I was once in a meeting where the former UN Secretary General Kofi Annan said ‘Corruption is the enemy of poor’.

I have always remembered those words. Kofi Annan is certainly one of the most impressive leaders I have ever meet. But these words always stuck with me and has had a great impact on the work I have carried out in the area of capacity building, Customs reform and modernization.

As Director of the World Customs Organization (WCO) I was respensible for Integrity and Anti-Corruption programmes of the organization and in the 182 member countries. We did a number of successful initiatives in all regions of the world during those years and the work has continued.

As a fundamental tool for revenue collection, Customs has always been accused of being more or less corrupt. I will argue that this today is a myth from the past. There are certainly still huge integrity and corruption challenges in some countries and all countries always have a the problem of corruption, but it should also be acknowledged that we have come a long way.

The moment we realized that corruption in Customs or at the Borders is not a Customs problem but a larger society problem. It needs to be addressed as a society problem. There need to be a political will and 100% support from above to fight corruption. If the overall environment does not allow integrity then there will be no integrity. What we found out is that the medication for this disease is a multilear approach with; leadership, communication, “carrot & stick” policies, controls/inspections, risk filters, independent audits and maybe most important automation – building away use of and access to cash payments. To mention a few measures.

Most important to say is that anti-corruption is not a project but an on-going daily effort. There are always risks for corruption and it is everywhere, always. So this is how we need to fight it.

One time in WCO I invited the #1-3 of the highest ranked countries on Transparency Internationals Corruption Perception Index. It was Finland, Sweden and Netherlands at the time. These countries transparently displayed not only their systematic work and systems against corruption, but they also told openly about their hundreds of found and mitigated cases every year.

Many developing countries of the membership afterwards described this session as breakthrough since they felt for the first time that the western world was sharing and not pointing finger at poor countries, “saying this is your problem” – while it is not. Corruption is always our problem and corruption is always the enemy of the poor.

This is also why I enjoyed the article from the WEF (also referring to work by the IMF) her below showing corruption consequences. Read it. There are many interesting perspectives described.

No country is immune to corruption. The abuse of public office for private gain erodes people’s trust in government and institutions, makes public policies less effective and fair, and siphons taxpayers’ money away from schools, roads, and hospitals.

While the wasted money is important, the cost is about much more. Corruption corrodes the government’s ability to help grow the economy in a way that benefits all citizens.

But the political will to build strong and transparent institutions can turn the tide against corruption. In our new Fiscal Monitor, we shine a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption.

“Political will can turn the tide against corruption.”

We analyze more than 180 countries and find that more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes.

We show that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption.

A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP.

Corruption also prevents people from benefiting fully from the wealth created by their country’s natural resources. Because the exploration of oil or mining generates huge profits, it creates strong incentives for corruption. Our research shows that resource-rich countries, on average, have weaker institutions and higher corruption.

The Fiscal Monitor shows that countries with lower levels of perceived corruption have significantly less waste in public investment projects. We estimate that the most corrupt emerging market economies waste twice as much money as the least corrupt ones.

Governments waste taxpayers’ money when they spend it on cost overruns due to kickbacks or bid rigging in public procurement. So, when a country is less corrupt, it invests money more efficiently and fairly.

Corruption also distorts government priorities. For example, among low-income countries, the share of the budget dedicated to education and health is one-third lower in more corrupt countries. It also impacts the effectiveness of social spending. In more corrupt countries school-age students have lower test scores.

Corruption is also a problem in state-owned enterprises, such as some countries’ oil companies, and public utilities like electric and water companies. Our analysis suggests that these enterprises are less efficient in countries with high levels of corruption.

Where there is political will, there is a way

Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector.

Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption:

Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations.

Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency.

Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top.

Sources: WEF, IMF

ITC boss Arancha Gonzalez, who I hold as one of the strongest voice for fair trade on the global scene, recently spoke at an event at Georgetown Law she articulated what is needed going forward.

