 Good afternoon. Thank you very much ladies and gentlemen for joining this session ending corruption the recovery of trust My name is Pedro Rodriguez the Almeida. I'm a member of the executive committee of the world economic forum I'm also the head of the partnering against corruption initiative. So just before passing to miss furohar Who will moderate the session? I would like to say that Ending corruption is far far from being a straightforward Task the world economic forum has been involved in anti-corruption particularly for this initiative for the past 12 years and Over the years moved from compliance to build trust and integrity And I think this is one of the key ideas of the discussion today is a recovery of trust by any corruption Miss furohar is the global business columnist with the Financial Times. I would like her to please introduce the panel, okay? Thank you so much. Thanks for having me here I'm extremely excited about this panel actually more than any other that I've done this week I think it's an incredibly important topic and we have a wonderful group of people here to talk about it So I'm going to briefly do introductions So to my left is minister sapin the minister of economy of industry and digital affairs for France He'll be speaking in French and you all have your devices here When you need them to his left guy standing who is that the University of London and is the author of the corruption of? capitalism which puts forth a thesis about this topic that he's going to share with us David Crikshank from Deloitte who is going to speak somewhat about the history of corruption and other topics Cobas to Swart who is head of transparency international which has done so much around this topic for so many years And VJ Shaker Sharma from Paytm, which is an Indian based firm That deals with digital payments and is looking to basically take the economy away from cash as a way of dealing with corruption So let me just set the stage for a moment. I mean in some ways this this topic particularly after the last year needs no introduction But institutions are having a trust crisis. You might have noticed Political institutions government business NGOs there's a piece of research that probably some of you know is released every year in Davos the Edelman trust barometer And it's actually quite a good study Last year's survey was was pretty bad They found that mass populations had less trust in elites than ever before even though elites themselves Trusted themselves more than ever before so talk about a gap, you know And I think that that's who they're talking about. We're sitting in this room But this year trust fell even further amazingly and you know I have to say my own industry media trust plummeted the farthest, you know, which is not surprising given the fake news scandals Just the sort of toxic nature of the social media sphere right now, but basically all institutions are suffering And in some ways we know this is a response to 2008 the financial crisis Which I would argue and did argue it in my book makers and takers the rise of finance in the fall of American business that was not Properly dealt with and that we're still still dealing with the aftermath But it's also a reaction to things like the Panama Papers To to nationalism to growing populism to the elections that we've seen in the US To brexit. There is clearly a lot of anger and a lack of trust. So we're gonna take the next 30 30-40 minutes or so we're gonna have a conversation amongst ourselves And then we're gonna open it up to the audience and you all can ask questions and take the topic in any direction that you would like So Cobas I'm gonna maybe start with you because I thought that you know when we were speaking You gave me a really interesting post 2008 perspective of what happened I mean, we all put a marker at the financial crisis. We all sort of wonder at least I wonder why wasn't this an incredible Changepoint what happened? Why are we now eight years on still having a crisis of trust and arguably in some ways in worse shape than we were then? Thank you very much. I think if you look back at the financial crisis at the time it happened everybody agreed that there was a breakdown of Integrity in our global financial system and that that had a ripple effect that was quite dramatic Yet if we fast forward over the years, we had a lot of technical issues addressed but essentially The business model of the financial sector stayed the same Yeah, and yet at the end of 2015 the world probably came together as never before With agenda 30 Including embedding for the first time corruption into the same sustainable development goals And there was a lot of optimism at that time 2016 indeed saw a dramatic turn around and you had a very much not only in the US or in the UK Across the world you could see a disillusionment and a breakdown of trust of populations where The anti establishment and anti-lead sentiment is very much one that those people's that make the rules Are then the ones that disproportionately? Benefit from them and they're the Panama Papers and this excessive anti social secrecy surely added to it whilst we should Be cautious not to say these are all just Outcry of the inequalities that we see clearly that helps to fuel this and maybe One should also keep in mind that when you look how much Governments invest to get an economic growth rate of three or four percent and at the same time the amount of illicit flows the amount of corruption that is facilitated is conservatively estimated to often cost economies between five and 20 percent Wow, and then you say why don't we make a greater effort there nothing So if you look at breakdown of trust it is also because not enough is done To actually address the root causes of a system that suffers from a lack of accountability That's a great frame setting and I'm interested in what you say about the amount of money The governments are spending to get a fairly lackluster growth rate by historical standards and so guy I might I might turn to you Governments support actually