Corruption costs USD 2.6 trillion or 5 pc of global GDP, says UN chief

United Nations: The cost of corruption is at least USD 2.6 trillion, or five per cent of the global GDP, UN Secretary-General Antonio Guterres has said and urged the international community to work effectively against money laundering, tax evasion and illicit financial flows.

According to the World Bank, businesses and individuals pay more than USD 1 trillion in bribes each year, the UN chief said during a session on tackling corruption for the sake of peace and international security Monday.

"Corruption is present in all the countries, rich and poor, the North and the South, developed and developing. Numbers show the startling scope of the challenge," Guterres said, citing the World Economic Forum estimates that corruption costs at least USD 2.6 trillion – or five per cent of the global Gross Domestic Product (GDP).

US Ambassador to the UN Nikki Haley, holding the Presidency of the Security Council, chaired a council meeting on corruption and the undeniable role it plays in leading to and exacerbating violence and conflict.

The US-organised thematic briefing marked the first time the Security Council held a meeting focused on corruption and its consequences for conflict around the world.

People globally continue to express outrage over their corrupt leaders, noting how deeply corruption is embedded in societies, Guterres said, adding "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," the UN chief said.

Guterres said corruption rots institutions, as officials enrich themselves or ignore criminality, deprives people of their rights and drives away foreign investment and breeds disillusion with government and governance – often at the root of political dysfunction and social disunity.

"The poor and vulnerable suffer disproportionately and impunity compounds the problem," he said.

He linked corruption to many forms of instability and violence, such as the illicit trafficking of weapons, drugs and people, and noted that connections between corruption, terrorism and violent extremism have been repeatedly recognised by the Security Council and the General Assembly.

"Large-scale corruption surveys conducted by the United Nations Office on Drugs and Crime found that bribery of public officials was particularly high in areas affected by conflict," Guterres said, adding that in 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, encouraging governments to ensure independent judiciaries, media freedom and whistleblower protections.

Guterres suggested that the international community 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.

Haley, speaking at the meeting, said for all the time spent in the Security Council discussing conflict, the international community hardly ever talks about how corruption fuels the instability, violence and criminal activity that put countries on the Council agenda.

"We pour billions and billions of dollars into trying to fix these problems. We deploy blue helmets, set up massive assistance missions, send experts to all corners of the globe but we fail to recognise the issue that is staring us in the face – corruption," she said.

Nine out of the 10 countries that Transparency International considers the most corrupt in the world are on the Security Council agenda, she said.

"But instead of reflecting on why this is the case, the UN is too often willing to ignore corruption. We fear that addressing it will put off governments and shut off cooperation.

"But this head-in-the-sand approach is backwards. In the most troubled countries in the world, corruption isn't simply a part of the system. Corruption is the system," Haley said, adding that corruption is also often regarded as just the 'cost of doing business' in some countries.

"To those of my colleagues who are serious about fulfilling their duties as members of the Security Council, I urge that we take a longer view. If we fail to take seriously the issue of corruption now, we will doom ourselves to deal with the violence it creates in the future," she added.