ADB head urges stronger efforts to curb corruption

MANILA, Philippines — Asian Development Bank (ADB) president Takehiko Nakao has called for increased efforts from the bank’s member countries and development partners to exert more effort in fighting corruption, money laundering and other illegal activities that derail economic development and attainment of social equality in the Asia and Pacific region.

During the celebration of International Anticorruption Day at the ADB headquarters on Friday, Nakao said such activities threaten the stability of the region as corruption could lead to organized crime and terror activities, both of which are threats to conflict-affected countries in the region.

“Corruption, money laundering, and tax evasion damage economic development as well as fairness among people. There is also a growing consensus that these activities are threats to the basic fabric of society, including safety and security,” Nakao said.

“We have a professional obligation to fight these illicit activities. This fight is necessary to advance economic development in the Asia and Pacific region and to promote social equity,” he added.

Nakao said global losses to corruption, money laundering, and tax evasion is estimated at $800 billion to $2 trillion every year—an amount that could instead be used by developing countries to achieve their Sustainable Development Goals (SDG) commitments.

He noted that to combat these activities, ADB has adhered to zero-tolerance policies to prevent corrupt practices from negatively impacting ADB-supported projects.

For instance, ADB introduced new rules in 2015 for both its sovereign and nonsovereign operations aimed at tightening controls for corruption, money laundering, and terrorist financing.

In 2016, ADB updated its anticorruption Policy to include the prevention of cross-border tax evasion.

Nakao also noted  that ADB is increasing its technical assistance to enhance the capacity of developing member countries to meet international standards for tax transparency, counter tax evasion, and protect themselves against aggressive forms of tax planning.

In July this year, ADB established the domestic resource mobilization trust fund with the support of the government of Japan to help countries close tax loopholes in their financial sectors, enhance tax compliance, and develop transparent and effective tax administration.