Protestors dressed as businessmen "high five" on a protest site tagged the "Isle of Shady Tax Haven" in London last June, as campaigners called for a crackdown on tax havens. Photo: AFP/Justin Tallis/Getty Images.
Forget the 1 per cent. A British report last year declared that .0001 per cent of the world’s population hold $21 trillion in hidden assets: equal to the combined GDP of the U.S. and Japan, two of the world’s wealthiest countries.
Meanwhile, a recent survey of more than 110,000 people worldwide found that more than one in four had paid a bribe when dealing with public institutions and services.
If that sounds grim, Transparency International – the global organization dedicated to battling corruption – says that on its 20th anniversary, Friday, there is still much to celebrate.
Huguette Labelle, the Canadian chair of the Berlin-based group, explains that things could be worse. And in the past two decades they have been.
Q: How do you compare the current situation with 20 years ago?
A: If you go back to 1993, people were talking about corruption in the corridors, not openly. International institutions thought it would be too political to discuss. We didn’t have the conventions we now have, criminalizing bribery, or the UN conventions, and others. What we have today is tremendous awareness of corruption: how it can seed conflict, illicit trade and money laundering.
Q: So what’s changed?
A: There were very few institutions like anti-corruption commissions back then. The idea of an ombudsman wasn’t common, so people had no way to complain about abuse of power. That’s changed. Internally we now have laws and regulations.
Q: Was there a turning point?
A: We were pressing for international institutions to take corruption seriously. Then (World Bank president) James Wolfensohn made a 1996 speech on the cancer of corruption. That opened the door. Since then the bank has given itself an ombudsman and an integrity unit for investigation. It publishes what countries are finding.
Q: But there are massive problems with tax havens, as we saw in Cyprus.
A: True, but the U.S. is doing more on banks who have not been careful about depositing money. There’s an open government partnership with a large number of countries agreeing to it. The G20 adopted an anti-corruption working group. So quite a lot has happened.
Q: What were the big issues 20 years ago?
A: One was how companies from industrial countries were bribing their way into developing countries. Many people saw themselves losing out because of bribes and extortion. The end result was that money was taken out of various countries, stolen. Meanwhile people were living in abject poverty. Unless that bubble burst we couldn’t deal with reducing poverty.
Q: Today’s problems are still huge. Can they be solved?
A: There are laws to facilitate seizing of assets if they are stolen. But when money is seized it shouldn’t stay in those banks so they continue to make money. It should be put in trust until an investigation is completed, maybe in an annex to World Bank. We have to close loopholes with strong legislation, and the public and private sectors have to go way beyond compliance.
But to change the culture of corruption it’s important to start early, with children and youth. Strengthen the ethical compass by building it into the curriculum. Primary school is not too soon to start.
Olivia Ward has covered conflicts, politics and human rights in some of the world's most corrupt countries.She's been asked for bribes for everything from hotel towels to interviews.