Dubai: When Mohammad Bouazizi set himself ablaze in defiance of bribe-seeking police last winter, he demonstrated with alarming effect that corruption can kill.
The lack of a national banking registry, cross-border mutual legal cooperation and non-enforcement of money laundering laws are hampering the recovery of stolen assets, a latest World Bank report said Tuesday.
Developing nations are losing up to $40 billion (Dh146 billion) annually due to a number of factors including corruption, nepotism, regime change and ill-gotten money by politically exposed persons.
"The death of the 26-year-old Tunisian fruit vendor served as a catalyst for a surge of protests that unfurled across North Africa and the Middle East. It is now clear that these protests will have lasting effects on the political landscapes in the region," Transparency International said in a recent report.
Recent revolutions and uprisings in the Middle East and North Africa have raised questions about the capacity of financial centres to stop the flow of resources generated by corruption, according to Barriers to Asset Recovery — a World Bank recovery released yesterday.
"An estimated $20 to $40 billion is lost to developing countries each year through corruption. What this estimate does not capture are the societal costs of corruption and the devastating impact of such crimes on victim countries.
"Theft of assets by corrupt officials, often at the highest levels of government, weakens confidence in public institutions, damages the private investment climate, and divests needed funding available for core investment in such poverty alleviation measures as public health, education, and infrastructure," the report said.
Recovery initiative
The Stolen Asset Recovery Initiative (StAR) estimates that only $5 billion in stolen assets has been repatriated over the past 15 years.
The huge gap between even the lowest estimates of assets stolen and those repatriated demonstrates the importance of addressing the barriers to asset recovery, it says.
The study recommends eight strategic actions and other recommendations for policymakers, legislators and practitioners.
They include the implementation of new policies and operational procedures to foster trust and mentor other jurisdictions, legislative reforms to facilitate freezing and confiscation of stolen assets, and better application of existing measures against money laundering.
"There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries," said Kevin Stephenson, World Bank Senior Financial Sector Specialist and lead author of the study.
