Report Underpins View of Corruption as Obstacle to Development

Global partners need to collaborate to fight corruption, U.S. official says

By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- A recent report that finds strong linkages between poverty and corruption reinforces the growing evidence that corruption hampers efforts to lift people out of poverty and provide them with new economic opportunities, a U.S. State Department official says.

“Corruption clearly results in the misallocation of resources and tends to be more prevalent where systems of governance and political will to combat corruption are weak,” David Luna, director for anti-corruption and governance initiatives, said following the release of the 2006 Corruption Perceptions Index by Transparency International (TI).

Luna said November 6 that corruption helps to fuel poverty, especially when high-level public officials steal from their nations or mismanage public resources intended to finance their people’s aspirations for a better life.

In many parts of the world, kleptocrats have lined their own pockets instead of funding development such as new roads, schools and hospitals, he said.

In a broader context, grand corruption eventually may lead to economic stagnation and increase economic and social disparities, Luna said.

TI, an international nongovernmental organization dedicated to fighting corruption worldwide, found a strong correlation between corruption and poverty for those countries that are considered most impoverished.

Luna said that the TI report underscores what many in the international community have articulated for years -- that investment opportunities and economic growth do not materialize easily in places where corruption is rampant and that investors increasingly are demanding a higher assurance of market integrity to mitigate potential risks from poor governance.

The report serves as a useful reminder that corruption continues to be a challenge in many parts of the world and that international partners must work together to implement effective anti-corruption strategies and prosecute corruption to make progress, he said.

Huguette Labelle, the chair of Transparency International, which publishes the report annually, said that, despite progress in many countries in establishing anti-corruption laws and regulations, much remains to be done to reduce global poverty significantly.

“Corruption traps millions in poverty,” she said in a November 6 TI news release.

The report draws on expert and business data to rank countries according to the level of perceived corruption among public officials and politicians.

It qualifies as “serious” levels of corruption in almost three-quarters of 163 countries that have been surveyed, including all low-income nations. In nearly half, it views corruption as rampant. All so-called “failed states” are at the bottom of the ranking.

Haiti was given the lowest score, with Guinea, Iraq and Burma (listed as Myanmar in the report) ranked near the bottom. Finland, Iceland and New Zealand shared the top ranking as the least corrupt nations.

The report also concluded that despite international anti-corruption efforts, which have intensified in recent years, intermediaries such as bankers, accountants, lawyers in developed countries and offshore centers continue to assist corrupt political elites in laundering and keeping safe their illicit wealth. Their presence encourages corruption, the report said.

The report urged firms and professional associations of lawyers, accountants and bankers to hold their employees and members more accountable for corruption-related activities, promote corruption-specific codes of conduct and take other measures.

Luna said corruption effectively can be addressed first when there is a strong political will to combat it, for example, by enforcing countries’ laws criminalizing bribery and prosecuting corrupt individuals at all levels of society.

In recent years, the United States and the Group of Eight industrialized countries have been developing new ways to deny corrupt officials access to the wealth they have accumulated through corrupt activities and have been employing new ways to target their assets, Luna said. Additionally, the U.N. Convention Against Corruption will provide effective international cooperation mechanisms to detect, prosecute, and recover the proceeds of grand corruption once the convention’s implementation strategy is established, he said.  (See related article.)

A press release on the 2006 Corruption Perceptions Index is available on the Transparency International Web site.

The 2006 Corruption Perceptions Index is also available on the TI Web site.

See also "U.S. Initiative Seeks To Boost Fight Against Grand Corruption."

For more information on U.S. policy, see Bribery and Corruption.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)