This paper explores the scale and composition of illicit financial flows from the 48 LDCs.
Helen Clark: Remarks on corruption at the ECOSOC 2012 High Level Segment
Interactive Dialogue /Panel on “Creating inclusive and cohesive societies: a multidisciplinary approach to combating corruption for development,” New York
I am pleased to be a part of this Interactive Dialogue on creating inclusive and cohesive societies through multidisciplinary approaches to combating corruption for development.
This discussion at ECOSOC is an acknowledgement of the importance of anti-corruption efforts for achieving the MDGs, fighting poverty, and advancing sustainable development.
It is also an opportunity to highlight the progress being made on fighting corruption. Growing numbers of governments are adopting tougher laws, establishing specific units to fight corruption, and ratifying the 2005 UN Convention against Corruption. The impact of tax havens and illicit transfers on development is also receiving growing attention. This is in part due to the on-going efforts of the high-level panel established by the African Union, the African Development Bank, and the UN Economic Commission for Africa, as well as the work of UNDP, and other bi-lateral partners.
Evidence of the adverse impact of corruption on development which has been compiled in recent years has also helped to give prominence to the need to tackle it.
The outcome document of the Rio+20 UN Conference on Sustainable Development adopted by member states two weeks ago acknowledges that “national and international corruption and illicit financial flows inhibit effective resource mobilisation and divert resources from development”, and commits member states “to combat corruption in all its manifestations”. It recognizes “that this requires strong institutions at all levels”.
As anticipated by the title of this panel discussion, fighting corruption is not something any one unit, initiative, or organization can do in isolation. A whole of government and whole of society approach is needed. UNDP is committed to supporting countries to tackle corruption effectively.
Corruption: A barrier to sustainable development
UNDP’s work in this area derives from our mandate to support countries to overcome obstacles to development, including by building capacity for effective and honest governance.
We see the impact of corruption as greater than just the diversion of resources – significant as this is. Corruption is also corrosive of societies and contributes to a justified lack of trust and confidence in governance. The worst consequences of corruption are born by the poor and vulnerable groups. Bribes, for example, can make basic services available only to those able to pay. The 2008 Global Corruption Report found that globally corruption raises the average price a household pays for water by as much as thirty per cent.
As the poor are more reliant on public services, they are disproportionately harmed by what may be, in financial terms, small-time corruption. UNDP is supporting 16 countries to prevent such abuses in their health, education, and water sectors.
Research suggests that poor women are often the worst affected by corruption. They are less likely to have access to education and control over productive resources, such as land or credit. UNDP is working in a number of countries to strengthen the ability of local women’s organisations to combat corruption.
The poor also have the most to lose from the rapid degradation of natural resources which often results from circumventing laws & regulations. Illegal logging to which corrupt officials turn a blind eye, for example, can threaten the ecosystems on which poor people depend for their livelihoods and lead to revenue losses for governments too. UNDP, through its work in support of REDD +, is helping to reduce the risk of corruption in forest management.
UNDP: An integrated approach to combating corruption
UNDP now has some two decades of experience in supporting countries to fight corruption. We have learned that integrated approaches encompassing capacity development, governance reforms, targeted anti-corruption measures, more transparency, and greater civic participation work well.
Anti-corruption measures also need to be integrated into development planning processes and sectoral interventions.We tailor our anti-corruption work to the context of individual countries – there is no “one size fits all approach”. Our work on governance around the world aims to strengthen the national institutions and processes needed to build trust, improve responsiveness and accountability, and mobilise resources for development.
The UN Convention against Corruption has raised the visibility of corruption as a constraint on development and provided a framework for tackling it. To support countries with monitoring and implementation of the convention, UNDP and UNODC have strengthened their partnership, working together to improve the coherence and quality of the UN’s technical assistance.
UNDP works with UNODC, for example, to make the Convention’s national review process, not just an end in itself, but, also an opportunity to engage stakeholders and citizens in meaningful dialogue on the reforms and policies needed. UNDP also works to build the capacity of anti-corruption institutions which can develop and support the policies and legislation needed to align national processes with the tenets laid out in the convention.
We have complementary roles: UNODC focuses on inter-governmental processes and enforcement; while UNDP focuses on prevention through development. By supporting efforts to enhance transparency and increase citizen participation in local service delivery UNDP helps countries to make corruption more difficult and therefore less likely. This was the result of Peru’s initiative, for example, to engage associations of water users in the operation and maintenance of large-scale irrigation systems. With users engaged, less bribery was reported and services were improved.
UNDP also supports dialogue and exchange across the south on what works to fight corruption. Last year, for example, we brought together high-level representatives from twenty countries in the Asia Pacific to exchange experiences preventing corruption, including through the use of information and communication technologies. Partly as a result of this meeting, India’s “ipaidabribe.com” anti-corruption initiative is now likely to be replicated in Bangladesh, Sri Lanka, and Thailand. The initiative enables citizens to report bribery attempts anonymously online, empowering those working against corruption.
A number of the bottlenecks to MDG progress relate to the effectiveness and integrity of public administrations, UNDP is able to assist countries to weave anti-corruption measures into their action plans for MDG acceleration.
In follow up to the Fourth LDC Conference, UNDP is applying its anti-corruption know-how and experience in nine LDCs, helping to develop the national capacities needed to manage public resources better, including through the adoption of anti-corruption measures, and to move forward in the LDC graduation process.
At the Fourth LDC Conference, last year in Istanbul, I released a UNDP commissioned discussion paper entitled “Illicit Financial Flows from the Least Developed Countries: 1990-2008”. Our paper suggests that illicit financial flows from LDCs alone increased from around $10 billion in 1990 to over $26 billion in 2008.
This trend, and its detrimental impact on development, extends beyond LDCs. According to Global Financial Integrity, every year the developing world could be losing as much as US$1 trillion in illicit financial flows. Such sums applied to development would make a significant impact. These illicit flows undermine the rule of law, stifle trade, and weaken economies. They are facilitated by numerous tax havens and secretive jurisdictions. A clamp down on those involved in these practices is due.
I look forward to hearing from others on the panel and in the audience about new ideas, methods, and experiences on advancing multi-disciplinary approach to fighting corruption for development.
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