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Kim Promises Zero Tolerance for Corruption at World Bank

Categories: COMPANY NEWS , Corporate Governance
World Bank President speaks on efforts in global development at CSIS.

The head of the World Bank reiterated the institution’s commitment to “decisive” anti-corruption enforcement Wednesday, but said the bank should still be open to high-risk projects. Jim Yong Kim said the World Bank would retain its “zero tolerance” policy for corruption in development work while continuing to invest in projects that could be targeted by corrupt officials.

“We need to take risks for development results, but we need to do so with our eyes open,” Kim said at conference hosted by the Center for Strategic and International Studies in Washington, D.C.

Kim cited the much-maligned Padma Bridge project in Bangladesh as an example of the World Bank’s approach. The bank shut down funding for the $1.2 billion project amid corruption allegations, and said it would re-instate the project only if the Bangladeshi government agreed to thoroughly investigate, monitor and prosecute the allegations. The funding is still suspended.

The bridge would link Bangladesh’s underdeveloped south with the capital, Dhaka, and the country’s main port, Chittagong. Once completed, it would be the largest bridge in the country, or a “steel lifeline,” as Kim put it. While the bank couldn’t consider funding the project until the pre-conditions are met, Kim said, it would still invest in other projects in Bangladesh.

The World Bank ramped up its enforcement measures under the tenure of President Robert Zoellick. The bank’s enforcement unit, the Integrity Vice Presidency, sanctioned 83 entities in 2012 for fraud or corruption on bank projects, a 247% increase from 2011. Kim lauded the work of the unit and its chief, Leonard McCarthy, on Wednesday.

Kim also highlighted the International Corruption Hunters Alliance, a global network of anti-corruption enforcers launched by the World Bank in 2010. Wednesday’s conference coincided with the release of a report by the group summarizing its recommendations on enforcement practices. In the report, Kim said the group’s work mirrors efforts at the World Bank.

“The World Bank Group will continue to act decisively,” Kim wrote in the report. “We will suspend funding whenever warranted, we will publicly name offenders, and we will always consider the best interests of those whose voices have been muted by poverty.”

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