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Friday, 10 April 2009

UN Takes Swing at Crooks Who Steal Aid for the Poor

By Tim Weiner

New York Times

Corruption among governments, politicians and businessmen endangers the world's efforts to ease poverty, according to leaders of a United Nations conference on aid and economic development that opened here today.

Untangling criminal webs that have crippled aid efforts will take years, the leaders said. One solution that has been raised at the United Nations, an international convention against corruption that would demand clean government and the return of stolen funds, seems as quixotic as a decree outlawing greed, lust and the other deadly sins.

But the first step has been taken: institutions like the United Nations and the World Bank are acknowledging that corruption is a factor and aiming to control it, said Ruth Jacoby, Sweden's ambassador to the United Nations and an author of the Monterrey Consensus, the agreement on increasing aid to poor nations that is a focus of this conference, which runs through Friday.

"A half decade ago, one didn't speak of corruption - it was considered offensive," she said.

People are talking now. They see bribery and corruption as "grave obstacles" to development, said Shamshad Ahmad, Pakistan's United Nations ambassador, also an author of the Monterrey Consensus. The United States demands that poor nations cleanse their governments as a condition for new aid promised last week by President Bush.

The problem is not simply crooked politicians, though it begins there. Bad governments tend to deepen their peoples' poverty. Poor nations lack banking and financial regulations, a working tax system or a judiciary. They cannot easily enforce the law, clean up graft or inspire confidence in investors.

For rich nations, aid has often been a political tool, supplied with a blind eye to corruption. During the cold war the United States supported rulers like Mobutu Sese Seko of Zaire, accused of stealing billions, because they were seen as bulwarks against Communism.

Today, the global political equations have changed: aid will be considered well spent if it prevents states from collapsing into "havens for terror," Mr. Bush said Thursday. He said, however, that the United States would demand that states remove "gantlets of bureaucracy and bribery" to receive American aid.

But "the biggest demand for an end to corruption," said Nitin Desai, the United Nations under secretary general for economic and social affairs, "is in the countries affected by it."

The horror stories are famous in aid circles: fortunes stolen by crooked Russian politicians and businessmen; millions sent to Bosnia that vanished; thefts and kickbacks within the Palestinian Authority. There are tales of the international airport built in the remote Kenyan hamlet that happens to be President Daniel Arap Moi's hometown, and the Mercedes fleet purchased by the leaders of Malawi.

Aid officials argue that these tales of theft are exceptions, not rules, and should not make donor nations disregard the real reductions in poverty and infant mortality, and the increases in life expectancy and literacy, that their aid has bought over the years.

"No one says we cannot have a defense budget, or spend an additional $48 billion on weapons this year, because someone bought a thousand- dollar teapot," said Mark Malloch Brown, the head of the United Nations Development Program. The United Nations is asking the world's rich nations to increase their international aid by a roughly equal sum, about $50 billion a year.

James Wolfensohn, president of the World Bank, says rich nations should attack corruption by helping poor ones train civil servants and build schools. Every nation, the United States included, has had "to struggle against extreme corruption," he said. "This battle never ends."

The battle has been joined since 1993 by Transparency International, a global anticorruption group with offices in 80 nations and leaders who are veterans of aid wars at the World Bank and the United Nations. Their work includes roughly 100 "integrity pacts," like an open bidding process on a Karachi water project that cut projected costs by tens of millions of dollars.

But the group's vice chairman, Frank Vogl, said, "There still is a taboo about discussing this problem, to some extent."

He cited the example of the arms trade. "Countries with incredibly limited resources, that can't provide medical care to their citizens, are spending huge amounts on arms," he said. "That's taboo. Nobody's going to talk about defense spending by developing countries, though there's massive corruption involved in the arms trade."

Public outrage against corruption has toppled regimes in places like the Philippines. But in the poorest nations, powerlessness prevails among the poor, making aid honestly delivered and spent all the more crucial.

Critics of World Bank lending say it too could be more transparent.

They say the bank prefers huge construction projects like dams and pipelines, easier to defraud than smaller-scale programs. Instead, they say, the bank should focus on a few grand goals, like universal access to primary education and prenatal care, while clearly favoring nations less corrupt or repressive than their neighbors.

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