Latin America locking horns with corruption, says WEF

PRESS RELEASE - World Economic Form

São Paulo, Brazil, 15 March 2018 - Once dismissed as endemic, chronic and intractable, the problem of corruption is starting to be addressed throughout Latin America. Investigations in Brazil have received most of the headlines, but once-powerful leaders face serious charges in several countries.

"Society is mobilizing to say that we don't want any more corruption," said Delia Ferreira Rubio, Chair, Transparency International, Germany.

To maintain and build momentum, institutions must be strengthened. In the public realm, the rule of law must be bolstered, notably through independent judiciaries and prosecutors. Campaign finance reform is needed. Electoral commissions must have the power to suspend politicians, and they have to use it. An independent and vibrant press must not only be allowed to exist, but also be encouraged. Loopholes that allow unethical but legal behaviour need to be closed.

Ferreira summed it up in what she called the Four Is: "Information, integrity, less impunity and less indifference in society."

In some countries, including Brazil, corruption is facilitated because the executive branch of government is top-heavy compared to the legislature and judiciary, said Torquato Jardim, Minister of Justice of Brazil. Many public contracts are awarded without competitive bidding. This extends below the national level to include governors and mayors. At the same time, many sectors of the government depend on state support, while others are dominated by state-owned firms. "The business person whose sector is not protected will go bankrupt," he said.

When it comes to the role of business, "It takes two to tango," said Ferreira. But sometimes business executives feel that they have no choice. "Either they have to be ready to report the crime or not take part in the game," she said. Initiatives on an industry-wide level, whereby companies agree to stop paying bribes, can serve as an antidote. "If they all agree to not pay, it will end," she said.

On some fronts, new modes of thinking are needed. Business leaders must recognize the economic costs of corruption and take action to reduce them. Voters should use the ballot box to elect and hold politicians accountable, instead of electing candidates who "steal but get things done," as Ferreira put it. All of the perpetrators of a scandal in Brazil a decade ago called the "mensalāo" were re-elected to Congress even though most of them eventually served prison time, recalled Jardim. The development of a new mindset must include discussions of values, education and the adoption of a long-term perspective.

All of the perpetrators of a scandal in Brazil a decade ago called the "mensalāo" were re-elected to Congress even though most of them eventually served prison time, recalled Jardim. The development of a new mindset must include discussions of values, education and the adoption of a long-term perspective.

New technologies can provide powerful tools. Paula Bellizia, General Manager, Microsoft Informática, Brazil, outlined four: Open data - since 2012, Brazil has had a freedom of information law, but much data is indigestible and could be made more accessible with appropriate applications; digital identification - using blockchain technology to ensure the secure identification of individuals; intelligent procurement - algorithms can identify things such as collusion before contracts are awarded; and traceable public spending - blockchain technology can create a transparent and unalterable record. "We can't just use technology to control because we will be the champions of bureaucracy again. We have to improve the quality" of oversight, she said.

As anti-corruption efforts continue, civil society leaders need to help "drive the energy of society through practical channels" using social media and technology, said Ferreira.

The World Economic Forum on Latin America is taking place in São Paulo on 13-15 March. The meeting, which ends today, convened more than 700 regional and global leaders under the theme, Latin America at a Turning Point: Shaping the New Narrative.