Emerging issues, new tools and approaches, strategies and lessons learnt in the fight against corruption will be discussed over the couple of next days as part of the Europe and Central Asia Meeting taking place from 15-17 June in the FYR of Macedonia. The meeting, organised by Transparency International’s chapter Transparency Zero-Corruption and the national government, kicked off with a public conference on Monday under the theme Lessons from the EU accession process and neighborhood policy as vehicles to promote anti-corruption reforms. More than 100 activists and experts from all over Europe, from our 40 chapters in the region and governmental and inter-governmental institutions are gathered here at the very beautiful Lake Ohrid.
I would like to share with you the three key issues discussed, three questions the first day is focusing on, and would be happy to hear your views on these issues:
1) The first panel, including representatives from the government, the national EU Mission, the Head of GRECO, the European Anti-Fraud Office (OLAF) and embassies, discussed the EU Accession and related Anti-Corruption Reform in the accession countries. There is a consensus over the positive role the accession process did play in facilitating an improvement on the state of anti-corruption in the region. This is a finding that has been supported by data developed by Transparency International such as the Global Corruption Barometer, or the Corruption Perceptions Index.
However, anti-corruption reforms should be driven from within the country, with a need for political will and social support. Experience has shown however, that after the accession took place, incentives did fall away. There should be no distinguishing between anti-corruption standards within and outside of the EU.
Wolfgang Hetzer, working as an advisor to the Director General of the OLAF, did highlight that ensuring the enforcement of anti-corruption standards and political considerations is a balancing act. In his view, the change of political will in anti-corruption reforms did not only just appear after the accession process ended, but did become evident already much earlier.
2) The second panel discussed the influence of corruption on economic development, from various perspectives, from the viewpoint of a government, a chamber of commerce, international institutions such as the European Bank for Reconstruction and Development (EBRD) and the International Monetary Fund, as well as from think tanks. Generally, all speakers agreed that corruption has damaging effects on the economy and is one of the most important factors in hindering economic development.
Various research on the role of corruption in economic development was presented, from a preview to the latest Business Environment and Enterprise Performance Survey (BEEPS) to the recent Global Financial Integrity report on “Illicit Financial Flows from Developing Countries: 2002-2006“. An interesting number is provided by the latter, stating that capital flight from developing countries amounts up to US$ 1 trillion per year. The Russian economist Andrei Illarionov looked at the correlation between corruption, on the basis of the TI Corruption Perceptions Index, and the development of a country’s GDP, concluding that important factors for increased corruption can be on the one hand the availability of oil, as well as the role of political freedoms, human rights and civil liberties on the other hand.
Corruption could also be seen as an efficient adaptation to weak institutions and an inefficient economic environment, as presented by Alan Rousso, Director for Strategy and Analysis at the EBRD. He raises the question of corruption being just another tax, providing for possibly different approaches to reduce it.
In any case, governments need to look at addressing the sources of corruption, in the wide range from red tape, legal frameworks, to addressing the question of the level of economic freedom in general. But clearly, the financial crisis has sharpened the view for the deficiencies of some markets to regulate themselves, such as the financial sector.
After looking at corruption mainly as an economic phenomenon, in his closing remark, the Minister of Economy of the FYR of Macedonia Fatmir Besimi remembered that dealing with corruption is also a question of ethics, and that questions of political freedom can influence economic development in the long run.
3) The last panel gave a first insight of how the fight against corruption relates to questions of money laundering and tax havens. How to work with the changing nature of corruption, becoming legal when businesses influence the state? How do existing tools to measure corruption keep up with this changing nature of corruption? Vanja Calovic, Executive Director of MANS, a local partner of Transparency International, presented an analysis and case studies of state capture in Montenegro. Not only this analysis showed that as a trans-national issue ignoring borders, efficient cooperation among all involved parties, government, public prosecutors and law enforcement, civil society and the media will be key in addressing the issues such as international criminal networks, money laundering and tax evasion.
More work and research needs to be done, especially on issues such as state capture, or business capture – an issue prevalent in countries of the former Soviet Union, dimensions of financial integrity, and generally, how monies are moved around the world.
Let me close on close on a quote by US President Barack Obama mentioned during the meeting who said that