International Anti-Corruption Day

December 9 is International Anti-Corruption Day and last week Transparency International released its annual Perceptions of Corruption report. So it seems a good moment to reflect on corruption. What is it, actually? Why does it matter? And what should our response be?

Transparency International defines corruption simply as “the abuse of entrusted power for private gain”. That can mean many things, ranging from grand corruption at the highest levels where leaders distort policies so they can benefit personally, to the more mundane petty corruption that might occur when citizens are trying to access services from public servants. Often there is a financial motive, but there doesn’t have to be. Political corruption can take place where decision makers abuse their position to maintain power, status or wealth.

So what? Isn’t corruption really harmless? Isn’t it just a way of spreading the wealth? Well, no. The World Bank estimates corruption is a one trillion dollar industry. That one trillion dollars is being spent to the benefit of the few at the expense of the many, fuelling inequality and slowing efforts to eradicate poverty and to improve the lot of the world’s poorest. It means fewer schools, hospitals and roads.

Corruption undermines economic growth. It distorts markets, deters competition and investment, and increases costs for consumers. In stark contrast, trade and investment thrive in a corruption-free, open and transparent environment.

Both the UK and Botswana fare well in the Transparency International Index. The UK is in 14th place, and Botswana in 31st, out of 175 countries. Yet there is no country in the world with zero corruption and we must not be complacent. Our relatively good rankings give us a responsibility to show global leadership in tackling corruption in all its forms.

In the UK, anti-corruption efforts have become a core part of our foreign policy and our engagement with other countries. To quote Prime Minister David Cameron “The best way to fight corruption and drive growth is through what I call the 3Ts: greater transparency, fair tax systems and freer trade”.

The 3Ts were a major theme of the G8 meetings in Lough Erne in the United Kingdom in 2013. That meeting put these issues firmly on the international agenda and led to landmark agreements, for example to promote tax transparency through the automatic exchange of tax information, and to tackle the misuse of ownership and legal arrangements by large companies. In the UK we have committed to make information on who ultimately owns and controls companies public.

These important agreements are now being implemented through groupings such as the G7, G20, OECD, FATF, the United Nations and the main international development organisations such as the World Bank, the IMF and regional development banks.

Turning to Botswana, it is clear that Botswana’s rapid development since 1966 was propelled by wise leadership and a shared vision that led to significant investment in public goods – roads, schools, clinics and so on – and reduced the space for corruption.

Over the years Botswana has also made important investments in institutions like the courts, the Directorate on Corruption and Economic Crime and, more recently, the newly established Financial Intelligence Agency. The last parliament also passed a number of bills to introduce new measures to tackle issues like money laundering. Strong institutions and laws like these matter and the UK is committed to supporting them, for example through a DFID-funded regional programme of support to financial intelligence units.

Yet it would be a mistake for any country, the UK and Botswana included, to rest on its laurels. In my discussions with government here, I often encourage Botswana to look at how it could do still more to show global leadership in rooting out corruption.

There are some easy wins that Botswana could consider. Botswana could turn former President Festus Mogae’s commitment to join the Extractive Industries Transparency Initiative, made in 2008, into action. Botswana could commit to join the Open Government Partnership, a grouping of like-minded countries committed to doing government business in a transparent fashion. Botswana could enact provisions on Freedom of Information and a Declaration of Assets for parliamentarians. Botswana could sign up to the Common Reporting Standard on exchanging tax information.

And, in the longer term, there are business environment issues that – if effectively addressed – will help to promote economic growth and reduce the scope for corruption. The business environment will be the subject of my next blog.
Ultimately it is for Botswana to decide how best to advance the anti-corruption agenda in Botswana. My hope is that Botswana will continue to set the standard, regionally and internationally, for others to emulate. The UK will continue to be a committed partner in those efforts.