20 December 2013

Africa: World Bank Moves Anti-Corruption Work Into New Governance Unit

World Bank President Jim Yong Kim said on Thursday the fight against corruption would become a major responsibility of a new good governance department at the bank as he called graft in the developing world "Public Enemy Number One".

Kim is creating the new division as part of a major reorganisation at the development lending institution - its first in almost two decades.

One of 14 so-called global practices, it will have about 800 specialists in areas such as rule of law, financial and state management, revenue collection and public procurement practices who will provide expert advice to countries on how to improve their institutional structures.

Anti-corruption will be a major responsibility of this new global practice, Kim said.

"Let's not mince words: in the developing world, corruption is Public Enemy Number 1. We will never tolerate corruption and I pledge to do all in our power to build upon our strong fight against it," Kim said at a World Bank event called Speak Up Against Corruption.

"Every dollar that a corrupt official or a corrupt business person puts in their pocket is a dollar stolen from a pregnant woman who needs health care; or a boy who deserves education; or from communities that need water, roads and schools," he added.

Exactly how the anti-corruption agenda will be implemented, however, is unclear.

More than a dozen different offices within the World Bank conduct some type of anti-corruption work and they are expected to be merged into the new structure.

Their responsibilities have yet to be determined. First a director for the global division must be named and World Bank staff said there is an external search for a candidate of high international stature who can bring fresh ideas and leadership.

But the upheaval at the World Bank is immense as the 14 new global practices are formed, World Bank veterans are leaving or must re-apply for their jobs and budget cuts take effect next year.

Kim's aim is to make the World Bank more agile, sharing best practice across different regions and sectors instead of being country-focused and to expand its advisory role rather than focus on lending.

He wants to work in partnership with countries, developing programmes to end poverty and share prosperity, which the government would own and implement.

Under the new plan, the fraud, bribery and corruption investigations now handled by the Integrity Vice Presidency will continue.

But its prevention work around public contracts - such as training World Bank staff on how to detect and deter corruption in World Bank projects and to improve control and compliance - probably will move into the new global practice, said Steve Zimmerman, director of operations in the integrity unit.

"This structure will elevate the significance of governance and anti-corruption as a subset of governance," Zimmerman said of the change.

Until now, anti-corruption has largely been addressed as a fiduciary responsibility for the World Bank in that it must make sure that each dollar is spent responsibly. Making anti-corruption part of good governance underscores its importance as a developmental issue.

In making the announcement, Kim was flanked by James Wolfensohn, the former World Bank president who in 1996 first put corruption on the institution's agenda by calling it a cancer that holds back development, and by Paul Volcker, the former Federal Reserve chairman who oversaw a 2007 review of its anti-corruption investigations.

Volcker said that after a major fight within the bank, it now has internalised the importance of combating graft.

"It is a tough subject, and an unpleasant subject because it gets in the way of what you like to do, which is lend," he said.

The next challenge for the World Bank will be to develop the structures, programmes and procedures to help governments, many of which are getting elected on anti-corruption platforms, to truly implement institutional change and embed anti-corruption into their practices, said Volcker.

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