G8 leaders must ensure success of global recovery efforts
BERLIN, 7 July 2009:-As the world struggles to recover from the economic downturn, Transparency International (TI) has called on the Group of Eight (G8) leaders (fra verdens førende industrilande, red.) meeting in Italy this week to take urgent action to ensure that global economic recovery efforts are not undermined by fraud and corruption.
In its third annual G8 Progress Report issued Tuesday, TI declared G8 performance on key anti-corruption commitments inadequate, a particularly worrisome situation given the risk of corruption in the ongoing rapid disbursement of massive global financial flows intended for economic recovery.
A significant amount of the more than 5 trillion US dollar anticipated for the recovery will fund “big ticket” infrastructure projects and direct budget support.
Given the vulnerability to corruption in such projects, the G8 must constrain companies headquartered in their countries from using bribes to secure contracts and demand fiscal transparency from governments receiving assistance.
This means fully implementing existing anti-bribery commitments such as the OECD Anti-Bribery Convention and the UN Convention against Corruption, which still direly lack enforcement.
The G20 commitment (see below) of more than 250 billion dollar for export credit agencies and multilateral development banks as well as the pressure to disburse funds quickly in order to restore trade flows must be accompanied by sufficient safeguards against the increased risk of corruption and fraud.
The G8 has pledged to protect financial markets from criminal abuse, including bribery and corruption.
This past June, G8 finance ministers acknowledged that a failure of integrity, propriety and transparency contributed to the crisis. They further recognised that existing commitments to address this failure have suffered from insufficient political commitment. It is time for the G8 back up such public acknowledgements by setting specific benchmarks and timetables for future action.
The G20 Action Plan supported by periodic reports on specific progress provides an excellent example of the kind of action needed from the G8.
The G8s existing reports on anti-corruption actions, the G8 Accountability Report: Implementation Review of G8 Anti-Corruption Commitments, falls short in providing consistent, specific information on the way forward. Future reports should address this deficiency and include independent civil society assessments.
As the private sector begins to engage with governments as part of stimulus efforts, G8 countries will need to take the lead in fully enforcing the landmark OECD Anti-Bribery Convention, which promised to stem foreign bribery as a factor in international business and development.
Only Germany and the United States are vigorously enforcing their anti-bribery laws. Canada, France, Japan and the United Kingdom have yet to take sufficient action to deter illicit payments.
Russia is also not implementing its anti-bribery commitments under the UN Convention against Corruption and the Council of Europe Criminal Law Convention on Corruption while Germany, Italy and Japan have not yet ratified the UN Convention.
Transparency International is the civil society organisation leading the fight against corruption. TIs 2009 G8 Progress Report assesses G8 implementation of existing instruments to combat corruption.
See TIs report on the OECD Anti-Bribery Convention on
http://www.transparency.org/news_room/latest_news/press_releases/2009/2009_06_23_2009_oecd_progress_report
See TI statement on G20 Action plan and transparency on
www.transparency.org/news_room/latest_news/press_releases/2009/2009_04_02_g20_response
WHAT IS THE G8
The Group of Eight (G8, and formerly the G6 or Group of Six) is a forum, created by France in 1975, for governments of eight nations of the northern hemisphere:
Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States; in addition, the European Union is represented within the G8, but cannot host or chair.
NOTE: At the meeting this week in Italy the G8 is joined by South Africa, Brazil, China, India, Mexico and Egypt – all of them leading Third World countries.
WHAT IS THE G-20
The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy. The inaugural meeting of the G-20 took place in Berlin, on December 15-16, 1999, hosted by German and Canadian finance ministers.
Mandate
The G-20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.
Origins
The G-20 was created as a response both to the financial crises of the late 1990s and to a growing recognition that key emerging-market countries were not adequately included in the core of global economic discussion and governance.
Prior to the G-20 creation, similar groupings to promote dialogue and analysis had been established at the initiative of the G-7. The G-22 met at Washington D.C. in April and October 1998. Its aim was to involve non-G-7 countries in the resolution of global aspects of the financial crisis then affecting emerging-market countries.
Two subsequent meetings comprising a larger group of participants (G-33) held in March and April 1999 discussed reforms of the global economy and the international financial system.
The proposals made by the G-22 and the G-33 to reduce the world economys susceptibility to crises showed the potential benefits of a regular international consultative forum embracing the emerging-market countries. Such a regular dialogue with a constant set of partners was institutionalized by the creation of the G-20 in 1999.
Membership
The G-20 is made up of the finance ministers and central bank governors of 19 countries:
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and United States of America.
The European Union, who is represented by the rotating Council presidency and the European Central Bank, is the 20th member of the G-20.
To ensure global economic fora and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis.
The G-20 thus brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the worlds population.
