Interview of Nadir Mohammed, World Bank Country Manager on corruption

Interview of Nadir Mohammed, Country Manager: Denounce corruption

Published in Monitor, weekly economic magazine

Q: Can you clarify for the Albanian broad public the most recent commitment of the World Bank President on fighting corruption in this institution?

A: Since mid-1990s, the World Bank highlighted corruption as a major impediment to development. So in the last decade more attention has been accorded to good governance and to anti-corruption measures. The Bank has identified corruption as the single greatest obstacle to economic and social development. It undermines development by distorting the rule of law and weakening the institutional foundation on which economic growth depends.

The harmful effects of corruption are especially severe on the poor, who are hardest hit by economic decline, are most reliant on the provision of public services, and are least capable of paying the extra costs associated with bribery, fraud, and the misappropriation of economic privileges.

The World Bank President, Mr. Paul Wolfowitz, repeatedly emphasized the above considerations. In his first statement at the Annual meeting (September 2005), Mr. Wolfowitz noted that corruption remains a formidable barrier to development and pledged the Bank Group will continue to fight corruption, including that found in its own projects. To help uncover corruption, the Bank president said, the Bank has been working on a new anti-corruption tool called the "Voluntary Disclosure Program" that encourages companies to volunteer information about their involvement with fraud and corruption on Bank-financed projects, in exchange for reduced sanctions and assurances of confidentiality.

Q: What are some of the factors that have spurred such an initiative of the highest authority of the World Bank?

A: Corruption sabotages policies and programs that aim to reduce poverty, so attacking corruption is critical to the achievement of the Bank's overarching mission of poverty reduction. To reduce the corrosive impact of corruption in a sustainable way, it is important to go beyond the symptoms to tackle the causes of corruption. Since 1996, the World Bank has supported more than 600 anticorruption programs and governance initiatives developed by its member countries.

Q: Has this had any adverse impact in reducing the WB’s authority, in particular in countries where there is widespread corruption?

A: The level of support of the World Bank to developing countries depends on performance criteria and the Governance performance criteria are the most important in assessing such support. Countries that do not perform well or do not have in place institutions and mechanisms to ensure good governance will receive less support from the Bank. The limited support that they will receive will focus on building the necessary institutions and procedures to address corruption and weak governance.

Q: How do you feel personally as one of the WB’s staff, one of the institutions that has been very loud about combating corruption in many countries, and now it has to fight it within the very same institution?

A: World Bank funds are provided to help developing countries reduce poverty.  The World Bank has the responsibility to ensure that the loans and credits it extends, and the trust funds that it administers, are used for their intended purposes.  This policy is enforced through a comprehensive array of rules and procedures aimed at ensuring high standards of integrity, transparency, and accountability in World Bank-supported projects.  The procurement procedures for World Bank-financed projects are monitored by World Bank staff to ensure that the process is free from fraudulent practices and corruption.

The Bank has always devoted enough attention and resources to ensure good governance in its own portfolio. Resources are provided for good supervision, financial management and procurement and other safeguards. We always strife to ensure that the resources are allocated to the intended purposes.

We spent time and resources to investigate all allegations about corruption in our portfolio. The vast majority of corruption investigations focus on projects financed by the World Bank, and only a very small percentage concern allegations about staff.  We would be irresponsible if we didn't take these things seriously. This is not a sign or indication of pervasive problem in the Bank but on the contrary it is a demonstration on how seriously we tackle issues of corruption.

Q: How about the Tirana country office. Have there been corruption problems in this office?

A: There is not a single corruption problem in the office not it has been in past. We also consider seriously any allegation of corruption in our projects and we investigate them thoroughly.

In March 2005, the World Bank announced the debarment of 5 individuals and 6 firms for collusive practices in relation to the World Bank-financed “Water Supply Urgent Rehabilitation Project” (WSURP) in Albania.   These firms and individuals will be ineligible to receive any new World Bank-financed contracts for the periods of their debarments, ranging in this case from one to five years.  One individual was also given a public letter of reprimand.

The actions of the companies and their directors were designed to deprive the borrowing country of access to competitive pricing in establishing bid prices at artificially high levels.  The sanctions taken against the companies show our readiness to safeguard the procurement process in Bank-funded projects and to ensure that the Albanian people benefit from development programs and economic growth.”