"Seal the Deal" in Doha

 

From Words into Deeds

Conference of the States Parties to the United Nations Convention against Corruption

Doha, 9 November 2009

Mr. Chairman, Excellencies, Ladies and Gentlemen,

 

I would like to begin by thanking the Heir Apparent of the State of Qatar, His Highness Sheikh Tamin Bin Hamad Al-Thani, for his vision, hospitality and leadership in hosting us in his beautiful country. I also welcome Attorney General Dr. Ali Al-Marri, the incoming President of the Conference of Parties, who will guide us through this Doha meeting and into the next Session in 2011. And we should all take this opportunity to thank Indonesia for its Presidency since Bali.

 

A good chance, after the disaster

 

Talking about Bali, how the world has changed since we met there two years ago! There has been a global financial crisis, which triggered an economic crisis that turned into a social crisis. Output declined, jobs vanished, families lost their homes, world trade stopped dead and - in desperate rescue efforts, national treasuries have been depleted.

It would be inaccurate to blame corruption for all this. Yet, corruption did play a part in undermining the global system: the crisis was the result of corrupted minds, as much as of corrupted practices.

During the week you will debate, and expose, how rotten the world's economic and financial system, and its operators, had become - and what to do about it. As an introduction, allow me a few considerations of an historical nature.

If we look back at the recent past, we see that globalization -- the irresistible process unleashed by the end of the Cold War, twenty years to the day -- produced three major developments, now spun into a single thread:

  1. Globalization spurred global economic growth, by facilitating the free movement of people, goods and services. It fostered the birth of new economic giants, especially in Asia and Latin America. This was beneficial to the world economy, though also accompanied by an unprecedentedly skewed income distribution;
  2. Globalization also promoted the world-wide boom of stock markets and the integration of the banking industry. It made lots of people, then rich on paper, feel good. It also nurtured in financial markets a culture of gambling, with dramatic consequences;
  3. Finally, globalization allowed transnational organized crime to become macroeconomic in size and global in its reach: a threat that only now we have started to appreciate, and counteract.

These developments (call them the good, the bad and the ugly) today have become intertwined, into a knot of problems hard to disentangle. World economic growth is recovering slowly, after a crash that had dramatic consequences, especially for developing countries. After major systemic failures, financial markets have been rescued by imposing massive debts upon future generations, and at the expense of other priorities, including development assistance. International mafias, cash-rich at a time of large-scale illiquidity, have found a unique opportunity to penetrate both the financial and the real economy, world-wide.

Was this the result of bankers' greed in financial centres, or was Mammon unleashed across the planet? Hard to say: whether the monster is in the human entrails or outside, it was corruption that acted as its mid-wife, cause and consequence of today's crisis. Think of this:

  1. Governments allowed the system, and its main actors, to get out of control. Some businesses, too corrupt to succeed, were deemed too large to fail. Without rules and without a conscience, financiers and corporate tycoons alike turned their dealings into a free-for-all game;
  2. Bankers, fund managers, commodity traders and realtors sold their services (and their souls), first to make huge sums of money and then -- once the system collapsed -- to draw money so as to avoid foreclosure;
  3. Armies of auditors, accountants and lawyers became mercenaries to licit and illicit industries - covering up dirty dealings, and giving them an air of legality;
  4. Ratings agencies and advisory services, first taught the corporate world how to cheat the system, and then gave them a clean bill of health;
  5. Offshore financial centres - already notorious for low ethics and high returns - have been happy to accept money from any source; no questions asked.

This is how, and here is where, corruption mid-wifed the crisis.

We should not despair, though, as crises can always be turned into opportunities. Indeed, I urge you all, as Parties to the UN Convention against Corruption, to recognise that there is a silver lining to the current crisis: an unprecedented chance to rebase the world system, on the rules of integrity enshrined in the Convention. Now is the chance, indeed the necessity - as recognized by G20 leaders - to use the treaty as a blueprint for restoring confidence in markets, businesses, and governments.

 

I am not only addressing Member States: this Convention is not just the property of governments. Since corruption hurts us all, we all have a shared responsibility to prevent and fight it. I therefore welcome the broad spectrum of participants here: parliaments, the media, the private sector, and civil society. Such an alliance has been instrumental, elsewhere, in driving global efforts to correct climate change - I hope that governments in Copenhagen will seal the deal. Let's do the same here and agree to correct the global corruption climate: in Doha let's seal the deal.

 

The costs of corruption

 

While corruption is a serious crime in itself, it is also a lubricant for other forms of crime. How is it possible that 1000 tons of heroin, another 1000 tons of cocaine, and untold amounts of cannabis and amphetamines every year cross borders unhindered? Or that massive logs, illegally cut, are floated down rivers for hundreds of kilometres without being stopped? Or that inmates in maximum security prisons run criminal networks, even order the executions of business competitors? Or that terrorists gain access to restricted areas and confidential information in order to carry out deadly acts?

 

The answer is the "C" word: corruption.

 

The perpetrators of these criminal acts are to blame, for sure. But so are those who accept the "C" money - from border guards to senior government officials, from corporate lawyers to chief executives, from nurses to bureaucrats who refuse to provide services unless paid a bribe. When dirty money greases a palm, the hand is stained with blood.

For sure remedial action is needed, justice must be done, and people should get their money back. But sometimes it is too late. Stolen assets, when recovered (and here I pay tribute to the great work done by the StAR initiative) are always diminished in size, hurting social programs. Above all, you can't recover lives lost because health funds were stolen by kleptocrats.

A new era of prevention

 

Therefore, while more anti-corruption law enforcement is badly needed, more must also be done to prevent it. I urge you to use this Doha meeting to show that corruption is preventable -- not a fact of life, or part of doing business.

 

Many countries still lack specialized, independent, and well-funded anti-corruption authorities: too often, there is much interference, little money. Even in developed democracies there is insufficient transparency in the hiring of public officials and the funding of political parties. In line with the Convention, all politically exposed persons should disclose their incomes and assets.

 

Above all we must tighten tendering and procurement rules. This is the area of greatest abuse - where the interests of the private and public sectors coincide, and big money is at stake. And we have to jam the revolving door of civil servants who take on private sector jobs related to their previous functions.

A review mechanism: not a deal too far

 

The other legacy of this meeting should be agreement on the implementation review mechanism. At the moment, corruption is in the eye of the beholder, based on perception. We have no way of knowing how effective the Convention is, how successful countries have been (or not) in their efforts. Without a yardstick to measure progress, there can be no targeted technical assistance.

Many governments (a dozen in the past few months) have come to power promising to fight corruption. Unfortunately, the world-over good campaign intentions are easily betrayed. Political determination may exist at the highest level while, (at the other extreme) anti-corruption officials may be trying hard. But change is often blocked by a layer of power brokers, right in the middle of national bureaucracies, who protect their (frequently illicit) interests. The monitoring mechanism will break this resistance, and help those who are genuinely trying.

 

I therefore urge you, as called for in the Convention, to agree - before Friday - on a review mechanism that is above all transparent, non-intrusive, inclusive and fair. It must be a technical inter-governmental review, not a game of name and shame, so that states must measure progress against themselves, not against each other.

 

Since Bali, test pilots have successfully shown that such a mechanism can be realistic. I urge you to overcome remaining (minor) differences and move from the pilot run to cruising speed.

 

Ladies and Gentlemen,

 

I hope you are ready to seal the deal. You have nothing to fear, and for sure nothing to hide - so open yourselves up to peer review. With this mechanism, for the first time ever, the world will have a clear picture of how much progress we all are making in confronting corruption.

 

I thank you for your attention.