Bribery 'a modern day scourge'

UK Foreign Secretary William Hague writes in The National that bribery is a disease that hits developing countries.

ABU DHABI. 27th October. 2009. William Hague, the Shadow Foreign Secretary for the Conservative Party in the UK, speaking  at the Royal Jet Terminal in Abu Dhabi yesterday(tues)  Stephen Lock   /   The National    *** Local Caption ***  SL-hague-011.jpg
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Bribery is a modern day scourge on international trade. At a time when so many people are struggling through an economic downturn, bribery is a very real disease threatening our prosperity.

It poses a serious challenge to the development of economies and contributes to market failure. It distorts competition, damages free enterprise and blights business. It stifles talent and innovation and kills entrepreneurship. In many cases it is the poorest in society who are hit the hardest.

For business, bribery is a threat that needs to be actively managed, like fraud or embezzlement. Corruption adds up to 10 per cent to the total cost of doing business globally, and up to 25 per cent of the cost of procurement contracts in developing countries.

Doing business in corrupt markets has been found to add costs equivalent to a 20 per cent tax on business. In 2008 and last year, about a fifth of surveyed executives said they had been asked to pay a bribe, with a similar proportion reporting they had lost business to a competitor who paid bribes.

Social costs invariably come hand in hand with costs to business - detrimental effects to employment, health, education and a wasteful depletion of natural resources.

The UK Bribery Act which came into force on Friday is an important step in Britain's efforts to combat bribery. The act will equip the UK courts with some of the most robust anti-bribery legislation in the world.

The act consolidates and brings up to date previous legislation and introduces two new general offences of giving bribes or receiving bribes: an offence of bribery of foreign public officials for business reasons, and an offence relating to commercial organisations that fail to prevent bribery committed on their behalf.

Taking a robust stance on bribery will not just tackle the scourge, but it will act as a spur to business. Robust action against bribery will strengthen free-market forces. It will fuel competition and will ensure consumers and the public get a fairer, better deal. Prices come down, services improve and business grows. But most of all a tough stance against bribery will attract business and investment rather than deter it.

Business agrees with us.

They too would like to see the scourge of bribery removed from business transactions. They will also want to see fair play by everyone and a level playing field for all. All the leading businesses and business organisations in the UK have made clear they want to see an end to this problem.

This is not just a problem for the West or the leading economies. Bribery does even more damage to developing countries that can least afford it. They face enough of a struggle to build economies, create proper tax systems, provide public services such as health and education, and stimulate growth. Bribery adds costs, cheats the system and steals money. It traps people and countries in poverty.

I call on other countries to look hard at their own laws and regulations on bribery and to take tough action against it.

The more that join with us to fight this scourge, the quicker we will beat it. Many countries already have tough laws on bribery but there is no doubt more can be done to make them stronger and also enforce them fully.

The Organisation for Economic Cooperation has led international efforts to tackle bribery and should be commended for their efforts.

The UN Convention Against Corruption is another important international agreement in the fight to build stronger economies and societies.

There are many other organisations such as the G20 joining in the effort to tackle this problem and the UK is keen to work with them all.

I firmly believe that the UK Bribery Act will do more to support business and our trade. But the UK cannot succeed alone. Only by global action, determined leadership and government action in the UAE and elsewhere and through the support of business will we make possible the prosperous future we all want to see.

William Hague is the foreign secretary of the UK