Corruption costs developing nations $20 to $40 billion each year, while emerging markets and financial centers are increasingly havens for stolen assets, a top World Bank official said Saturday.
Managing director Ngozi Okonjo-Iweala said concerted global action by both developed and developing states was needed to stem the flow of illicit funds and urged governments to ratify the United Nations Convention Against Corruption (UNCAC).
There's an estimate that $20-$40 billion a year, in terms of corruptly stolen assets, leaves developing countries to go to developed countries each year, Okonjo-Iweala, a former Nigerian finance minister, told Reuters ahead of an anti-corruption conference in the Qatari capital.
Now increasingly, we find that emerging market countries (and) financial centers are also harbors for this money.
The World Bank official said the pledge by the Group of 20 nations (G20), meeting this weekend in Scotland, to help prevent illicit outflows of capital and seek the return of stolen assets to developing countries, was a welcome first step.
Now what we need to do is move to action, she said. Developed countries that have these assets have to implement the UNCAC convention and send these assets back, and developing countries need to make the move to request the assistance from developed countries.
Adopting the UN convention would provide a framework to fight corruption, she said, and help overcome thorny legal hurdles in different jurisdictions.
So if countries really want to do it, they can because they can waive all those legal requirements, freeze the assets, seize them and send them back, she said.
Okonjo-Iweala said she hoped the UN anti-corruption convention will not be a nice plan that would gather dust but one every country needed to sign on to.
When you ratify, you have to domesticate it within your own legal environment, she said.
Among countries trying very hard to return illicit funds to developing nations were Switzerland, the United Kingdom, and the United States, she added.
The World Bank's integrity unit has prohibited some companies found to be corrupt from participating in its procurement process, which has been an effective deterrent, Okonjo-Iweala said.
(These) are companies including some significant companies from the West, also from developing countries, she added.
The World Bank estimates that in the past 15 years about $5 billion has been recovered by all jurisdictions, she said, adding this was only a drop in the bucket compared to what's going on each year.
Developing countries have to work hard to fight corruption and stop people from stealing money, she said. And the countries receiving the stolen assets have to send them back to show these people that there is no impunity.
(Editing by Andrew Roche)