Billions of dollars lost to corruption, $5b repatriated from stolen assets in developing countries – World Bank

The World Bank says billions of dollars are lost through corruption in developing countries each year and almost one-third of these amounts are retrieved.

According to the World Bank, although the exact magnitude of the proceeds of corruption circulating in the global economy is impossible to ascertain, estimates demonstrate the severity and scale of the problem.

“An estimated $20 to $40 billion is lost to developing countries each year through corruption”, the Bank said in a report titled “Barriers to Asset Recovery” which was released Tuesday, June 21, 2011.

But the Bank indicated that the estimated amount “does not capture the societal costs of corruption and the devastating impact of such crimes on victim countries.”

According to the report citing the Stolen Asset Recovery Initiative (StAR) study, only $5 billion in stolen assets has been repatriated over the past 15 years.

The study cites “lack of political will” as a key impediment to the recovery of the proceeds of corruption, the Bank said adding “lack of a comprehensive, sustained, and concerted policy or strategy to identify asset recovery as a priority and to ensure alignment of objectives, tools, and resources to this end.”

The general barriers also include the lack of adherence to and enforcement of anti-money laundering (AML) measures as a means to prevent and detect the proceeds of corruption in the first place, the study indicates.

The World Bank said, theft of public assets from developing countries is an immense problem with a staggering development impact and these thefts divert valuable public resources from addressing the abject poverty and fragile infrastructure often present in these countries.

“Theft of assets by corrupt officials, often at the highest levels of government, weakens confidence in public institutions, damages the private investment climate, and divests needed funding available for core investment in such poverty alleviation measures as public health, education, and infrastructure”, the report said.

In solving this menace, StAR recommended some actions to be taken by international bodies, civil societies etc.

“Because asset recovery is about collective action, we also believe that other critical constituencies—such as the Group of 20, the UNCAC Asset Recovery Working Group, the Financial Action Task Force on Money Laundering, financial institutions, developmental agencies, and civil society—can all take actions that could assist in diminishing the barriers to assets recovery”, the StAR urges.

Also, civil society could use this study to derive a checklist for measuring states’ progress in addressing and overcoming the barriers to asset recovery, said the report.

By Ekow Quandzie

Source: GBN