G20: Without genuine anti-corruption progress, innovative measures for sustainable development may struggle

By Maíra Martini, Hugh Jorgensen and Johanna Nublat

As the 2024 G20 host, Brazil has called upon fellow G20 members to be bold and take on some of humanity's greatest challenges, such as hunger, poverty, inequality, and climate change.

However, the success of the Rio G20 leaders’ summit in November in advancing sustainable development should not only be measured by what makes it into the summit communiqué, but by what it drives forward. Previous hosts have managed to advance G20 cooperation on anti-corruption measures – will we be able to say the same in 2024?

Corruption poses a pernicious hindrance to sustainable development in critical ways: 1) it undermines the mobilisation of resources for development 2) undue influence in the budget-making process entrenches existing inequalities; and 3) it exploits weaknesses in public expenditure processes that result in lower quality infrastructure and public services. The deadly potential of corruption at the point of procurement was made all too evident during the COVID-19 pandemic.

Because of their huge share of gross world income, G20 countries are in a powerful position to shift global norms and technical standards, including by working more effectively with international organisations. Brazil itself has a one-in-twenty-year opportunity as G20 President to drive forward measures that address the three broad channels of corruption outlined above.

Previous G20 hosts have pursued high level principles and commitments on 'organising against corruption' to protect public resources, tackling conflicts of interest, and promoting procurement integrity, among others. However, while such objectives are laudable on paper, the enabling machinery of corruption continues to undermine the effectiveness of related measures.

So long as there are financial secrecy loopholes that allow the corrupt to easily hoard stolen public wealth in opaque arrangements, often offshore, then Brazil's hopes of developing anticorruption measures for sustainable development will be underdone. By taking concrete actions towards promoting financial integrity, the G20 can raise the cost of corruption and make it easier for authorities to detect and punish financial crimes.

Putting an end to financial secrecy is one such action. Ten years ago, the G20 made history at the Brisbane Summit by approving high-level principles on beneficial ownership; guiding countries to maintain a register of the actual human beings who own, control, or receive dividends from a company. However, some G20 countries still do not have such registers, while others need to improve the quality and verification of information and access to this data.

Secondly, all countries should deepen their cooperation on the monitoring and regulation of enablers: the banks, lawyers, and service providers who facilitate corruption. This enabling component of the transnational corruption machine is concentrated in G20 countries.

Thirdly, international cooperation on financial intelligence must also expand to facilitate earlier detection of financial crimes. G20 anti-corruption pledges in the form of high-level principles, statements, and communiqués are to be welcomed.

However, for such measures to have the desired impact on the wider G20 priorities of combatting inequalities and promoting sustainability, such pledges must be matched by concrete actions.

In 2024, the prospect of a ministerial declaration on anti-corruption and sustainable development offers a key opportunity to link the G20’s anti-corruption agenda with Brazil's headline priorities and the leaders' summit communiqué. Two new G20 taskforces established by Brazil – one for a Global Alliance against Hunger and Poverty and another for Global Mobilization against Climate Change - aim to mobilize funds to finance these agendas. Anti-corruption measures would benefit both initiatives by protecting newly mobilised funds and improving the odds they are spent in the public interest.

Financial transparency is also a critical pre-requisite for Brazil’s headline-grabbing proposal for a 2% tax on billionaires. Economist Gabriel Zucman estimates that taxing the $13 trillion held by the world's 2,700 multimillionaires could mobilize an additional $250 billion annually, which could go some way to bridging the sustainable development goal’s financing gap. Yet its implementation depends on financial transparency mechanisms and cross-border cooperation between financial intelligence units.

Finally, where stolen assets have been located and recovered, they should be redirected towards repairing the damage caused by corruption. Current efforts to renegotiate leniency agreements and grant extravagant discounts to companies that admit to such acts are concerning. Decisions that grant impunity to companies and individuals have already produced negative legal consequences, such as curtailing investigations within countries affected by the export of Brazilian corruption. Brazil’s international efforts in the G20 must be reflected in its domestic policy.

Corruption should not be treated in isolation from other policies, nor as a competing agenda. It is a brake on sustainable development. Anti-corruption efforts must not be sidelined because of polarized political contexts or co-opted by political opportunists who are actually more interested in dismantling structures designed to combat organized crime and corruption.

By effectively implementing existing G20 commitments on beneficial ownership transparency and improving cooperation between law enforcement agencies, the G20 can strike a blow against criminals and corrupt officials while supporting sustainable development and reducing inequality. Without genuine and multifaceted efforts to combat corruption and advance financial integrity, otherwise laudable and innovative G20 measures for advancing sustainable development and tackling inequality will face the risk of being sabotaged from within.

^{This article is based on a piece originally written in Portuguese for the Brazilian news outlet Jota.}