Tackle corruption to boost growth - IMF
Countries can improve economic stability and boost growth and development by fighting corruption, says the International Monetary Fund.
|||Johannesburg - By vigorously reducing corruption, countries can improve economic stability and boost growth and development, according to the International Monetary Fund (IMF).
In a staff paper released yesterday, the IMF said public corruption, defined as an abuse of public funds for private gain, afflicted all economies at all stages of development.
It said governments around the world faced the challenges of addressing citizens’ increased concerns over high corruption as evidenced by recent scandals in many countries.
South Africa has moved from 67th to 61st place on Transparency International’s corruption perceptions index 2015.
The corruption perceptions index is compiled from a composite of surveys conducted by organisations such as the World Bank, African Development Bank and the Organisation for Economic Co-operation and Development.
The Globalist, the daily online magazine on the global economy, remarked yesterday that from Brazil to Macedonia, Iceland to Guatemala, public prosecutors were going after corrupt politicians on an unprecedented scale.
“Never before have public prosecutors so ardently investigated corruption among political elites as they are today.”
In South Africa, opposition parties have demanded that corruption charges against President Jacob Zuma be reinstated after the North Gauteng High Court set aside and described the National Prosecuting Authority’s decision to drop 783 charges against him seven years ago as irrational.
Scandals
The IMF said in some recent global opinion surveys, corruption had been identified as one one of the “most important problems facing the world today”.
It said major corruption scandals were currently front-page news around the globe.
The staff paper said the recent Panama Papers underscored how opaque corporate vehicles could be used to hide profits of illicit behaviour, including tax evasion, corruption and sanctions evasion.
“At a time of rising inequality in income and wealth, there is moral outrage that the rich and powerful are abusing the system to their own advantage. In several countries, citizens have taken to the streets and are sending a powerful signal to their leaders that they can no longer tolerate corruption.”
The IMF said while it was hard to measure properly, the economic costs of corruption could be substantial. It said a recent estimate put the annual cost of bribery at about $1.5 trillion (R22.7trln) to $2trln (roughly 2 percent of global gross domestic product).
IMF leader Christine Lagarde said while the direct economic costs of corruption were well known, the indirect costs might be even more substantial and debilitating, leading to low growth and greater income inequality.
“Given the potential impact of corruption on macroeconomic stability and sustainable economic growth, the IMF has been actively engaged in helping our members design and implement anticorruption strategies.”
BUSINESS REPORT