Corruption: It’s not just about bribes… it also fuels illicit trade

April 03, 2020
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There is no doubt that for an everyday citizen, being solicited by a corrupt official to pay a bribe is an unpleasant experience. First, there’s the shame of engaging in an illegal activity. But for the impoverished, there’s a more tangible effect—putting money into the hands of corrupt officials deprives people of income that’s necessary for survival. A recent report by the World Bank says that “the poor pay the highest percentage of their income in bribes”. Its studies show that in Paraguay, the poor pay 12.6 percent of their income to bribes, while high-income households pay 6.4 percent. In Sierra Leone, the difference is even starker—13 percent vs. 3.8 percent, respectively.

But the idea that corruption is just about bribery is an over-simplification—and a common mistake. Corruption eats away at the very fabric of society, affecting the quality of badly needed products and services. In a corrupt environment, it’s more likely someone will get fake medicine rather than the real version. In a corrupt society, services the poor use will have been starved of cash by corrupt officials. “Every stolen dollar, euro, peso, yuan, rupee, or rouble robs the poor of an equal opportunity in life and prevents governments from investing in their human capital,” the World Bank report says.

Kristalina Georgieva, former chief executive of the World Bank and current MD of the IMF, echoes this when she says: “Corruption is a corrosive force hitting the poor and the vulnerable. Corruption stops medicine and drugs from reaching the sick, stops schools from being built, leads to roads washing away in the rain, and empties the public coffers. In the most fragile corners of the world, corruption undermines work to bring stability or prevent violence and extremism from taking root. The World Bank is so concerned about corruption that it fears it could derail its objective of ending extreme poverty by 2030.

Indeed, the effects of corruption on society are dire and wide-ranging. They include:

1. Insecurity. A threat to safety and security structures, corruption engenders distrust in leaders, public institutions, and the rule of law. A study by the European Commission established a connection between corruption and crimes like human trafficking, sexual exploitation, and illicit tobacco trade.

2. Less prosperity. This is due to an instability of economic growth, innovations, and sustainable development.

3. Less respect for rights. Weakened state institutions undermine democracy and human and civil rights.

4. Denial of basic services. Health care, education, clean water, sanitation, and housing—all these basic needs and their funds are diverted by criminals and put population’s health at high risk.

5. Less employment. Reduced employment opportunities.

6. Environmental disasters. Corruption threatens the planet’s finite resources.

With such serious effects, the question must be asked—how does corruption take root in the first place? More organizations are now making a link—both cause and effect—between corruption and organized crime. We can no longer simply think of corruption as a rogue law enforcement officer asking for 20 dollars. It’s far more systematic.

Interpol reports that the far-reaching effects of corruption can undermine political, social, and economic stability, and ultimately threaten the safety and security of society as a whole. The international law enforcement organization is convinced that “corruption creates a fertile ground for organized criminal activities, even terrorism, as criminals are aided in their illegal activities by the complicity of corrupt public officials. Economic globalization has made corruption a borderless crime.”

It is common sense to note that organised crime will thrive in societies where corruption is more embedded, as the rule of law will be enforced less. However, it is clear also that organised crime itself feeds the rise of corruption in society. The UN agrees that organized criminals use corruption to grease the wheels of their operations. In a report dating as far back as 2014, its Office on Drugs and Crime said that “criminal networks use bribes to facilitate the trafficking of people, drugs, endangered species, and arms.” Things are unlikely to have improved since. Even wildlife trafficking is closely linked to corruption and affects tourism revenues and governance of the country.
Anti-corruption fight needs worldwide measures

The increasing globalisation of trade means that illicit traders follow the same patterns. And corruption, as a viral and universal issue, is enabling the growth of illicit economies around the world. Even terrorist groups and transnational criminal organizations use the profits from a wide array of illicit activities to finance their operations.

This was a point made recently at an event hosted by the diplomacy centre Meridian recently in the US, attended by legislators, diplomats, academics, NGO’s and companies including PMI.* Speakers and dialogue at the event explored how we can steal a march on corruption and organized crime through good governance which helps bolster security and raise the effectiveness of development. “Systemic norms must be established in order to build international consensus on good governance”, noted a communique following the event which took place on March 5th. It also raised the point that simply improving the provision of basic services and opportunities for citizens helps too. Therefore, global solutions need to be designed, as corruption has become a global problem, including facilitating terrorism and other criminal activities.

Joint efforts by public and private sectors as well as civil society to reduce the demand of corruption will ultimately help stem the growth of rising illicit economies. It makes sense, then, that global membership organizations are taking the lead in this fight.

The World Bank has determined “10 ways to fight corruption”. They are all things that have been supported by many voices on Stop Illegal.…

1. Understand the different types of corruption, each has different solutions
2. Allow citizens to participate in solutions
3. Bring together formal and informal processes to change behaviour.
4. Use the power of technology
5. Invest in institutions and policy – imported models often do not work.
6. Get incentives right
7. Sanctions matter
8. Act globally and locally
9. Build capacity for those countries who need it most
10. Learn by doing

Moreover, the UN Convention Against Corruption, adopted in 2003 and ratified by 186 parties, aims to prevent corruption, money laundering and to strengthen the international community around law enforcement and cooperation. Chapter II of the Convention directly addresses several “preventive measures” that parties can apply worldwide to eradicate this ever-growing problem. These measures include, among others, the creation of anti-corruption bodies; the strengthening of national systems “for the recruitment, hiring, retention, promotion and retirement of civil servants”; and promoting the active participation of society in the preventive plans against corruption, including awareness-raising activities.
Various other international organizations, such as the OECD, are also addressing this global problem, and have dedicated efforts to prevent corruption: The Convention Combating Bribery of Foreign Public Official, adopted in 1997, underlined the shared responsibility by all countries to combat this problem, “welcoming the efforts of companies, business organizations and trade unions as well as other non-governmental organizations” in the fight against this scourge.

The Inter-American Convention Against Corruption has also considered the issue as global and a huge responsibility for every country, promoting and strengthening development and international cooperation on this urgent threat. The new commitments made in Copenhagen in 2018 by the World Bank have also allowed for some progress in the fight against corruption.

As we can see, corruption is a global issue, constituting a major threat to security. It has links with transnational organized crime, and the tools set up to fight corruption can also help to reinforce regulations and conventions on illicit trade as well as prevent terrorism and criminal activities.

*PMI, through its global initiative PMI IMPACT, partnered with the "Meridian International Center", a U.S. nonprofitable organization, to support this event to raise awareness on the tribulations of illicit economies.


Written by STOP: ILLEGAL

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