Home »

World Bank, United Nations plan looks to return stolen loot to poor

Wednesday, September 19, 2007

UNITED NATIONS -- The United Nations and 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.

Until now, developing countries have encountered legal and other obstacles to recovering such assets from wealthy states.

It took the Philippines 18 years to repatriate US$624 million of former ruler Ferdinand Marcos's money in a Swiss bank account. Last year, Nigeria ended a five-year battle to recover US$500 million parked in a Swiss bank by former dictator Sani Abacha.

The World Bank estimates that between US$1 trillion and US$1.6 trillion is drained from developed countries annually through criminal activities, corruption and tax evasion.

Meanwhile, 25 percent of the gross domestic product of African states is lost to corruption every year at the cost of about US$148 billion.

The bank estimates that every US$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, World Bank President Robert Zoellick said he hoped the StAR initiative would improve cooperation between rich and poor countries over the issue of stolen assets.

"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 added.

He said he hoped the assets recovery scheme would encourage more countries to ratify the U.N. Convention Against Corruption. So far, only four of the world's industrialized nations have ratified the convention. Canada, Germany, Italy and Japan have not.

Zoellick said the StAR initiative was part of the World Bank's overall strategy to fight corruption in developing countries.