The Stolen Asset Recovery (StAR) Initiative: A StAR that I hope will shine long enough (though I doubt it)

Perhaps the first best idea that was started under Wolfowitz at the helm of the Bank, a new initiative seeking to recover assets stolen and transferred by corrupt officials and dictators from developing countries.

And the UN is on board, adding some credibility where the Bank lacks it.

Statistics are scary: The proceeds from criminal activities, corruption and tax evasion worldwide is estimated to be between USD 1 trillion and USD 1.6 trillion, and one quarter of the GDP of African States - or USD 148 billion - is lost to corruption yearly, according to the UN. Additionally, public officials from developing and transition countries collectively receive bribes worth between USD 20 billion and USD 40 billion every year, which is equivalent to 20 to 40 percent of flows of official development assistance.

The individual list is also impressive:

Suharto (Indonesia): $15-35 billion; Ferdinand Marcos (Philippines): $5-10 billion; Mobuto Sese Seko (Zaire): $5 billion; Milosevic (Serbia): $1 billion.

Okay, all that’s pretty cool. The mere thought that Mobuto owned enough money to repay Zaire foreign debt always makes me shiver. It’s a good idea to try to recover assets tucked in Swiss Banks.

2 main comments:

a) I don’t know how they’re going to do it but it will be very, very slow. And I’m sure that developing countries will surely not benefit from any support or pressure that could convince Swiss banks and other offshore havens to open their coffers as was done when recovering the assets stolen from European Jews in WW2. It took 18 years to recover $620 million of Ferdinand Marcos’ cash. I’m not expecting a large improvement, unfortunately.

b) It doesn’t seem the initiative is considering the ‘bribing’ party in the transaction. 20-40% of flows of ODA is a helluva lot! And it’s not always stolen secretly; in “The World Banker”, Stephen Mallaby reports that the WB in Indonesia knew that at least 50% of the money was embezzled, but thought it was okay if the rest of the money was being spent in its programmes. (it wasn’t). There's a serious need for more control on the donor organisations' side, and those guys have essentially no oversight. I don't want to give reason to Bill Easterly that 'planners suck' but there's surely a need for oversight on their end.

Now who will?

A final though. The title said something about ‘recovering stolen assets from developing countries’; for a second I thought it’d be about the stolen artifacts and antiquities that populate the Louvre, the British Museum and others. Then, I pushed hope a little further and hoped it’d be about recovering financial assets transferred to the Central Banks of the Colonial powers from their vessels (like the several billion pounds in gold bullion transferred from Egypt to London during WW2). Wishful thinking, huh?