Friday, June 25, 2010

Don't forget the corruption enablers

The Boston Globe is carrying a useful opinion piece on corruption:

"Everyone’s against corruption, or so they say. But virtually every country in the world is awash in cross-border flows of corrupt, criminal, and tax-evading money. To Western eyes, the Third World is the locus of this shady behavior. Yet the rich and powerful countries, the winners that write the rules for the global financial system, are corruption’s pinstriped enablers."

The TJN corruption analysis, which we articulated in an article jointly co-authored with Raymond Baker of Global Financial Integrity, is clearly catching on. (And some of the terminology: pinstriped enablers is classic TJN-speak) About time too.

Meanwhile, the Guardian is carrying another article from Anthea Lawson of Global Witness, who is arguing along very similar lines:

"In 2008, Africa received $44bn (£29.5bn) in international aid. In the same year, the continent exported oil and minerals worth $393bn. Many of the poorest countries could lift their populations out of poverty with their natural resource revenues. One of the biggest things stopping them is the willingness of the international financial system to accept looted funds. The flow of corrupt funds into the banks of the developed world is a disaster for the world's poor. Some estimates put this transfer of wealth as high as $40bn a year."

Bear in mind that this $40 billion estimate is just one very small part of the overall panorama of illicit flows - in his book Capitalism's Achilles Heel, Raymond Baker estimated that the illicit flows stemming from corruption were merely three percent of the overall picture.

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