WASHINGTON: The International Monetary Fund launched a new policy on Sunday for fighting corruption as its Managing Director Christine Lagarde warned that funds stolen from developing countries were often stashed away in major world capitals.
A key element of the new policy is to prevent the private sector from offering bribes and from facilitating concealment of corruption proceeds.
“There is evidence that corruption can have a pernicious effect on a country’s ability to achieve sustainable, inclusive economic growth,” warns the policy paper.
“To truly fight corruption, we need to address the facilitation of corrupt practices by private actors,” said Lagarde. “To do this, we will be encouraging our member countries to volunteer to have their legal and institutional frameworks assessed by the Fund.”
In a statement issued by her office, she reminded all IMF member states to ensure that “they criminalise and prosecute foreign bribery and have mechanism to stop the laundering and concealment of dirty money.”
Lagarde also underlined the need for major world powers to play their role in curbing corruption, reminding them that “funds received through corruption are often funds concealed outside the country, often in the financial sectors of major capitals.”
The Guardian newspaper reported on Sunday that the IMF would investigate whether Britain and other rich countries were taking tough action against bribery and money laundering.
The investigation will also focus on Britain’s financial district, the City of London, which has “won the unenviable reputation of being the global centre for money laundering”.
Recent reports in the British media accused several British-registered companies and banks of moving at least £20 billion of corruption money from Russia alone.
In Washington, IMF officials said at a seminar on Sunday that on April 6 the Fund’s Executive Board adopted a new policy framework for fighting corruption, which consists of four elements.
The first element is to assess the nature and severity of governance vulnerabilities, including corruption. “Given its particularly pernicious impact on a member’s ability to achieve sustainable inclusive growth, the assessment will also examine the severity of corruption,” said an IMF policy paper released on Sunday.
The second element will guide the Fund’s assessment of the macro-economic implications of governance vulnerabilities by taking into account the applicable standards for surveillance and the use of Fund resources.
The third element provides a framework for policy advice and capacity development support to members where Fund engagement is warranted.
And, the fourth element focuses on measures designed to prevent private actors from offering bribes or providing services that facilitate concealment of corruption proceeds.
“We know that corruption hurts the poor, hinders economic opportunity and social mobility, undermines trust in institutions and causes social cohesion to unravel,” Lagarde said.
Published in Dawn, April 23rd, 2018
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