Christine Lagarde, Managing Director, International Monetary Fund (IMF) speaking at the Brookings Institution, Washington, DC. Photo Credit IMF

September 19, 2017

By Peter OBIORA InvestAdvocate

Lagos (INVESTADVOCATE)-Christine Lagarde, the managing director (MD) of the International Monetary Fund (IMF) on Monday said the annual cost of bribery — just one subset of corruption — is estimated to be between 1.5 to 2 trillion dollars — roughly two percent of global GDP.

“These costs represent the tip of the iceberg — the long-term impacts go much deeper,” Lagarde said in her speech “Addressing Corruption with Clarity,” at the Brookings Institution, Washington, DC.

“None of us are shocked — we know that corruption is a problem and we are trying to do something about it,” the IMF chief said.

She addressed three questions in the context of the IMF and anti-corruption work fight. First, is how the global financial institution define corruption? Second, why is the IMF involved in anti-corruption efforts? And third, what more can the IMF do to help its membership in this fight?

According to her corruption is the abuse of public office for private gain and a complex problem often involving multiple actors who operate in the shadows. “For every bribe accepted, one must be offered,” Lagarde added.

“For this reason, as we assist our members in fighting public corruption, we also are committed to looking at transnational private actors who influence public officials. Private actors may help generate corruption through direct means such as bribery, but they also can facilitate corruption through indirect means, such as money laundering and tax evasion.

The recent example of the “Panama Papers” highlights the importance of these facilitators, and underscores the pernicious way corruption can quietly spread across borders,” the IMF MD affirmed.

In tackling corruption, Lagarde says the IMF must work with its members to increase transparency and accountability, which must go hand in hand with regulatory reform and strengthening legal institutions.

“Regulatory reform does not necessarily mean deregulation, but instead streamlining to reduce the number of gate-keepers in charge of permits, fees, and contracts,” she added.

The IMF chief says a coordinated global effort to stop corruption can make the world a more prosperous place and improve the lives of every citizen.