$2Trillion Spent Yearly On Bribes–IMF

By Ikenga Chronicles September 20, 2017

$2Trillion Spent Yearly On Bribes–IMF

The International Monetary Fund(IMF) has disclosed that the annual cost of bribery is about $1.5 to $2trillion.

Speaking on the corruption at the international scene, IMF said the money amounts to about two percent of global Gross Domestic Product (GDP), stressing that it could have a long-term effect.

The Managing Director of the IMF, Christine Lagarde, said this in a presentation entitled: ‘Addressing Corruption with Clarity,’ at the Brookings Institution, Washington, DC, on Monday.

“We all know that corruption is a complex problem often involving multiple actors who operate in the shadows.

“Consider just one example — a bribe in the extractive industries. Yes, a local official may demand a bribe, or a government ministry may turn a blind eye, but what about the company who proffers the money? Surely, it participates in the illicit transaction.

“After all, for every bribe accepted, one must be offered. For this reason, as we assist our members in fighting public corruption, we also are committed to looking at transnational private actors who influence public officials.

“Private actors may help generate corruption through direct means such as bribery, but they also can facilitate corruption through indirect means, such as money laundering and tax evasion,” she explained.

She noted the growing consensus among members that corruption remains a macro-critical issue in many countries.

“It has become clear that systemic corruption undermines the ability of states to deliver inclusive growth and lift people out of poverty.

“It is a corrosive force that eviscerates the vitality of business and stunts a country’s economic potential.

“Think of a government spending taxpayers’ money on a glamorous, but unnecessary new convention centre, whose ulterior purpose is to generate kickbacks.

“A year after construction begins, it turns out that funds in the social service coffers are somehow no longer available for their original beneficiaries.

“Over time, the money diverted from education or health care perpetuates inequality, and limits the possibility of better-paying jobs and a better life,” she said.

According to her, as this type of corruption becomes institutionalised, distrust in government grows and poisons the ability of a nation to attract foreign direct investment. The result is a negative feedback loop from which it is difficult to break free.

She added: “Millennials feel this reality acutely. A recent survey of global youth revealed that young people identify corruption, not jobs, not lack of education, as the most pressing concern in their own countries.

“There is wisdom in this insight — since corruption is a root cause of many of the economic injustices young men and women experience every day.

“Young people also understand another truth; corruption is not limited to one kind of country or economy — it can impact every nation. From embezzlement to nepotism, to terrorist financing, corruption’s nefarious tentacles can take on different forms depending on the environment where it incubates.”