She said that to make trade matter for everyone we need:

  • To oppose trade protectionism;
  • To support multilateral cooperation on trade;
  • To help people displaced by imports and machines;
  • To end economic exclusion, and we need to
  • To address tax competition

As alsway, spot on. I couldn’t agree more.

The Guardian has asked five UK-based correspondents from European newspapers reveal their hectic lives and their readers’ views on Britain since the referendum. Interesting observations.

One of the reporters, Antonello Guerrera, La Repubblica writes: ‘European readers are becoming rather fond of the glorious House of Commons and of the British parliament’s theatricality, the British seem increasingly unhappy with it: according to a recent survey, more than half of them would like to see “a strong leader willing to break the rules.”

And yet, now more than ever, Britons should be proud of their parliament and of the mess it has unleashed. Because its political debates are authentic, intense and passionate. Because serious politics, such as dismantling 40 years of links with the EU, is a far slower and more tortuous process. And because in other countries, the parliament does not have the same character or importance: in Italy, for example, there have been brawls, and debates are quashed with votes of confidence; in France the parliament comes a strict second to the Élysée; and in Germany there is just not the same emotion.

Two weeks ago I had the privilege of interviewing John Bercow at Westminster. Today the Speaker is an idol in Europe for his bellowed rhetoric that blends Shakespeare and Monty Python. Despite the Munchian zeitgeist (never has an exhibition seemed so timely as the British Museum’s this April), British politics is ever more appreciated abroad; Mr Speaker explained to me why – it is because, here, the parliament is the soul of everything’.

“Breakfast with a Brexiter MP. I go continental. He has the full English”

Sonia Delesalle-Stolper, Libération

Guerrera continues: ‘Brexit is one of the most exhausting stories I have covered, but it is also the most charming – because, amid the intrigue, twists and turns, how could you be bored? No one knows how it’s going to end. But, meantime, God save Westminister’

Read the entire article here: What does the rest of Europe think about our Brexit shambles?

Source: The Guardian

This morning Los Angeles Galaxy won 2-0 towards Philadelphia Union in Major Soccer League (MSL).

Zlatan Inrahimovic score both goals in the game. Ibrahimovic has now scored six goals in four games this season.

The start of the LA Galaxy this season is the best since 2010. This night’s victory was Galaxy’s fourth straight home win.

After the EU granted a Brexit extension until 31 October, or sooner if Theresa May can get a deal through the Commons before then, the Guardian have had a look at the prime minister’s options.

1. Strike a pact with Jeremy Corbyn

Labour says the government is engaging seriously in the negotiations, which were announced by the prime minister in a dramatic Downing Street statement after last week’s marathon cabinet meeting.

But it is unclear whether leave-supporting cabinet ministers, or even the prime minister herself, are ready to stomach the compromises that would be required to win a majority in parliament.

If the two sides could strike a deal though, they could agree a parliamentary timetable for ratification – in theory at least, before the 22 May deadline for participation in European parliament elections.

2. Agree a plan for Commons votes with Labour

May has said that if she cannot reach a Brexit deal with the opposition, she hopes to persuade them to sign up to some process of parliamentary votes, which both sides would then agree to abide by.

But it is unclear whether a majority would emerge for any option even then: there was some discussion at the marathon seven-hour cabinet meeting about using some preferential voting system.

But if a softer deal, with a customs union, did emerge on top, May could say, as she did with the request to delay Brexit, that the outcome wasn’t her choice, but had been forced on her, and she would obey the will of parliament and enact it.

3. Bring her deal back to parliament – again

May continues to believe that her deal is better than any compromise agreement she is likely to strike with Labour – and unlike such a deal, it has the backing of her cabinet.

There had been rumours at Westminster that she could venture a fourth vote on her deal on Friday, in the hope that the unpalatable prospect of fighting European elections would tempt more colleagues to support it.

The government has backed away from that idea, sending exhausted MPs off for an Easter break instead.

But if the talks with Labour fail even to agree a process for finding a majority in parliament, she could still attempt to bring her deal back in some form, perhaps by tabling the withdrawal agreement bill. Or it could be laid down as one option in a process of indicative votes.

