Select Committee on International Development Appendices to the Minutes of Evidence


Memorandum submitted by Worldaware

  Worldaware is grateful for the opportunity to submit evidence to the Committee on this important subject. As an organisation committed to promoting greater understanding of global development issues, we welcome the initiatives being taken by the Committee.

  Worldaware has long recognised that corruption is the biggest single inhibiting factor against FDI in developing countries, and has consistently argued that action to reduce corruption will make a significant contribution to achieving poverty reduction goals.

  As part of the work which Worldaware has undertaken recently, we enclose with this note:

    —  A set of three reports published by Worldaware (in conjunction with the Commonwealth Business Council) in 1998 and 1999. As well as providing evidence that corruption is the greatest barrier to investment, the final report goes on to suggest a range of initiatives which may be suitable for further expansion as part of a concerted campaign to eliminate corruption. This report was launched by our Chairman, Sir Jim Lester, at the Commonwealth Heads of Government Meeting in Durban last November. It was warmly received, including by the UK Government (not printed).

    —  A report of a 1998 Worldaware conference on "Overcoming Law-related Obstacles to Investment in Developing Countries", which touches on aspects of corruption and the case for legal and judicial reforms (not printed).

  In addition to these reports, which we hope will help the Committee in its inquiry, we would offer two observations based on our work within our Business Group, which represents over 60 companies ranging from multi-nationals to the very small.

    —  First, the opportunity to overcome corruption in obtaining new business in some developing countries is greater for multi-nationals than for SMEs. This is a factor of the negotiating strength of individual companies, not just the determination of the leaders of those companies to combat corrupt practices. This points to the urgent need to provide assistance for SMEs—whether codes of practice or more practical support on the ground—so that all businesses can compete more equally for business which will assist the long-term health of developing countries.

    —  Secondly, there is no "one size fits all" solution. Each country, and often specific sectors within each country, will pose different challenges. The approach should be to generate a partnership approach for each country which will see a common purpose, and consistent practices adopted by all the stakeholders—Government, NGO, private sector—who are involved in investment and trade-related activities.

  The Worldaware Business Group would be happy to give further evidence to the Committee if desired on its experiences and proposals for reducing levels of corruption.

Tony Boardman

Director, Worldaware

July 2000

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