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Journal Entry, Corruption Efforts

Written on Wednesday, January 30, 2013
Event at the Center for Strategic and International Studies
Anti-Corruption Efforts in Global Development: A Commitment to Act

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Corruption is a major obstacle to social and economic development and increases the cost of doing business.

“It is not just standing back and pointing a finger, we have to call it out when we see it and stick by our guns, but we feel we also have a responsibility to do everything we can to help people build those effective systems,” Kim told the Center for Strategic and International Studies.

President Kim states the World Bank should not only gather and share data on fighting corruption, but also learn from the history of governments that have been successful. For example, President Kim noted that in Brazil the government has tackled drug-influenced barrios and turned them into safer neighborhoods, while in Italy the authorities have exposed tax dodgers, and in India the government is grappling with anti-corruption legislation. President Kim adamantly stated that the World Bank should not shy away from publicly naming offenders.

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The World Bank has continued to fortify efforts on corruption ever since former President Jim Wolfensohn denounced the “cancer of corruption” in a speech in 1996. The poverty-fighting institution has also come under pressure from major donors, like the United States and Britain, to crack down on corruption to ensure taxpayers’ money does not go to waste.

Although World Bank lending is manipulate by how a borrower scores on governance and fighting corruption, the bank has struggled for a long time over whether to suspend lending to a country when it discovers corruption in bank-financed development projects, or to keep the money flowing while fixing the problem.

For example, in 2012, President Kim canceled a $1.2bn loan for a Bangladesh bridge project after the World Bank found evidence of high-level corruption among Bangladeshi government officials. Credit has not been distributed for the bridge project because the Bangladeshi government officials refuse to address the issues. However, the World Bank has nonetheless committed $4.3bn for over 30 projects in Bangladesh.

How can corruption issues be taken seriously if the World Bank continues to “work around” them? This is more of a mixed message rather than projecting a strong stance..

President Kim’s Speech Transcript, click here

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