World Bank, UN launch plan to recover stolen loot
Tue 18 Sep 2007, 5:50 GMT
By Lesley Wroughton
UNITED NATIONS (Reuters) - The United Nations and the World Bank launched an initiative on Monday to make it easier for governments in developing countries to recover stolen assets stashed in rich countries by corrupt leaders.
The Stolen Asset Recovery initiative, or StAR, aims to encourage rich countries to return the loot and for developing countries to properly invest the recovered funds in social and anti-poverty programs.
"There should be no safe haven for people who steal from the poor," said World Bank President Robert Zoellick.
Until now, developing countries have encountered legal and other obstacles in the tracing and recovering looted funds.
It took the Philippines 18 years to repatriate $624 million of former ruler Ferdinand Marcos's money in a Swiss bank account. Last year, Nigeria ended a five-year battle to recover $500 million parked in a Swiss bank by former dictator Sani Abacha, who is believed to have siphoned up to $5 billion from Nigeria in just five years.
The World Bank estimates that cross-border flow of global proceeds from criminal activities, corruption and tax evasion is between $1 trillion and $1.6 trillion.
Meanwhile, 25 percent of the gross domestic product of African states is lost to corruption every year at the cost of about $148 billion.
The bank estimates that every $100 million recovered could fund treatment for more than 600,000 people infected with HIV/AIDS or provide 100 million people with malaria drugs.
In an interview with Reuters, Zoellick said he hoped the initiative would improve cooperation between rich and poor countries over the recovery of stolen assets.
Financial centers should also increase the transparency and adopt best-practices for accepting funds from outside their borders.
Returning looted assets was not only a matter of justice but a fundamental development issue, he said. He said the World Bank was in the early stages of working with Haiti to recover funds stolen by Jean-Claude Duvalier, or Baby Doc, who succeeded his father, Francois, as the ruler of Haiti in 1971.
"To be successful we have to get the attention of the developed countries and make sure they understand the gravity of the situation," he said.
"There have been changes in the behavior of some like the Swiss, who understand that it's not good for the reputation of major financial institutions, to say nothing of countries, to be associated with billions of dollars of stolen funds from corrupt leaders in poor countries."
He said he hoped the assets recovery initiative would encourage more countries to ratify the UN Convention Against Corruption, a 2005 anti-corruption treaty ratified by only 92 countries. Among the Group of Eight industrialized nations only Canada, Germany, Italy and Japan have not ratified it.
Zoellick said he knew of no opposition by countries who had not yet ratified the treaty, adding that the delay had more to do with passing legislation.
UN Secretary-General Ban Ki-moon told a news conference the StAR initiative would ensure looted assets were returned to their rightful owners.
"Together let us make the initiative into a strong deterrent for those who may be tempted to steal public funds and let us use it to strengthen the capacity of governments to improve the lives of millions of people," he said.
Zoellick said the StAR initiative was part of the World Bank's overall strategy to fight corruption in developing countries. The poverty-fighting institution would provide financial and technical assistance to strengthen institutions in developing countries and to ensure domestic laws complied with the UN anti-corruption treaty.
Ngozi Okonjo-Iweala, Nigeria's former finance minister who was at forefront of recovering Abacha's stolen money, said the initiative should be a deterrent to corrupt officials that stolen money would be returned.
© Reuters 2007. All Rights Reserved.
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