central banks have poured tons and tons of money into the economy over the last eight years Something like 25 trillion dollars in part because governments weren't able to act But the result has actually been an asset bubble that has enriched the top 20% of the population that owns 80% of the assets You have ideas about the the elites and the sort of rigged system put forward your thesis and tell us Well, I'll come to the central bank question because I think that's really part of the corruption of capitalism the decision by governments to make their central banks independent of democratic control and to be able to develop monetary policy when they're being run by financiers Many of whom happen to just have been employed by Goldman Sachs, but that's a pure coincidence. I'm sure When you do that and then you authorize them to do things like quantitative easing Which pours money into the financial markets to the financiers the very people who were responsible for the financial crash as Many banks have been found guilty of fraud and various other things and yet you give money to those people That's part of my thesis Which is that essentially what we've seen developed particularly over the last 25 years is Rentier capitalism Where the returns to property and in particular intellectual property have mushroomed out of control This is a contrived situation where the rental income share of global income has shot up and the Corruption begins by the politicians and chief executives. Let's be honest Saying they are in favor in favor of free markets They are in favor of free trade They're in favor of competitiveness And at the same time they're constructing a system which deliberately restricts free markets Free trade etc. And above all the passage of trips in 1995 trade related aspects of property has resulted in a huge increase in patents and copyrights and Everyone should realize that the now more than 10 million Patents in force and a huge number of people waiting to file patents and the value of the stock of patents at the moment is Estimated and is a very rough estimate about 16 trillion dollars now Patents are something that you give that a monopoly right To an individual or corporation So you take something out of free market competition Well, you either believe in that sort of system or you believe in free markets But don't stand up and say we are in favor of free markets and at the same time strengthen your intellectual property rights system It's in and I want to end on this particular subject because of the cherry on top of the cake Which is what I thought one of the most undemocratic institutions that you could possibly imagine is the ISD s the investor-state dispute Settlement it allows multinational corporations to sue governments for compensation into hundreds of millions of dollars If in the multinational's opinion the government is making any reform That will affect their future profits Now can you imagine as an individual citizen being able to sue your government for any policy? That affects your future income. We'd be very rich overnight Or there would be paralysis But that's the reality of the ISD s and they they even have the privilege of Appointing one of the three judges The other judge second judge is appointed by the government and the third judge the multinational has to agree This is institutional corruption because who who wins all the cases and What has happened is that hundreds of millions of dollars have been won through this process and they don't have to follow due due process precedent it's all in secret and There is a sort of cherry on the cake and when you say trust You have to think about those institutional mechanisms which are have been built up in the last 25 years That's the first point. Okay Great great thesis and I'll come back to you and dig into parts of that But now I want to turn to the minister and ask You know as as a representative of government. Do you feel capitalism is in crisis and then perhaps you can speak a little bit about Your namesake law that's been passed to try and fight corruption in France and and tell us how it came to be and what What you think it could do Thank you very much. I am sorry for speaking in the French language in Molière's language But I am sure that you will be able to follow My speech I am very interested by what has been said of course those are global reasonings that are trying to Analyze in time and in depth the causes of corruption But when you're in a political responsibility as I am my goal is to be Efficient as quickly as possible efficient against corruption. We see how Damageable corruption is corruption for our institutions for the trust we place in our institutions. It feeds defiance in Democratic countries, but also in countries that are emerging right now It is also very serious from the viewpoint of development in countries That are emerging because the fact that the very structure is corrupted the fact that there is a lot of money that at the end of the day comes to Economic or political Decision-makers is less money for the state and in those countries every single dollar Counts to allow for development and when it comes to the good functioning of our Capitalistic society is whatever the name of the political regime that is making sure that those economies function I think there is a damage from the economic viewpoint as well. Why well because we have Corporations that are in a real Competitiveness trying to bring the best service at the best price and another corporation will win because it won the trade the The public tenders things to other methods Damageable methods and of course it's a perversion of all the good will in the will to produce For companies also to win money, but to do it in a transparent and honest way This is why we need to act and acting is my role What is our action and I will conclude with this well first and foremost We need to act in order to make sure that in our countries we have rules provisions Procedures institutions that are efficient and swift being swift is very important