International Anti-Corruption Day: December 9th
It's International Anti-Corruption day on December 9th.
Corruption is a global issue and one of the biggest obstructions to economic and social development around the world. It is defined by Transparency International as the abuse of entrusted power for private gain.
It's estimated that every year, over $1 trillion is paid in bribes world-wide.
It's also estimated that over $2 trillion is stolen annually through corruption. This equals more than 5% of the global GDP.
Recent analysis from 2019 showed that corruption was more pervasive in countries where big money flows freely into electoral campaigns. And where governments listen only to the voices of wealthy or well-connected individuals.
The Impact of Corruption on Business
When a corrupt individual or individuals negatively affect a business's resources, then the business will have a greater struggle to turn those resources into profit. This is because the resources are reduced to a point where the business can't run effectively or maintain its levels of operation.
And in most situations, a corrupt business becomes a publicly known corrupt business. That business's customers will lose their faith in the business. As such, the business will face penalties and legal fees that will severely impact important resources needed elsewhere.
Another impact to businesses is that investors don't take lightly to the prospect of investing in a company or municipality that's embroiled in corruption.
Corrupt businesses will find it harder to find investors when bribes are required to do business. Investor have to face certain risks when they invest in a business. But if corruption is part of the equation, risks will be increased by the fact that the business climate could change at any time due to the corrupt practices that take place in that climate.
Corruption happens everywhere, at any time.
In the event of natural disasters when it comes time to start rebuilding infrastructure, corrupt business practices can take place with those bidding on building the new bridges and highways, to those actually doing the work.
When it comes to healthcare, in developed countries, fraud and abuse has been estimated to cost governments between many billions per year.
From a sales person giving a trip to a tropical destination to a potential client in the hopes that the prospect will sign on the dotted line, to major business deals being handled behind closed doors, bribery and corruption is everywhere.
There are a few key ways to stop corruption according to Transparency International:
- End impunity
Effective law enforcement needs to ensure that the corrupt are punished. Over time this could break the cycle of impunity, or freedom from punishment or loss.
Successful enforcement is supported by a strong legal framework, engaged law enforcement and an independent and effective court system.
- Reform public administration and finance management
Reforms focusing on improving financial management and strengthening the role of auditing agencies have helped many countries see a greater impact compared to public sector reforms on preventing corruption.
- Promote transparency and access to information
Countries that have seen success in lessening corruption have a long tradition of government openness, freedom of press, transparency and access to information. Greater access to information can increase the better engagement of government bodies, while at the same time having a positive effect on the levels of public participation in a country.
- Empower citizens
Empowering citizens to hold government officials accountable is an viable approach that helps to build mutual trust between citizens and their governments. Community monitoring initiatives have contributed to some detection of corruption, and improved the quantity and quality of public services.
- Close international loopholes
Without access to the international financial system, corrupt officials around the globe would not be prevented from laundering money and hiding the proceeds of their stolen assets. Financial centres around the globe need to implement ways to prevent their banks from cooperating with offshore financial centres and absorbing illicit flows of money.
Stopping bribery and corruption starts at the business level. It begins with creating a more ethical culture and being incredibly aware of any actions taken that could be in violation of laws.
Implementing a speak up culture is the first step in enabling those who witness bribery and corruption to report it.