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Two percent global GDP lost to corruption every year

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Lima: Around $1-1.5 trillion or around two percent of global GDP, are lost to corruption every year, president of the Natural Resource Governance Institute (NRGI) has said.

Speaking at a panel on integrity in public governance during the World Bank Group and International Monetary Fund annual meeting on Sunday, Daniel Kaufmann, president of (NRGI), presented the statistic, result of a study by the NRGI, an independent, non-profit organisation based in New York.

However, according to Kaufmann, the figure is only the direct costs of corruption as it does not factor in the opportunities lost on innovation and productivity, Xinhua news agency reported.

“The mis-allocation of talent away from productive activities and innovation” has a costlier impact on countries suffering from corruption in the long term.

A country that addresses corruption and significantly improves rule of law can expect a huge increase in per capita income in the long run, the study showed.

It will also see similar gains in reducing infant mortality and improving education, said Kaufmann.

Countries with better control of corruption averaged a five percent improvement in their budget deficits or surplus in the long term, he said.

Based on the findings of the study, Kaufmann called for a new definition of corruption.

Believing that corruption is no longer a simple transaction between two parties, he called it a “tax on the poor and, increasingly, the middle class… leading to higher levels of inequality”.

“Corruption has shifted to large colluding networks, such as FIFA. These networks shape the rules of the game, institutions, policies and contracts. This is more insidious than petty corruption,” he said.

(IANS)

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World Bank shareholders endorse capital increase plan

Following the capital increase plan announced Saturday, the combined financing arms of the World Bank

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World Bank's prompt decission to pause two seperate projects with India nad Pakistan came after India's objection against it
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The World Bank has said its shareholders endorsed a capital increase package, a series of internal reforms, and a set of policy measures to strengthen the international lender’s capabilities.

The $13 billion capital increase package includes $7.5 billion of paid-in capital for the International Bank for Reconstruction and Development (IBRD), the group’s primary lending arm, and $5.5 billion for the International Finance Corporation (IFC), the group’s private sector lending arm, said the World Bank in a statement on Saturday, Xinhua reported.

World BAnk shareholders to have better plans.

World Bank shareholders also endorsed a $52.6 billion callable capital increase for IBRD, the statement said.

“Through the historic agreement endorsed today, our shareholders have clearly demonstrated a renewed confidence in global cooperation,” World Bank Group President Jim Yong Kim said.

“This capital package allows for greater responsiveness to risks to global stability and security, particularly in poorer countries and fragile states,” Kim added.

Following the capital increase plan announced Saturday, the combined financing arms of the World Bank are expected to reach an average annual capacity of nearly $100 billion between fiscal year 2019 and fiscal year 2030, said the World Bank. Kim said at a press briefing this week that the capital increase package doesn’t target changes of loans to any specific country.

Also Read: India will become High-Middle Income Country by 2047, says World Bank CEO

“It’s about how we think about income levels and how the World Bank Group can continue to be a partner and to support all of our member countries who are still clients,” he argued. He said that the multilateral lender would increase lending to lower middle-income countries over time. IANS