because a fact that is identified One year and condemned ten years later It's not the same as if you identified and you condemn it six months or 12 months afterwards second point and I will conclude it's International the international viewpoint and my law has this objective Provide France and other countries the right tools in order to fight against corruption Thanks to French corrupt or making sure that French corporations abroad and in France will not be corrupted and I believe that this is Absolutely needed. Those are quality tools France actually had a bad reputation Transparency international makes a classification in France whether the middle it was not acceptable We need to be at the very top of fight against corruption and this is what we are doing Let me conclude by the need for international cooperation Fighting international corruption without international cooperation is not working Therefore, we need to have at the level of the 20 at the level of the IMF at the level of the various Corporations in large regions such as Europe. We need a real cooperation in order to be efficient Let me ask you one follow-up question I'm I think that you make a very good point that you have to have international cooperation to really get any of this done because there's So often a race to the bottom and then sort of an arbitrage of different national systems Where do you see the low-hanging fruit to to help overcome that problem? I mean, how can we really get countries together on things like tax evasion and fighting all kinds of corruption? You know trans there's a transatlantic battle going on about this right now, and it's not always helpful Well, I understand perfectly your remark and at the same time I try to be as Optimistical as possible in our collective capacity to move forward and to make progress since 2012 We have meetings at the level of the G20 on this very topic up till now within the G20 It was very simple. If you start it, then I will follow That was a process and basically we were always waiting for someone else to start as from 2012 on tax evasion And as from 2013 2014 when it comes to fighting against aggressive tax optimization and as from 2015 2016 fighting against terrorism funding because Corruption let's remember it it also allows funding of terrorist movements with all the consequences this can have So we had three phenomenon that accumulated and this means that at the level of the G20 at the level of the OECD We made real progress So the only way is not to go for arbitration It is not necessarily to find a medium way some sort of compromise There is no possible compromise when it comes to corruption. We need procedures We need information exchange between the various administrations We need a better trust between the judicial systems of all countries because sometimes you need to be working at Two countries at the same time in order to exchange information and be efficient This is the only way to decrease corruption. Thank you David let me turn to you now for a moment and I want to ask you sort of two questions First I want to get your historical perspective I know you've done a bit of a historical study on corruption And you know if there are any lessons from the past that you think are particularly relevant to the paradigm today Love to hear those but also I want to ask you about the business role Here because it's interesting to me that actually trust in business has fallen less than in other areas So arguably it's a really great time for business to be taking a lead on this topic And yet you don't see too many CEOs really stepping up So maybe you can address both those points two very big questions And I know it's probably everybody here has gathered now There are many different views on how to solve this issue Ending corruption is the title of the session and it is very complex and I Just to give some historical perspective when we've had these problems as long as records have been in existence So in the Roman Empire The elite the rich elite used to pay levies to avoid paying their fair share of taxes So they paid a one-off fee as a bribe and then they avoided avoided evaded Paying their proper share of taxes the generals who who who who ran platoons Also used to collect monies allowances for dead soldiers They never used to declare when the soldiers died so they could still collect the allowances And equally even for the alive soldiers who were working They collected the allowances but didn't pass them all on they skimmed a bit off the top for themselves Now all of you could think about the modern-day parallels to those stories But that was in the days of the Roman Empire in my own country the uk Every century we've had corruption scandals and we had new legislation in the 16th century the 17th century The 18th century and every time there's a scandal parliament would react But it wasn't until you know 1985 the formally insider trading Was illegal in the uk and then of course we had the big beast of the the bribery act Which really has got a lot of force and it's making a huge difference in 2010 So I think I think this isn't easy. I co-chair the patchy vanguard group and we had a meeting this morning with with governments and with business leaders And you know each country is experimenting with its own mechanism each country's time to fix the problems But there is still a long way to go. I think in terms of a You know the best practice techniques and understanding how to how to apply. I think business is taking your second question I think business is is is stepping up um, yeah, we have the the patchy vanguard which has a number of multinationals signed up to adopting best practice to having clean supply chains to Making sure that they have a zero tolerance policy within their organizations where there are problems You know, there are many many well Trailed examples of bad practice in the past with one very prominent company that was Subject to much regulatory inspection after it fell into problems had a fantastic ethics guide But the board excluded the finance director