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Overseas Aid: Corruption

Volume 458: debated on Monday 19 March 2007

To ask the Secretary of State for International Development (1) what assessment he has made of the impact of corruption in British companies upon the effectiveness of good governance initiatives in the developing world; (126938)

(2) what assessment he has made of the impact of corruption in British companies upon the achievement of development objectives overseas.

At a global level the World Bank Institute estimates that US$1 trillion plus or minus 40 per cent. is paid in bribes every year, representing 3 per cent. of the world’s gross domestic product. No firm estimates exist on how this issue affects UK business specifically. The obstacles to measuring corruption scientifically have led to the measurement of perceptions.

Transparency International’s Bribe-payers Index (BPI) aims to evaluate the supply side of corruption by asking business experts in emerging economies for their impressions of the likelihood that companies from the listed countries pay or offer bribes in their business activities. The highest ranked country is the one whose companies are seen as least likely to pay bribes. The UK is ranked 6th out of 30 countries, the 2nd G7 country and 3rd EU country in the table. But the UK is not complacent because, as the UK White Paper on Eliminating World Poverty recognises, ‘Corruption undermines the accountability of political leaders and officials to their citizens. When politicians are ‘bought’ by powerful people or businesses through bribery, or when leaders themselves use personal or public funds to buy support, they become representatives of the few and not the many. In short, corruption is both a cause and a symptom of bad governance.’ Any such impact will undermine work to promote good governance and reduce poverty in developing countries.