Daily Management Review

Lagarde: bribery causes damage of 2% of global GDP


Global bribery leads to damage, which is estimated at $ 1.5 trillion, or 2% of world GDP, said Head of the International Monetary Fund (IMF) Christine Lagarde during a speech at the Chamber of Commerce in Washington.

"The annual losses of just bribery are estimated at more than $ 1.5 trln — about 2% of global GDP. Besides, the IMF has been cooperating with more than a hundred countries to combat terrorism and money laundering. Our latest researches underline high budgetary costs of corruption, which leads to huge losses in government revenues and a decline in the quality of government spending,” Lagarde said.

She also stressed that corruption leads to lower growth, increase inequality, as well as contributes to distrust.

"We are confident that appropriate  responses can make a big difference," Head of the IMF said. The new study of the organization associates a lower level of corruption with higher tax revenues, Lagarde stressed.

According to her, the IMF also "stresses the need to improve the system related to the international taxation of corporations."

“Reforming corporate international taxation is a major concern for all countries. But developing countries rely in particular on corporate tax revenues to fund critical investments in people and infrastructure. Our analysis shows that non-OECD countries (Organization for Economic Cooperation and development), each year receive less than $ 200 billion in revenue, because companies can withdraw their profits in low tax jurisdictions,” Head of the IMF said.

She explained that such "lost incomes make it even harder for low-income countries to increase their economic growth and employment."

source: reuters.com