from it on two occasions to give him some operating room Now you you know the tone from the top in business is absolutely key and I think actually that I would say The business leaders the world over they recognize that they know that the tone at the top is really important I'm not saying every business is perfect. That's not the case But but most responsible businesses really take this very very seriously and do put it high on their agenda internally They have got great whistle-blowing regimes. They have got zero tolerance policies They tend not to go out and talk a lot about it because there's always embarrassment when you've had to fire a senior executive or you've had to pull out of a country because there's been some problems with the The local business or something like that. But but I think there's massive change taking place in companies to You know to improve the way they do business I think the the challenge is sharing that best practice with government sharing it between companies across industry sectors And that's one of the things that we're we're doing at the patchy initiative Okay All right, vj. Let me turn to you You have an interesting idea This idea that if you actually sort of get away from a cash economy that you could go a fair way towards Biting corruption. It's something that um, I ken rogue off the economist from harvard actually just wrote a book about Which was very interesting. He made a pretty persuasive case So tell us about your business what you do and you know, if you have any metrics that support this idea, that would be great In fact, let me let me give a little bit of context about india and I think it is going to be the case for most of the developing countries Especially when there is a new developing event happening and new Licenses being assigned or new businesses are being built That is a time when there is a significant discretion available on government Birocrette or someone Whether it is that a part of policymaking or whether it is a part of assigning whom you're picking And that that that is a starting point in developing countries and that is why like we heard Even if there is a free market, there is an advantage situation if you become part of the Value creation or asset that is being created shared that way India has a layered corruption problem there On a on an extreme low level if you want to meet a bureaucrat you have to give money to appear So that you can get a ticket inside even if you have an appointment He won't tell you that this person is inside It starts at that low level like a dollar has to be given. It's it's a part of an obligation I was in kerala state, which is south southern india and we had this Ferry which was taking us from one city to other city and there was a money obligation that was to be given So that this gate can be opened Otherwise this guy will slowly open the gate So i'm talking about a dollar or a two corruption size and and then let's layer it to the middle layer where A business wants to get funding done and business wants a loan to be assigned and assets to be Created in a bank and those need to be approved I mean there are cases this is exactly where the npa's got created an Indian regulator sort of became stringent about it that Whom are you giving loans and so on so forth those restrictions came in place and finally there is a equity kind of Corruption where you share equity with some family and sworn now in all this some of those things that you're noticing here In india most of this happens in a cash way 86 percent of india's trade i mean the currency notes are the Are the businesses happening in currency notes and not not all of that gets recorded anywhere It doesn't even get reported as to the bank the money keeps circulating and this box full of cash They get put behind in a house or somewhere, but they are not even to the formal banking system So demonetization was an intention of our prime minister to attempt that if you own some you have to come and declare otherwise This is dying I And anecdotally i won't share some of the politicians who had low who had lot of such cash And it doesn't mean that only politicians had it but you know many other classes had it They quickly found an idea of lending this to the poor citizen and saying you go and deposit this money Because i'm giving you I'm giving you as a loan and you will give it back to me when the new currency note comes All the sequencing told us all the sequencing told us that The probably i mean this is an early step. So let's not say this is the final step or ultimate answer Having a trail of the money having a digital trail of the money And who is transacting this money to whom that trail of the classic block chaining the transactions and sequentially taking care of the register Is probably going to be a at least one of the dampener for these people who are taking and holding cash And that is exactly the reason that we as a paytm which is paid through mobile built a business model around Very low transaction money To a very high transaction money. So when you are on a place where you're paying let's say a 10 rupee or a 20 rupee Small shopkeeper who otherwise never opened a bank account and never ever bothered about Taking this money that he was receiving into a formal economy So digital digital was the way that we believe the mobile payment that created a trail of the money which over the period If you're doing a genuine business, there is nothing wrong about it But it it created a lot of uproar in the country because not just Corruption, which is intended to be let's say who gets an advantage in india. It's an amazing country Only five million Of 1.2 billion people Only five million people Ever filed a tax where there is one rupee given to state as a tax in a country of 1.2 billion Only five million people ever gave state one rupee of tax Which means again the digital this is like a corruption at a mass level. I mean Uh You're talking about it is not I mean, we are a god god-faring country. We are a we want good of the world But when it comes