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International Banks To Collaborate on Corruption Problem

By Eric Green
Washington File Staff Writer

Washington -- The Inter-American Development Bank (IDB) has announced it will work with other international banks located in Africa, Asia, and Europe to address the global problem of fraud and corruption.

In a February 21 statement, the IDB said the international financial institutions had established a task force that will develop what is called a "Framework for Preventing and Combating Fraud and Corruption."  The task force was formed by the international banks at a February 18 meeting in Washington.

Besides the IDB, the other institutions involved in the task force are the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, the World Bank and the International Monetary Fund (IMF).

The task force plans to identify opportunities for collaboration among the institutions on helping countries strengthen their own capacity to fight corruption and on improving cooperation with other groups, including civil society group, to enhance transparency and accountability.

The banks will seek to complete a joint accord in time for the September 2006 annual meeting of the World Bank and the IMF boards of governors.  The accord would increase information sharing, standardize definitions of corruption, improve the consistency of investigative rules and procedures and ensure mutual support for compliance and enforcement of actions taken by any one of the international banks to combat fraud and corruption.

The IDB said corruption is "one of the most significant obstacles" to the success of a nation's development.  With this in mind, the IDB is planning its first anti-corruption conference for the Americas, at a date and venue still to be decided.  Regional public financial institutions and civil society will be invited to help prepare the conference, said the IDB.

The U.S. Agency for International Development (USAID) says nothing does more to alienate citizens from their political leaders and institutions and to undermine stability and economic development than endemic corruption.

Adolfo Franco, USAID's assistant administrator for Latin America and the Caribbean, says consolidation of democracy cannot be achieved without attacking corruption, which he describes as one of the most fundamental problems that undermines a democratic system. (See related article.)

According to the U.S. State Department's publication, Transparency in Government -- How American Citizens Influence Public Policy, democratic governance depends upon the ability of ordinary citizens to hold government officials accountable for their actions.  The full text of the publication is available on the State Department Web site.

For more information on U.S. policy, see The Americas.