DEVELOPMENT: UNDP Helps Fight Corruption in Third World

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Sep 18 1998 (IPS) - The U.N. Development Programme (UNDP) today is assisting some 25 countries – mostly in the developing world – to fight bribery, corruption and money- laundering.

The broad range of anti-corruption initiatives include strengthening accountability and transparency in governance, improving financial management systems and helping formulate new national legislation to eliminate kickbacks and money-laundering.

“UNDP is committed to helping developing nations put a stop to corruption,” says UNDP’s Director of Public Affairs, Djibril Diallo. The anti-corruption drive is now operating ion such countries as Benin, Bolivia, Morocco, Tanzania, Pakistan, Romania, the Philippines, Georgia, Mongolia and Guyana.

Although there are no precise estimates, Diallo says that corruption is costing the developing world billions of dollars each year, diverting scarce resources and dimishing prospects for development in some of the world’s poorer nations.

A new study titled “Corruption and Integrity Improvement Initiatives in Developing Countries,” jointly prepared by UNDP and the Organisation for Economic Cooperation and Development (OECD), says corruption tightens the shackles of poverty on countries that can least afford it. It affects societies that need every single dollar to pay for important social and economic programmes.

The 174-page study, released Thursday, draws from case studies presented at a recent UNDP/OECD workshop on corruption and takes a close look at global and national strategies that can be used to fight corruption.

Shabbir Cheema, director of UNDP’s Management Development and Governance Division, told reporters that a few years ago, it was not even possible to mention the word, let alone raise the issue of corruption in global development policy agenda. “For a long time, it has been referred to in international development circles as the ‘C-word’,” he said.

“We have come a long way from that time when corruption was viewed as a silent scourge that cannot be stopped. All over the world, people are demanding the return of trust, accountability and integrity to public office,” he said.

The Foreign Corrupt Practices Act, adopted by the U.S. in 1977, makes it a crime for an individual or an American company to bribe foreign officials in order to obtain business.

Washington, however, has complained that many European countries have permitted companies to claim bribes as tax deductions giving their businesses an unfair advantage over American corporations. In November last year, the OECD adopted a Convention on Bribery in International Transactions, which is currently in the process of being ratified before becoming law.

Michael Johnston, a U.S. Professor of Political Science at Colgate University said that Germany was one of the few countries that still permits bribes as tax deductions. The elimination of these tax incentives are now under consideration, he said.

The UNDP/OECD study admits that there have been enormous successes in the anti-corruption advocacy movement over the past few years. “Awareness about the corruption problem is far more widespread nowadays, as is the involvement of civil society in many places,” it noted.

The study points out that there is also an increasing willingness on the part of the international community, and also individual countries, to take action against bribery and corruption.

According to the study, there are “serious consequences of corruption”, including a loss of about 50 percent in tax and customs revenues in some developing nations. Companies need to increase prices to cover the cost of bribes they are forced to pay. A two percent bribe on a contract is said to raise costs by 15 percent for some companies.

In Pakistan, UNDP recently produced a learning guide and study course on corruption issues for U.N. and national staff in the Asia-Pacific region. In Romania, the agency and the U.N. Centre for International Crime Prevention are designing a programme to strengthen the capacity of the criminal justice system to fight corruption by training key personnel and through tough new legislation.

The report singles out Transparency International (TI), a non- governmental organisation based in Berlin, which puts out an annual list of the world’s most corrupt and least corrupt nations.

The three consistently corrupt nations in the annual rankings have been: Indonesia, Pakistan and Nigeria. Last year’s top 10 also included Russia, India, China, the Philippines, Thailand, South Korea and Malaysia.

Although the focus is on developing nations, TI has criticised industrial nations for perpetuating corruption.

Frank Vogl, Vice President of TI, says that many bribes paid in the course of international commerce originate in firms headquartered in the same industrial countries whose governments are now, more than ever, calling for new anti-corruption campaigns in developing nations.

The argument that corruption is mostly pervasive in developing nations was refuted at the U.N. Crime Congress in Cairo last year. “Corruption was not limited to Third World countries but often had its roots in the entrepreneurial practices in liberal democracies,” Antonio di Pietro, an Italian magistrate argued. “Corruption is like a coin, it has two sides: one side is the corruptor and the other the corrupted.”

Giving money as a bribe to a civil servant in a country in Africa by an entreprenuer in an advanced industrial country was the moral and ethical responsibility of liberal democracies. “How is it that advanced countries never prosecute such people?” di Pietro asked.

The United Nations last year approved a declaration urging the 185 member states to criminalise all acts of bribery in international transactions and deny tax deductibility for bribes, as currently practised in some Western nations.