- The Washington Times - Sunday, October 29, 2006

GENEVA — World Bank President Paul Wolfowitz warned parliamentarians at a global forum here this month that rampant corruption — especially in poor African nations — jeopardizes international efforts to combat poverty and disease.

“Every dollar diverted by corruption is a dollar that won’t go toward jobs, health care and other essential services for the poor. Corruption is a disease that thrives on darkness. Transparency, participation and accountability — the light that emanates from an empowered citizenry — are the strongest antidotes to corruption,” he said.

Speaking to delegates from more than 100 countries attending the 115th annual assembly of the Inter-Parliamentary Union, Mr. Wolfowitz said: “As legislators, you may be asked by your constituents why they should give money to Africa if it lines the pockets of corrupt leaders and fails to benefit the poor. You may be asked why they should continue supporting Africa after some $300 billion development aid went to the continent in the last 20 years with little results to show for it.”

But he also noted that moves against corruption were being undertaken by courageous political leaders and policy-makers in many countries, and that those leaders are encouraged by public opinion. He singled out for praise Liberia’s Ellen Johnson-Sirleaf, Africa’s first elected female president, who seeks to fight corruption and rebuild her war-ravaged country.

Mr. Wolfowitz also underlined anti-corruption efforts by Nuhu Ribadu, chairman of Nigeria’s Economic and Financial Crimes Commission, and by Nigerian Education Minister Obi Ezekwesili aimed at improving accountability.

The work by Mr. Ribadu’s agency, Mr. Wolfowitz said, “has already led to the recovery of some $5 billion in stolen assets from corrupt officials and individuals. And two of his staff have been murdered, probably because of the work they were doing.”

Supporting reform

“The people of Africa don’t want charity. What they want, and deserve, is opportunity,” said Mr. Wolfowitz, a former deputy secretary of defense for President Bush.

But change on the world’s poorest continent has to be driven by its leaders and its people, Mr. Wolfowitz stressed.

“For that reason,” he said, “the World Bank Group is committed to supporting champions of reform in both government and civil society, including legislators, courts and a free press.”

Richard Kozul-Wright, senior economist with the U.N. Conference on Trade and Development, said transparency initiatives to limit corruption are commendable. He said that corruption is clearly a problem, but that it is linked to underdevelopment. Mr. Kozul-Wright faulted the World Bank for using the issue to deflect attention from other problems, citing what he called its failed structural-adjustment and poverty-reduction policies of the past 25 years.

A recent report by the International Labor Organization (ILO) on global road transportation problems also highlighted the adverse effects of corruption in Africa and other poor regions.

In West Africa, the report said, professional drivers are vulnerable to harassment, extortion and bribery demands from customs and other officials, especially when crossing borders. The problem is endemic in countries such as Benin, Burkina Faso, Ivory Coast, Mali and Togo, the ILO said.

Because of such border transaction issues, transportation costs in many African countries “are six times higher than in Pakistan,” according to ILO estimates.

Negotiations on trade facilitation to enhance transparency and streamline customs-clearance procedures, authorities say, would help reduce corruption and losses in government revenues from duties.

However, efforts by successive U.S. administrations in the past decade, backed by the European Union, to put this issue on the global trade agenda have failed to win the support of many developing countries, which view the issue as not ripe for negotiations.

Mr. Wolfowitz said strengthening parliamentary institutions in developing countries in order to hold officials accountable “is one of the most important ways to make sure money goes where it’s supposed to go.” It is a question of not only corruption, but also likely “inefficiency or excessive bureaucracy,” he said.

In responding to questions from lawmakers from some African countries, he conceded that rich countries also bear a greater-than-acknowledged responsibility for corruption in poor nations.

“For every bribe taker, there is at least one bribe giver. All too often, those bribe givers are rich companies from rich countries,” he said.

Recent international accords such as the U.N. Convention against Corruption, Mr. Wolfowitz said, have helped usher in positive changes on this front. He added that not so long ago, companies in rich countries “got tax exemptions for the bribes they paid in the developing world.”

He told the parliamentary representatives that legislators also have a role to play in discouraging asset stripping by making it more difficult for people to hide their ill-gotten gains abroad. Effective laws against money laundering and banking secrecy should be enacted, Mr. Wolfowitz said.

Strengthening the capacity of parliaments in developing countries also can be helpful, he said, especially if parliamentarians have good trained staff and information services.

“It’s not something that you can force,” he conceded.

Long road out of poverty

Perusing global efforts in the past 25 years to raise living standards worldwide, the World Bank chief noted that a half-billion people have escaped poverty, and that 400 million are expected to do so in the next 10 years.

But Mr. Wolfowitz observed that not every region has benefited.

“One region that has been moving dangerously in the opposite direction is sub-Saharan Africa. Between 1981 and 2002, the number of people living in poverty in the sub-Saharan countries nearly doubled from more than 160 million to more than 300 million — roughly half the population of the subcontinent.

“This is why the World Bank Group has made Africa our No. 1 priority,” he added. “The needs of Africa are truly enormous.”

But aside from the problem of corruption, he said it is not a lack of potential that holds Africa back, but crumbling infrastructure that burdens entrepreneurs with higher costs, bureaucratic red tape that hinders small businesses from competing in the global economy and protected markets in rich countries that deny poor farmers access.

Mr. Wolfowitz said that more money alone will not solve these problems, but that more money is desperately needed.

For the poorest countries in Africa, a key source of development financing comes from the International Development Association (IDA), the World Bank’s concessional lending arm.

Last year, IDA support to the poorest countries reached a record $9.5 billion, with half of that going to Africa, and a record $950 million of World Bank Group income has been committed to help the poorest countries, he said.

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