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EuropeAid Addressing the International Drivers of Corruption at the Country Level: Draft Framework Dr. Rachel Flanary, theIDLgroup, UK European Commission.

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Presentation on theme: "EuropeAid Addressing the International Drivers of Corruption at the Country Level: Draft Framework Dr. Rachel Flanary, theIDLgroup, UK European Commission."— Presentation transcript:

1 EuropeAid Addressing the International Drivers of Corruption at the Country Level: Draft Framework Dr. Rachel Flanary, theIDLgroup, UK European Commission Training Seminar: EC Support to Governance in Partner Countries (Africa focus) 4-8 July 2011

2 EuropeAid Scope Introduction International Drivers The Approach Case Studies o Sierra Leone o Cameroon Questions?

3 EuropeAid What do we mean by International Drivers? Ideas from the floor??

4 EuropeAid Introduction Corruption is a global phenomenon Has roots within the domestic political economy Major international factors interact with these domestic processes o Globalisation, cross border banking, multinational corporations and trade liberalisation have benefited the globe in many ways – but have also had negative effects. The infrastructure that facilitates processes between businesses worldwide and legitimate international financial transactions is also vulnerable to being used for illicit purposes. Laundering proceeds of corruption abroad, paying bribes or transferring stolen public funds into accounts that benefit

5 EuropeAid Introduction International instruments and initiatives (e.g. EITI, EUs Forest Law Enforcement Governance and Trade – FLEGT, Financial Action Task Force etc.) Growing recognition of importance of international drivers OECD DAC - analytical tool to help understand the processes by which international drivers affect governance and corruption in different country contexts

6 EuropeAid International Drivers the global or regional factors that influence the domestic political economy Include: 1.Economic processes at global/regional scale 2.International relations and security trends 3.Other aspects of globalisation e.g. ease of communication Changes in the global economy affect incentives facing political and economic elites in poor countries, But The impact of the global environment on poor countries is not all negative

7 EuropeAid International Drivers 1.Sources of rents and unearned incomes 2.Opportunities and constraints to conceal and move illicit assets 3.Foreign investment 4.Global and regional security threats and responses 5.International legal measures and sanctions against domestic elites 6.Reputational pressures on political elites from regional and international actors 7.External ideas and skills

8 EuropeAid 1. International drivers interact with the domestic political economy 2. The key interactions include the way that international drivers affect elite strategies for winning, using and maintaining power, as well as the conditions for state-society bargaining. 3. The interaction between the international drivers and the domestic political economy generates governance outcomes. This may be assessed in terms of corruption or a broader shift from exclusive to inclusive forms of political behaviour. International Drivers Governance & Corruption Outcomes Domestic Political Economy

9 EuropeAid The Approach – The Four Key Steps Four-step process which: 1.Examines a countrys domestic political economy 2.Identifies international drivers 3.Tracking effects of international drivers 4.Assessing scope for action

10 EuropeAid Sierra Leone: Diamonds and Drugs Poverty, unemployment & history of poor governance and economic mismanagement Protracted civil war that ended in 2002- formal state institutions not robust or deeply rooted Political system dominated by narrow group: Freetown based; range of ethno-linguistic, geographic & religious groups At decentralised levels, chiefs form a powerful elite with considerable control Diamonds has historically been an important source of income for political elite- many diamonds traded through both official and unofficial channels and international networks West Africa, including SL, growing importance as transit route for cocaine

11 EuropeAid Sierra Leone: Diamonds and Drugs SL signed up to EITI with some measure of success. Forced large volume of illicit diamonds out of underground networks and into official channels UNODC played important role in raising awareness of growing importance of drug trade in W. Africa UNIPSIL supports strengthening of SL Joint Drug Interdiction Task Force BUT, with huge profits from diamonds and drugs, war weakened government institutions and highly porous borders coupled with… High demand and profit for international players plus high levels of political complicity that is needed to sustain these illicit activities, unlikely to change in short- to medium-term

12 EuropeAid Cameroon- Oil and Timber Cameroon is a low-income country with economy based largely on agriculture and natural resources (oil, timber and minerals). EU accounts for 80% of exports of timber!! Large-scale timber exports- 80% in EU markets State governed according to personalised rule, with weak adherence to formal rules. Centralised around Pres. Biya Stable country in a conflict-prone region- porous borders Evidence of widespread corruption in oil and timber o Elf Aquitaine influence- two-thirds of Oil concessions o Timber- corruption again around Concessions + circumvention of regulations

13 EuropeAid Cameroon- Oil and Timber Some signs of increased commitment to improving transparency in oil sector- EITI Encouraging trends in the timber sector. Still high levels of corruption but trends towards regularity and control. In May 2010 Cameroon concluded FLEGT negotiations and will put in place a system to certify the legality of timber and system of supply chain verification International drivers in Cameroon clearly relate to rents generated by natural resource exports. New international instruments have potential to reduce illegality

14 EuropeAid Benefits for the EC Better understanding of how international drivers effect governance of the countries you are working in Better able to identify international instruments to address domestic governance challenges Greater confidence in your understanding of the interactions; Better decision-making on: new interventions :programming : re-directing projects : better targeting of anti-corruption resources.

15 EuropeAid Questions

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