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Friday, 10 April 2009

UN Countries Reveal Costs of Corruption

By Mark Stevenson

Asociated Press 

For decades, corruption was something governments denied. But with the signing of the first worldwide anti-corruption treaty, governments are talking, revealing the enormous cost of embezzlement, collusion and "accounting errors." The revelations are exactly what the U.N. Convention Against Corruption — being signed this week by leading officials from around the globe — was designed to accomplish: uncover corruption, detect illicit funds and return them to the countries from which they were stolen. "Corruption ... has ruined our schools and hospitals," Kenya Justice Minister more equal Murungi told a gathering of some 125 nations expected to sign the accord. "It has destroyed our agriculture and industries. It has 'eaten up' our roads and jobs. ... It has destroyed our society."

Consider the costs: The U.N.'s top anti-crime official, Antonio Costa, estimates that Zaire and Nigeria, two of Africa's hardest-hit states, have lost some $5 billion each in the last few years to graft, most of it spirited out of those countries. In Pakistan, an estimated 30 percent of the price of all public works projects goes to kickbacks and bribes. In Bangladesh, corruption eats up a whopping 50 percent of foreign investment. As high as that price tag stands, there are even more alarming activities: what officials call the intermingling of terrorism, money laundering and corruption. "The routes for arms trafficking and drugs are usually lubricated by corruption," Costa said. He estimated that about one-quarter of the $2 billion in annual proceeds from Afghan heroin — a trade that couldn't survive without graft — may be used to finance terrorism. U.S. Attorney General John Ashcroft, one of the first to sign the agreement, said corruption "provides sanctuary to the global forces of terror." Corruption also represents "a tax on the poor ... it steals from the needy to enrich the wealthy," Ashcroft told the convention in Merida, 620 miles east of Mexico City. That is especially true in Africa and Asia, two regions which have never signed onto such a pact before, where embezzled money is usually sent abroad to a rich banking capital.

Some of those banking centers — such as Switzerland, Luxembourg and Liechtenstein — have signaled their intentions to join the pact; others, such as the Cayman Islands, have not yet done so, according to officials. The agreement opens banks in money-havens to more scrutiny and may allow some poor countries to recover billions of looted dollars. It requires signatories to fight theft in the corporate sector, and punish domestic companies that pay bribes in other nations. The treaty also requires governments to enact laws against corruption, protect whistle-blowers and assist other countries in detecting illicit funds. All this places poor nations — who normally have to beg for years to get looted funds returned — on a closer footing with rich nations. It also marks a sea-change over the last decade in the way corruption is viewed. "Bribery ... was simply a part of human nature, a trivial issue," Ashcroft said, describing the attitudes of a decade ago. It was viewed as "a necessary oil to lubricate the wheels of business, or even promoted as a normal expense to be deducted from taxes at home."

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