Corruption as an obstacle to development

The Council approved on 4 may 2023 conclusions highlighting the importance of incorporating a strong anti-corruption perspective in all development efforts.

The negative economic impact of corruption is estimated to equal nine times global Official Development Assistance (ODA).

Corruption erodes democracy, trust in institutions, the rule of law and the realisation and enjoyment of human rights. It is also a key obstacle to eradicating poverty as it hits the poor, and the persons and groups in the most vulnerable situations, the hardest. It also exacerbates inequalities and disproportionately affects women, girls and persons with disabilities. Furthermore, corruption supports the existence of organised crime and has a negative impact on security and stability at all levels.

The COVID-19 pandemic has strained resources and reaffirmed the importance of effective oversight of public spending. Russia’s unprovoked and illegal war of aggression against Ukraine has contributed to a global food and energy crisis, exacerbating already increasing inequalities. In this context, the Council notes the increased urgency of adopting a whole-of-government approach to combatting corruption, whenever and wherever it occurs, to ensure that support reaches those most in need and is used in the most efficient manner.

The Council notes that money laundering, tax evasion and international bribery make up a considerable part of illicit financial flows. Therefore, enforcing greater transparency of company ownership, supporting efforts to trace, freeze and recover stolen assets and strengthen anti-money laundering regimes as well as beneficial ownership transparency and rules on incompatibilities and conflicts of interest, lobbying, and revolving doors are important elements in the fight against corruption.

In light of the above, the Council highlights the importance of incorporating a strong anti-corruption perspective in all development efforts, and inter-linked sectors such as health, education, employment, energy security and the fight against climate change. This is especially crucial in public finance management and in contexts where corruption is widespread and identified as a key constraint to sustainable development, such as conflict and crisis, procurement, extractive industries, and large-scale infrastructure projects.

The Council calls on the Commission and the High Representative to take a more strategic, and integrated EU approach to preventing and tackling corruption as an obstacle to poverty eradication and sustainable development.

The Council furthermore calls on the Commission services, the EEAS and the member states to increase efforts to tackle illicit financial flows (IFFs), including funds obtained through corrupt practices.

The Council calls on the Commission services and the EEAS to update the Council regularly on the progress by ensuring that existing reporting mechanisms capture EU measures that contribute to reducing corruption in a broad sense.

Source: European Council, 4 may 2023