4. Call a general election

When her deal was rejected by MPs for a third time last month, May appeared to hint that she would consider calling a general election to break the impasse at Westminster, telling MPs: “I fear we are reaching the limits of this process in this house.”

She could still judge – perhaps after another spring walking holiday like the one she took in 2017 – that a general election could provide a way out.

But cabinet was warned last week that the Tory party was ill-prepared to fight a general election and struggling in the polls. Moreover, CCHQ sources suggest the pool of prospective parliamentary candidates is just as divided on Brexit as the current crop of MPs, so even a solid majority wouldn’t necessarily solve the conundrum.

Under the Fixed-term Parliaments Act she could only call an election with the backing of two-thirds of MPs anyway; and many on her own side would view with dread the idea of once again boarding the Maybot’s “strong and stable” battle bus.

5. Call a referendum

May believes her deal – which would allow the government to control migration – is closer to what Brexit voters want, than the alternatives.

And ardent supporters of the remain cause have said they would be willing to vote for the prime minister’s deal, if she would allow the public to ratify it, in a “confirmatory” referendum – which of course they would then hope to use to overturn the result of the 2016 poll.

The prime minister has never seemed the slightest bit tempted by that quid pro quo, even suggesting “social cohesion” could be threatened by another vote – and she’s hardly renowned as the world’s greatest campaigner.

6. Resign

When May said before the last Brussels summit that “as prime minister”, she did not want to see Brexit delayed beyond 30 March, some MPs read it as a promise to resign, rather than accept a longer extension to article 50.

She has now had to swallow her pride and accept a six-month delay; and was forced to offer to step down once Brexit is over, to win the support of Boris Johnson and others for her deal. He and a plethora of others have been jockeying for position ever since.

Perhaps she might judge on this year’s walking break that enough is enough, and one of them should be given the chance to push Brexit over the line: but her resilience and staying-power are, of course, legendary.

Source: The Guardian

Former DG of WTO Pascal Lamy, explains exactly why a Customs Union is not solving all of UKs challenges post-Brexit. A thing I have argued the last two years. A Customs Union is about tariffs, it will not remove non-tariff barriers.

Lamy writes: “Labour’s proposal may not be as simple as it seems: a customs union is favourable but comes with downsides”.

“At the heart of the Labour proposal is to stay in a customs union and continue to have a say over EU trade policy. Some have called this a “soft Brexit” but, as with everything in this debate, on closer inspection it is not quite so simple.

We should all remember that from 1957 to 1993, the European Economic Community was a customs union with internal borders. They were removed only when enough evidence of harmonisation or mutual recognition of regulations was there. The single market without borders is about regulatory homogeneity. Leaving the single market reintroduces a border – the thickness of which depends on the degree of regulatory divergence. The customs union is about the common external tariff. The single market is about common regulations.

Clearly, staying only in a customs union would not be enough to solve the Irish border question. To take just one commonly cited example: if the UK remains in the customs union with the same common external tariff but imports chlorinated poultry from the US, there has to be a border, because the EU does not accept the marketing of chlorinated poultry. This is a rule of the single market”.

Pascal Lamy is former director-general of the WTO and former European trade commissioner

“The EU is unlikely to accept a request from the UK that it should have a say over the EU’s trade agreements. Article 207 of the Lisbon treaty makes clear that the common commercial policy is exclusive to the EU’s direction. Turkey, which is in a partial customs union with the EU, has to follow EU trade agreements with third countries but has no say on them. The reality is that in a customs union all the power would rest with the EU, with the UK as a follower.

The EU is the world’s largest trading bloc. It has successfully negotiated with more than 70 countries around the world. It is understandable that the UK does not wish to say goodbye to the influence and clout that being part of this bloc provides. But there is little point pretending that there is a simple or cost-free way of retaining the benefits of this while leaving the EU.

Being in a customs union might be better than not being in a customs union, but it would come with very real downsides too. It is important that these are also considered”.

You can read the article here: Staying in a customs union after Brexit won’t resolve the Irish border issue

Source: The Guardian