to government hold a minute that money is ours. Just just let it remain here So you can understand that's a country for a country. It is a very different way We have to come out of corruption. It is a very different way And I think digitization starts that there will be a trail and somebody can say hello knock knock Do you realize that you have to file a tax because you had a earning Or you had a earning in a way or Payments that you did can you tell me how did you get that? Yeah, so digitization We believe is a starting point or removal of it. Okay, very interesting. Kogus. I want to ask you to just comment Do you think that a cashless economy or a technology technological move to Something where you know, you're using less cash would actually go a fair way towards helping corruption Well I'll answer it in two ways Of course, we have to recognize that poor people across the world are most vulnerable For extortion because often what we know The percentage of their incomes that they need to pay. So although small amounts Are very huge. So dealing with that most definitely is a major part of the problem at the same time When when you take the the the global view The illicit flows and corrupt flows around the world Are in in other words grand corruption are really the ones that impoverish countries dramatically In in the case of my own continent Africa Today the the outflows through money laundering corruption illicit flows are seven times that of financial inflows through trade and aid into Africa Which means that the wealth stripping of Africa today Is worse Is worse than during slavery? And and that is not through petty corruption That's through grand corruption and that is through digital flows So so one one has to there realize that digital is absolutely part of the answer But at the moment the one of the risks is that a digitalization of Money flows could actually Benefit from exactly a system that is very skewed as it is at the moment and The course the optimistic part of that is that Once you start to deal with digital flows they leave digital trails and surely the same tools that make illicit flows Possible also make it possible to actually trace them But but it's a little bit as if we've created the self-driving car But somehow The car had some other major flaws such as That the the engine doesn't work properly So it can drive by itself But the engine will break down on on the highway and and I think we we need to bring there the technology and the political Will together much more. That's a that's a great point Guy I want to turn to you for a minute because in some ways all of those dovetails were the topic that You mentioned in the green room about sort of a crisis in democracy And and how that is part of the corruption Conversation, maybe you want to sound off on that a bit. Yeah before I do that if I'm here. I just respond to one point. We've been Experimenting in India with a basic income scheme where we provided thousands of people With a monthly basic income Initially paid in cash and then paid through bank accounts and now with the ar-dar and digitalization It will work much more efficiently But one of the things that we saw when we introduced the basic income and thousands of men women and children were receiving the basic income Is we found that the emancipatory value Was greater than the money value We found this very strange And one of the reasons is is that in rural india in particular and in many other parts of the world The developing world in particular Money is a scarce commodity And any scarce commodity drives up the price So the price of money In rural india the money lenders rub their hands And they can charge 50 percent 100 percent They do exactly And I remember going towards the villages towards the end of the pilot and I asked is everybody what people's views And many of the villagers said to us the people who really hate your scheme are the money lenders Now I'm very pleased about that But I mean I think there is I tend to agree with many of his perspectives now I think the point you asked me about I think is central to the the whole debate from my perspective about the corruption of capitalism Because what's been happening over the past 25 years in a nutshell is the commodification of politics. Yeah Okay, enough politics and all its aspects Now you take lobbyists Billions of dollars and pounds are spent by lobbyists to governments, right? Many of the corporations represented in davos spend millions lobbying They're not doing this for their sake of using up money Right, and it's been shown by research that the more a company spends on lobbying The lower the tax that it pays I wonder why I mean it might probably a pure coincidence Now you've got the the commodification of politics taking place through public relations companies running elections Now I'm I'm bridge, but I don't live in in the uk, but the last general election on one side The conservatives they had an australian paid millions to run the campaign And he insisted that he would determine words that were used etc And on the other side they had an american running the campaign So two mercenaries running the campaigns determining what was said And the the uh, the american didn't do as well as the australian come brexit The romaine campaign employed the australians plus an american as an expense paid them millions And the leave campaign employed some other americans to run the campaign and invent their lies that they told So when we all correctly deploy what's just happened in the u.s Presidential elections, we should look back in the mirror at what's been happening Elsewhere as well because it's the same in ukraine the same companies Yeah, the same americans and australians are involved in selling the camp the presidential candidates So you've got a commodification And that's intensified of course by the ownership of the media And the manipulation of that so I think People don't trust The elites to run politics and that's we've seen with with trump and it's a it's a central part I actually I want to share an anecdote in fact from my book which plays um directly to this point I I did a book about financialization and part of this was the problems that we've had in the u.s Re-regulating the financial system in the wake of 2008 and as part of this I did an interview and off the record an interview with a former Obama administration official who had been very intimately involved in the bailouts and um Just to your point about how deep money politics is embedded and the cognitive capture that that creates amongst the elites I noted that 93 percent this is an academic doing god's work had collected all the public meetings and who they'd been Who had been taking meetings about the regulation? 