India can use the G20 to fight corruption and reduce global inequality

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Despite unprecedented challenges, 2022 also presented opportunities to circumvent critical anti-corruption issues such as anti-money laundering, asset recovery, beneficial ownership and renewable energy. Credit: Shutterstock.
  • Opinion by Sanjeeta Pant (sanjeeta pants)
  • Inter Press Service

An idea whose time has come

Despite unprecedented challenges, 2022 also presented opportunities to circumvent critical anti-corruption issues such as anti-money laundering, asset recovery, beneficial ownership and renewable energy. When world leaders meet during India’s presidency of the G20, they should prioritize and build on this progress, rather than making new commitments around these issues that they then fail to deliver on.

According to the UN, an estimated 2-5% of global GDP, or up to $2 trillion, is laundered each year. While the G20 has repeatedly committed to the Financial Action Task Force (FATF) anti-money laundering standards, member states have been slow to implement policy reforms. In the wake of Russia’s invasion of Ukraine and ineffective economic sanctions against Russian oligarchs, governments have begun to reexamine existing policies and institutional gaps, especially recognizing the role of Designated Non-Financial Businesses and Professions (DNFBPs), as well as known as “gatekeepers”.

G20 member states are responding to concerns and criticism from their national counterparts regarding non-adherence to FATF recommendations and failure to address “dirty money”. Struggling with the need to prosecute money laundering cases and recover billions of dollars in frozen assets, they are also adapting national laws to do so.

Lack of transparency of beneficial ownership also promotes the flow of laundered money worldwide. The G20 recognizes beneficial ownership data as an effective tool to combat financial crime and “protect the integrity and transparency of the global financial system”.

The Russian invasion helped make this message clear, especially in countries that are popular destinations for people buying luxury goods and possessions. The adjustment by the FATF of its beneficial ownership recommendations in early 2022 was timely. Member States are also introducing new reporting rules and accelerated policies and processes to set up beneficial ownership registers. While there are still gaps in the proposed policy – as indicated here – these are important first steps.

Similarly, the transition to renewable energy, initially cited as an environmental issue and then as a national security issue, is receiving increasing attention from a resource management perspective. Given the size of the potential investment, it is necessary to tackle corruption in the energy sector to avoid potential pitfalls resulting from a lack of open and accountable systems in the transition to a net-zero economy.

The cross-cutting nature of the sector means that a wide range of issues need to be considered, from procurement and conflicts of interest in the public sector to beneficial ownership transparency. The global energy crisis and the priority given to this issue by the Indonesian presidency have helped create momentum around corruption in the transition to renewable energy, and this focus should continue.

Call to India

Corruption-related issues identified here are transnational in nature and have global implications, including for India. For example, with money laundering on the rise in India, it cannot afford to view this as a problem limited to safe havens like the UK or the US. The same goes for the lack of transparency of beneficial ownership or corruption in the renewable energy transition, which fuels illicit financial networks in India and beyond, often crossing national borders.

Finally, corruption has a disproportionate impact on the world’s poor. Almost 10% of the world’s population lives in extreme poverty, a large proportion of which in countries such as India. The G20, under the Indian presidency, offers a unique opportunity to ensure that the voices of the most vulnerable are heard at a global level. By prioritizing the anti-corruption agenda and building on past priority issues and commitments, the Indian government can take the lead in efforts to bridge the North-South divide.

Sanjeeta pants is Programs and Learning Manager at Accountability Lab. Follow the Lab on Twitter @accountlab

© Inter Press Service (2023) — All rights reservedOriginal source: Inter Press Service





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