Corruption robs people of $2.6 trillion every year

Even the word astronomical might not sound big enough when the annual cost of corruption is counted in monetary terms – $2.6 trillion or five percent of global GDP  – much more than the combined wealth of several developing countries.

Highlighting the World Economic Forum numbers, the United Nations this week also revealed that businesses and individuals pay more than $1 trillion in bribes each year.

Add to this an IMF report that public sector corruption accounts for $1.5 trillion to $2 trillion losses to the global economy annually and the fallout for the poor and developing countries and marginalized communities around the world becomes staggering.

Trillions lost every year could have been spent on lifting millions out of the poverty trap.

Although lately, corruption has had led to dramatic fall of several leaders around the world including former Pakistani prime minister Nawaz Sharif, it is not clear how and if the national governments or the world community would be able to recover the wealth and make amends for the lost opportunity to development and access to basic education and health facilities.

The developing countries continue to lag behind ambitious development goals laid out by the United Nations.

Here is how UN Secretary General Antonio Guterres recounted some of the direct losses that corruption inflicts on the people left behind.

• Robs schools, hospitals and others of vitally needed funds.
• Rots institutions, as officials enrich themselves or ignore criminality.
• Deprives people of their rights and drives away foreign investment and despoils the environment.
• Breeds disillusion with government and governance – often at the root of political dysfunction and social disunity.
• Can be a trigger for conflict.
• And, drives and thrives on the breakdown of political and social institutions.

“The poor and vulnerable suffer disproportionately,” he stressed speaking to the Security Council according to a UN statement

But more meaningfully, he observes: “And impunity compounds the problem.”

Corruption is known to be widespread in public sector but is also enabled in environments of instability, violence and absence of governance –  like illicit trafficking of weapons, drugs and people.

Additionally, the UN chief says, connections between corruption, terrorism and violent extremism have been repeatedly recognized by the Security Council and General Assembly.

“Large-scale corruption surveys conducted by the United Nations Office on Drugs and Crime (UNODC) found that bribery of public officials was particularly high in areas affected by conflict,” he says.

More painfully, in the times of conflict, corruption can be especially devastating as it can affect basic needs and exacerbate hunger and poverty.

“It is especially important to build up the capacity of national anti-corruption commissions and prosecutorial efforts,” he told the Council.

Nationally, he believes, the countries encouraging governments to ensure independent judiciaries, media freedom and whistleblower protections would help.

Internationally, the countries should work effectively against money laundering, tax evasion and the illicit financial flows “that have deprived countries of much-needed resources,” and that feed further corruption.

According to a UN release, Guterres recognizes that people globally continue to express outrage over their corrupt leaders, noting how deeply corruption is embedded in societies, saying

“They are rightly calling for political establishments to operate with transparency and accountability – or make way for those who will.”

“I call on leaders everywhere to listen, to nurture a culture of integrity and to empower citizens to do their part at the grass roots,” he says.

Guterres’ remarks have a lot to offer to leaders willing to fix corruption. Even if countries start taking accountable steps to stem corruption it would likely take a long time for the poor to have access to development that has long been denied to them, and the entire international community must answer their questions on practices like supporting corrupt governments, unaccountable dictators and allowing safe harbors for stolen wealth.