93 percent had been done with the largest banks So you have the a group of people who are going to be regulated taking most of the meetings about the regulation And and the official was insisting that you know things have been done properly and that they'd gotten done What they needed to do with the regulation I said well, how is that possible when 93 percent of the meetings have been taken with the biggest banks? And he said with true kind of surprise. Well, who else should we have spoken to? And that's sort of to your point. So with that, uh, maybe minister. I'll turn to you and ask How can we get this um this issue of money politics and so and cognitive capture out of the public sphere? How can government kind of you know take back charge? Particularly at a time when so many governments in the western world particularly or you know debt beleaguered Fighting nationalism in your own country. This is certainly an issue Well, I will try not to be a commodity for money powers By taking the floor in front of you right now I believe that the first thing is will we need to want it? We need to decide it and of course we need to implement it Of course this go through dialogue by being transparent towards various groups or towards various Corporations, but never should we depend from the arguments of corporations themselves Let me come back on another aspect about transparency given that transparency international is with us today The issue of lobbyist lobbying to me someone who wants to make sure that their interests are represented Is not a problem to me. What is a problem is when they are doing it underground without saying it out loud without people knowing it without Showing the different contacts and without politicians talking about those contacts either So in the sapin 2 law, we have implemented a transparency that already exists at the level of the european Parliament and in other countries you cannot be a lobbyist if you are not on a register If you did not give your name and as a politician We are not allowed to have contacts with someone who is not on this registry And also when it comes to transparency about the amounts of money that are invested in a lobbyist campaign For instance, we need to make sure that clarity will allow us to avoid The abuses that have been described another question Or rather it is in link with your question when it comes to the needed Technical Technicity in order to fight corruption and illicit movements. Of course, we need Techs we need laws we need institutions. We need political will but we also need the right technique adapted technique Of course the issue of cash is a very important issue I had significant debates within europe with my my german friends because cash in germany has a lot more value than in other countries So it is not easy. There are some habits And we need to restrict the use of cash now when it comes to tracking and Digital money, it doesn't solve everything, but it is very Fundamental so we need more and more transactions through digital equipment that will be declared and that will allow habilitated authorities to Notice it and of course it will facilitate the life of people as well But what we also need is international cooperation Because when we are talking about all these Electronic things they go beyond border and it goes around the world in just a few seconds You can go in three offshore places within a few seconds It will go through a trust and this trust will actually hide this transaction. So trust Transparency is absolutely needed. It's Instrumental It was the case with panama papers. Otherwise, we will not be efficient and the international cooperation is needed But cooperation is good We also need the right weapons in order to make sure that this cooperation will be respected We are working at the level of the g20 on making a blacklist of all those countries That do not accept this transpiration and retortion measures will have to be applied by all countries towards those Who do not agree to integrate this consensus, which is the minimum that we That that our electors or our people can ask to us. This is the minimum. We owe this transparency and this clarity to them Great. Thank you for that Just a couple more questions and then I'll open it up to the the group here David, I want to turn to back to you for a minute and this this issue of um Of naming and shaming and you know being unable in the business community Or you you you mentioned earlier that businesses are often unwilling to speak about corruption Even when it might be healthy to do so because You know you come out and and you're slammed. I mean, I you know, I certainly have seen post 2008 that Even CEOs who had a lot to offer and a lot to say kind of kept their heads below the parapet You know in in many of these debates What do you think could be done either legislatively or within the business community to actually create an environment where people Could feel more comfortable coming out and just saying look we had this problem We want to talk about it. Here's how we're dealing with it I mean, you know, I've had any numbers of conversations with folks say in the oil industry, you know CEOs that are coming up against Issues all the time that really, you know need to talk about these things. What do you think could be done? I I I like the way you put the the question because I think