According to World Bank estimates more than $1 trillion are paid in bribes each year out of an annual world economy of $30 trillion. And, it says, the impact is particularly severe on foreign investment so much so that in fact corruption serves, essentially, as a 20 per cent tax. It is staggering to come to the realization that every time grant aid or loans for development are announced, somewhere along the way to the infrastructure being built, or the project being implemented as much as 20 per cent is skimmed off and passed ‘under the table’ to public officials who have a say in who gets what contract.
And while the public official expands his house or builds a new one; buys a new model car or SUV; sends his family to Disney World or puts his children through university in a first world country, what is left is inadequate to build the bridge/road/school according to the international specifications demanded because of course, the businessman/contractor is not about to operate at a loss. He, too, must be in a position to buy his own expensive toys and pay for his family holidays and children’s education.
In reality, the cost of the bribe is borne by poor tax-paying citizens whose earnings must not only pay back the loan, but be put towards fixing the ‘new’ infrastructure when it goes kaput within a short space of time. The poor tax-paying citizens face double jeopardy when they must also pay after the faulty infrastructure causes damage to their homes, cars or person. What is unfortunate is that they rarely see the entire picture and therefore do not grasp the extent to which their tax dollar is being squandered.
At a conference jointly organized by the French presidency of the G20 and the Organisation for Economic Co-operation and Development (OECD) and supported by the United Nations Office on Drugs and Crime at the OECD Conference Centre in Paris, and which ends today, the OECD’s 34 member countries are addressing, among other things, the challenge of anti-corruption compliance; how to fight corruption in public procurement; sector-specific anti-corruption initiatives and recognising commercial practices most exposed to corruption. The conference, which targets the international private sector aims to achieve public-private co-operation in implementing the G20 Anti-Corruption Action Plan and will look at next steps for business and the G20. The OECD’s membership comprises the first world – the world’s major donors – and emerging economies. The organization views corruption as “a global problem that knows no borders… [which] demands a truly global response… that knows no limits on collaboration.” Its anti-bribery convention, launched since 1999, makes it illegal for citizens of the 38 signatory countries to bribe public officials in other countries while conducting business deals. Up to the end of last year, 199 individuals and 91 entities had been sanctioned under criminal proceedings for “foreign bribery”; at least 54 of the sanctioned individuals were sentenced to prison; a record amount of 1.24 billion euros was imposed in combined fines on a single company; approximately 260 investigations are ongoing and criminal charges have been laid against over 120 individuals and 20 entities. A further initiative launched last year invited the participation of any international organisation, NGO, corporate network or government with similar anti-corruption agendas.
However, in order to really put a serious dent in corruption, the OECD as an organization needs to be better empowered by its member states to enforce transparency, particularly in developing countries where democracy is in its infancy. While the organization may only be in a position at the moment to sanction member countries’ citizens and signatories to its convention, it could, for example, tie public reporting to loans and grants so that as a first step, the secrecy that allows for bribery and corruption extortion is removed. The more people know about this crime, the harder it will be for it to be perpetrated, particularly if there is more awareness about who really pays the bribes and who benefits; whistle-blowing, too, is bound to increase, which will also aid in killing the roots of corruption.