This week, the world hit an agonising milestone as the one millionth COVID-19 death was recorded. But the ongoing pandemic threatens to scar our societies in other ways, too.
“Without urgent action, we risk deepening the divide – globally – between the rich and poor,” the head of International Monetary Fund (IMF), Kristalina Georgieva warned this week of the impacts of the COVID-19 pandemic.
Even before the pandemic, inequality between and within countries had been a key impediment to sustainable development and social justice.
This is certainly true for Africa, which is home to 10 of the 20 most unequal countries in the globe. Despite two decades of high economic growth, resource-rich Africa remains the second most unequal region in the world.
Consider this: three African billionaires have more wealth than the poorest 650 million people – 50 per cent of the population – across the continent.
African countries will need at least US$200 billion to cope with the socioeconomic costs of the COVID-19 pandemic, in addition to emergency health spending.
With so much at stake, international financial institutions have unleased trillions of dollars in dedicated lending to help developing countries bridge the financing gap.
This week, together with Global Witness and Human Rights Watch, we outlined three key anti-corruption measures that the IMF should take to ensure that funding reaches those most in need and the subsequent economic recovery does not contribute to even greater inequalities.
The COVID-19 pandemic has exacerbated already staggering levels of economic inequality in many countries around the world. Now there is a real risk that trillions of dollars meant to support those hardest hit by the crisis may be captured by the wealthy, increasing inequality as countries are saddled with public debt for money lost to corruption.
But besides promoting anti-corruption and good governance measures in aid-recipient countries, urgent global action is needed to tackle illicit financial flows.
Illicit financial flows drain Africa of US$50 billion annually.
Africa is the world’s second fastest-growing region, and yet 100 million more Africans live in extreme poverty today compared to the 1990s. Sub-Saharan Africa, in particular, is home to the largest share of people living in extreme poverty.
These are billions that could be used to fund initiatives and public services that improve the lives of Africans.
These are billions of illegally money acquired that is funnelled abroad using offshore financial structures – often with the help of complicit or negligent banks, lawyers, accountants and real estate agents.
Transparency International’s analysis shows that the COVID-19 pandemic risks deepening inequalities unless we strengthen the front-line defences of the global anti-money laundering system.
Recent revelations from the FinCEN Files add to the overwhelming evidence that lacklustre supervision of the banking industry – who remain a weak link in global efforts to combat the corruption, tax evasion and tax avoidance – fuel economic and social inequalities.
Over the coming months and years, international forums like the G20, IMF, Financial Action Task Force, the UN’s FACTI Panel and the General Assembly Special Session on Corruption (UNGASS 2021) will continue to talk about the importance of economic and social equality in the wake of the COVID-19 pandemic.
For those words to be meaningful, however, they must pay attention to the gears in the machinery of transnational corruption.
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