The Group of Twenty (G-20), a world forum bringing established economic powers such as the United States and Japan together with emerging giants such as Brazil, China, and India, concluded a summit last week in Toronto, despite violent protests on the periphery. After eclipsing the Group of Eight (G-8) last year as the premier forum for discussing economic cooperation and development, the G-20 is now in the spotlight as a source of world economic leadership. How it will tackle the sensitive issue of corruption will be a critical test of its effectiveness to meet that responsibility.
Corruption contributes to a host of local, national and transnational problems--including terrorism, drug trafficking, money laundering, and human smuggling. When country leaders engage in corruption, it is especially pernicious in that it increases their power at the expense of the rule of law, thereby discouraging business while increasing poverty. Global Financial Integrity, a Washington DC based advocacy group, estimates that crime, corruption, and tax evasion annually drain up to one trillion dollars from developing countries into offshore financial centers, depriving those economies of needed capital to sustain economic growth.
Using more forceful language than last year's summit in Pittsburgh, the Toronto communiqué asserted that corruption "undermines fair competition, distorts resource allocation, destroys public trust and undermines the rule of law" and that combating it is vital to safeguard "the integrity of markets." Yet while supporting the existing efforts of the joint World Bank-UN's Stolen Asset Recovery Initiative and the Financial Action Task Force, the Toronto summit communiqué did not present new ideas or actions. In fact, the only unique development was the G-20 establishing a Working Group on Corruption that will present new recommendations to the forum at the G-20's November meeting in Seoul.
With regards to corruption, public reception to the G-20's communiqué was mixed. Some G-20 watchers were encouraged by the forum's statements, noting the G-20 rules allow for only two Working Groups at a time, demonstrating that members view corruption as a priority. Others were not so enthusiastic. Raymond Baker, of Global Financial Integrity, described the Toronto communiqué as "long on promises, short on concrete action."
This assessment has a point. Publicly agreeing that fighting corruption is important is neither politically costly, nor does it necessarily translate into better governance. Generally, a lack of specific actions and measurable goals limits the effectiveness of international forums to address corruption. When transitioning from policy statements into practice, details matter.
Over the next five months, the G-20 Working Group on Corruption has a mandate to examine how the forum "could continue to make practical and valuable contributions to international efforts to combat corruption and lead by example, in key areas that include, but are not limited to--
• adopting and enforcing strong and effective anti-bribery rules,
• fighting corruption in the public and private sectors,
• preventing access of corrupt persons to global financial systems,
• cooperation in visa denial, extradition and asset recovery, and
• protecting whistleblowers who stand-up against corruption."
It is hoped that the Working Group will generate bold and innovative policy recommendations based on expert analysis while constructively engaging civil society. At the same time, the G-20's capability to influence policy should not be overestimated -- it has no secretariat, no permanent staff, and its joint statements are not legally binding. Also, with more countries participating and a broader array of interests represented, the G-20 will find it harder to coordinate and commit to joint action than its predecessor.
In addition, not all G-20 members have taken basic steps to combat corruption domestically, much less limiting it internationally. For example, Japan, the second largest economy in the world and member of the G-20, has not ratified the UN Convention against Corruption (UNCAC). Although repeatedly called for in the Toronto and Pittsburgh communiqués, there is no timeline for ratification of the UNCAC by all G-20 members. Therefore, setting reasonable, measurable goals with timeframes, such as complete member ratification of UNCAC, would be an excellent start. Should G-20 members want to go further, providing voluntary disclosures of UNCAC Self Assessment Reports would set a powerful example to others, while helping legislators and civil society pinpoint areas for discussion and improvement.
UNCAC is a powerful tool for fighting corruption, but it requires execution at the country member level. If the G-20 can find the political will to suggest actions that set reasonable, timely, and measurable goals for its membership, then it will do itself a service and at the same time demonstrate its worthiness to global leadership.
Mark V. Vlasic, a former White House Fellow and head of operations of the World Bank's Stolen Asset Recovery Initiative, is a senior fellow at Georgetown University's Institute for Law, Science & Global Security and a partner at Ward & Ward PLLC, where he works on international law and asset recovery matters. Gregory Cooper is a Fulbright scholar and student at the University of Texas School of Law.
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