The Anti-Corruption Unit of Asian Development Bank (ADB) has black listed 200 firms and individuals in 43 member countries. In Pakistan, the level of corruption is neither worse nor better than several other countries. Pakistan is fortunate that the issue of corruption and fraud is being addressed by the government agencies.
These observations were made by ADB' s Office of Auditor-General Principal Audit Specialist Michael Stevens, now visiting Pakistan on way back from Washington where he attended meeting of senior executives of five multilateral development banks (MDBs) to discuss co-operation in fighting this menace.
More importantly, it emerged from his talk that leading multilateral development banks are working out a joint strategy to fight corruption and frauds. In line with the World Bank and the ADB, the other MDBs are setting up anti-corruption units to share information and co-operate in creating awareness about the corrupt institutions and entities.
The five banks included the World Bank, ADB, EBRD (European Bank for Reconstruction and Development), African Development Bank and Inter-American Development Bank American Bank. They discussed how to deal with the issues of fraud and corruption and work out a better and harmonised system. They also agreed to work with other development banks.
Stevens stated they agreed to work together to seriously fight corruption and frauds and " find best way to deal with this menace". They were holding their next dialogue in June next year, while in February next, a videoconference would discuss two dozen issues on the subject.
This was perhaps for the first time the MDBs were engaged in such an exercise.
According to Michael Stevens ADB does not believe in publicising the list of defaulting firms and individuals and prefers to engage with them in improving matters rather than closing down their businesses altogether.
According to him the World Bank puts the erring institutions and individuals on the web site but ADB doesn't do so nor disclose the names.
However, it was agreed in Washington meeting that the ADB would provide such a list to them on condition of confidentiality, so that an MDB is aware of any pitfalls of dealing with them.
The other MDBs are still to structure there anti corruption units, work out their policy and prepare lists of the corrupt entities.
Speaking about ADB's anti-corruption unit, Stevens said that it was set up in 1999. It had five professionals and equal number of local staff. It had plans to expand but slowly and gradually.
Next year, the name of the unit being changed to integrity unit and a few additional professionals would be added. It would become a pro-active entity. It had limited manpower and financial resources the head of oversight unit was a Pakistani executive Ms Shamshad Akhtar. He highly valued her hard work and dedication to duty.
Speaking rather reluctantly about the blacklisted institutions and entities, Stevens said Pakistan was neither involved in one of the massive corruption or fraud cases. Most of these cases pertain to procurement.
CARs regimes lack legal and judicial system to effectively deal with corruption and fraud. The ADB was engaged with member countries to improve their capacity in fight against corruption, evolve internal controls, and encourage due diligence and look for indications of fraud and corruption.
Similarly, some South East Asian countries lack institutions, legal and judicial system to tackle the problem. Some had even institutionalised corruption.
To check the menace the institutions had to be effective and the civil society should active and vibrant. There should also be a strong political will of the government. And above all, good governance was a pre requisite.
According to his estimate, of the 63 member countries, 43 were in Asia and Pacific. Half a dozen of these countries were in a hopeless mess because they lack capacity to tackle it as there was no legal or judicial system, nor an strong civil society.
He cited the example of Hong Kong being the least corrupt. However, 30 years ago, it was one of the most corrupt. With very effective anti corruption mechanisms and a vibrant civil society it emerged as an example for others. He added that corruption could not be wiped out. At best it could be controlled.
Zero tolerance was must. In the ADB itself four or five persons were fired and a few others were debarred from service, he concluded.