G20: Time for an anti-corruption plan with sharp teeth

Stopping corruption and promoting economic growth go hand in hand. That’s the message Transparency International wants the G20 to take on board ahead of the summit in Brisbane later this year and why we are pressing hard for urgent action now on anti-corruption.

It is six years since the heads of the leading and emerging economies first convened to discuss the state of the global financial system. The G20 introduced an anti-corruption action plan but it needs to be toughened up, re-focused and implemented.

That will be our message next week when civil society groups meet to discuss how they can impact the G20 agenda. In her keynote speech at the Civil 20 (C20) Summit, Transparency International Chair Huguette Labelle will press the G20 for more action on the Anti-Corruption Action Plan because corruption hurts ordinary people and stifles economic growth.

What we want done

Australia, this year’s hosts, has said generating economic growth and ensuring stability are the two core themes of their presidency. This can’t be done if corruption is rife. The loopholes in the financial system that allow the corrupt to move stolen assets with impunity have to be closed. So, with this in mind, Transparency International is calling on G20 leaders to:

• Adopt and implement a new, focused and time-bound successor to the current Anti-Corruption Action Plan 2013-2014
• Close loopholes in the international financial system to make it harder for corrupt individuals to hide their identity and shift their stolen assets through anonymous companies
• Ensure that corrupt public officials cannot travel with impunity into other G20 countries to spend stolen public money on luxury lifestyles
• Work towards a new global transparency standard requiring public, accountable company reporting, with emphasis on industries vulnerable to corruption such as within the natural resource sector
• Adopt legislation to protect whistleblowers who report corrupt activities, often at grave personal and professional risk
• Ensure more robust systems are in place to return stolen assets back to the countries where they came from.

In February, G20 Finance Ministers agreed to increase collective growth above current trajectories by at least 2 percentage points. Transparency International underlined in a letter to the Finance Ministers that there is plenty of evidence of the negative impact of different forms of corruption on economic growth, investment and entrepreneurialism.

Cost of corruption

The scale of corruption is clear. The cost of bribery alone amounts to more than US$1 trillion each year according to the World Bank. This figure does not include embezzlement or theft of public assets and yet still amounts to almost 1.4 per cent of global GDP.

The impact of corruption on a global level is also evident. A recent Transparency International survey found that an average of 27 per cent of the respondents within 15 G20 countries believed they had lost business due to corrupt practices. In addition, corruption leads to reluctance to invest; a PriceWaterhouseCoopers survey of more than 390 senior business executives found that almost 45 per cent said risks posed by corruption led them to not enter a market or pursue a business opportunity.

Above all, the ultimate impact of corruption is on citizens. Beyond the sheer scale of bribery, there is prevalence. Last year Transparency International found that one in four people surveyed in our global opinion poll had paid a bribe to access a service. Public procurement projects scarred by corruption generate bridges not built, shoddy hospital and school buildings, wasted resources and ultimately a higher burden to bear for the ordinary citizen.

It is for this reason that the G20 has a responsibility and an obligation to clean up the global financial system and restore trust in citizens around the world.