.
The writer is an academic and researcher. He is also the author of Development, Poverty, and Power in Pakistan, available from Routledge
International agencies frequently bemoan corruption in countries like Pakistan, framing it as a barrier to growth and poverty alleviation. The recent IMF diagnostic report echoed these familiar claims. Yet what these reports often overlook is the role of Western countries, banks and other institutions in enabling and abetting corruption within poorer nations.
Corruption exists at multiple levels. Even petty corruption by low-paid officials taking bribes to provide essential services is serious problem for those lacking surplus income. Far more damaging, however, is corruption among powerful politicians, senior bureaucrats and corporate actors who siphon off vast sums of national wealth and park it in international financial hubs, well beyond the reach of scrutiny in their home countries. These illicit outflows deprive citizens of resources desperately needed for health, education and social protection.
High-level corruption is often facilitated by multinational corporations and by weak enforcement of international instruments such as Anti-Bribery Convention of the Organisation for Economic Co-operation and Development (OECD) – a grouping of mostly high-income countries which aims to promote economic cooperation and set policy standards, including those aimed at combating bribery in international business. Yet, while OECD’s Anti-Bribery Convention was formulated over 25 years, its meaningful enforcement remains lackluster.
There is ample evidence of misconduct by powerful companies headquartered in major western countries. Many prominent multinational corporations have been implicated in bribery scandals across the Global South. Hundreds of millions of dollars are regularly paid to corrupt officials in resource constrained countries by powerful foreign companies to secure lucrative contracts and favourable treatment. For example, Glencore, a major mining and commodity trading company, pleaded guilty to paying over $100 million in bribes between 2022 and 2024 to officials across Africa and Latin America to gain access to untapped natural resources. Similarly, a former Credit Suisse official was implicated last year in facilitating the misappropriation of public resources from Mozambique.
Investigations by Transparency International also reveal that illicit funds from poorer countries are routinely funneled through offshore jurisdictions such as the British Virgin Islands, Panama and Seychelles. Conversely, jurisdictions like Hong Kong, Switzerland, the UK, the UAE and the US also serve as key banking destinations for transferring and holding illicit assets. In addition, property markets in France, the UK, the UAE, and the US have become some of the most attractive vehicles for laundering stolen wealth.
Despite such irregularities, the US Treasury department recently suspended enforcement of the Corporate Transparency Act undermining the need for financial transparency by American citizens and domestic companies, which could make it easier to hide illicit financial flows. On the other hand, China’s global financing is also subjected to recurrent allegations of opacity and corruption risks.
While precise measurements of illicit financial flows specifically enabled by multinational corruption are difficult to measure, varied estimates suggest that so-called developing countries lose more than $1 trillion annually due to corruption, tax evasion and offshore wealth hiding. Hence, merely castigating local elites or stereotyping poorer countries as being inherently corrupt is not enough. Real reform also requires taking to task western structures and institutions which enable illicit capital outflows, secret wealth parking and corporate impunity.
