result in crimes being committed that could have been prevented or once-in-a-lifetime investigative opportunities being lost.
In the field of fraud and corruption and in our context, the failure to share information in a timely manner can result in funds continuing to leak that could have been put to use to the benefit of society and overburdened countries and taxpayers picking up the bill for products and services that they have not received, are incomplete or are hugely overpriced.
The question I want to raise is whether and how we can share information at a sufficiently early stage.
I chaired a very lively seminar on Friday afternoon that focused on the question, “Can Africa Trade with Africa?” The answer was a resounding yes.
Today, there is strong consensus among African leaders that regional integration is indispensable to unlock economies of scale and sharpen competitiveness. And promoting intra-African trade has emerged as a top priority, in recognition that the African market of one billion consumers can be a powerful engine for growth and employment.
Yet despite the introduction of free trade areas, customs unions, and common markets within the Region, the level of intra-African trade remains among the lowest in the world -- only about 10% of African trade is within the continent, compared to about 40% in North America and about 60% in Western Europe.
Anyone who has ever been to the Central African Republic (CAR) knows that the country has huge infrastructure needs after years of internal turmoil and strife. But when you look up how much of the government’s investment budget actually was implemented and financed infrastructure development in 2009 for instance, you find a stunningly low execution rate of 5 percent.