You know who are the victims of corruption? Ultimately citizens are governments are but also corporations are corporations Victims as well those who operate on a clean basis and who want to play in a competitive market in a fair and straightforward way As the minister referred to earlier, you know, they are victims as well and I can't tell you the number of conversations I've had with Business leaders where they've had to close down operations in countries where they've lost out on contracts But they've known why they've lost out and it's because somebody else is not played according to the rules and so on I think There is again No one simple answer for this. I think some of it to the public procurement. For example, I think some countries have got Online facilities where winning contracts are put online So if you win and I lose I can see why you won online and I can see the terms so I think you know digitization of contracting and and I think Shining a light on some of the practices. I think I think speak up lines within companies So the issues that people within most people who work for most companies want to see their companies do the right thing Sometimes they don't know how to elevate issues I think good speak up lines so that people can speak without fear of that coming back to haunt them later on I think that's a good thing Obviously the management of the company then have to act on that by either having a dialogue with regulators or Or or or other parties So I don't think there's any one answer But I think there are a number of techniques that you know around the world lots of countries are doing different things And that's why I come back to what I was saying earlier I think there's a lot to do and sharing best practice and just squeezing Squeezing the system to get corruption out and shining most of it shining a light on it Cobas, let me ask you a final question before you open it up since you cover Pretty much every country under the sun in your index Are there any international lessons that you want to call out any any particularly sort of best practices? That you think would be able to translate across many countries and also You know, do we unfairly blame a handful of countries and you know, maybe let others off the hook? Is there it's anything to talk about there? Well, if I start with the last part surely The this so-called north north divide That has been shown as not where the issue set Even when we had the london summit And the prime minister told the queen That is fantastically corrupt countries such as nigeria and afghanistan That gave us the opportunity to say yes, of course the prime minister is correct that these countries have a major problem But maybe he should have added to to the queen that welcome to the uk one of the great facilitators Of corrupt money in our property market. So I think that has shifted so the time of that kind of On that I think we should move beyond that and and look at where the solutions where we can work together because it is a global problem and and there I think that When the minister spoke I I very much agreed with what he said I think the next steps there similar to the issues that david raised in terms of of public procurement Is then to say how can those that are in positions of power Particularly those that work with the public purse And that has all elected officials that they have to behold To a standard where their interest and their assets has to be in the public domain I think that that is something which it is very strange When we see some of what is happening in the us at the moment in terms of conflict of interest issues and tax declarations That don't go in the public domain because it goes against what we know that transparency in the public Policy process Is not because it is only an ethical issue. It's actually critical to a sustainable business model and and and in that I think that Whatever we've seen it is when you can match good policies and laws with actually also High standards of those that hold political power To proactively declare the interest and the assets and in the issue of a public procurement We can within 2017 see the world look very differently By requiring all companies that bid for public contracts to have their beneficial owners in the public domain That's easy. It can be done. And and that's why while the issues are complex There are also solutions that can bring dramatic improvements quite in the short term and that is what I think One would like to see Particularly in critical areas such as issues of climate financing such as an infrastructure Those are ones that are really critical for the global economy. I will extend two parts here. One was distal procurement and One of the benefits that we saw and like you Are aware one of the mining contract which was declared Void by a new government and when they did a rebidding of it They got 10 times more money and that was a reverse public bidding So it was visible to everyone who's bidding what they're bidding and what is the bid that you're placing 10 times more money for significant large value transaction was amazing So I truly the digitization is a truest starting point like minister said and obviously I mean Like we know the digital trail has a beauty that it can go anywhere Like we aren't able to trace the spam or a troll and so on but it is distal There is a way to reach the end of this tunnel or the dot transaction and that is one of the starting point of this And I'll add to the next part which is we're talking a lot of public money being a part of Corruption and we're talking a lot of public and private As as if there are no corruptions and private and I want to share this and and I'm seeing a country Our country which is getting more privatized and more private companies are coming. There is an equal or more corruption In private companies when private companies are dealing with our private companies So let's be conscious about it that we do not label government We look at it as a as a corrupt people for sure in private companies The the benefits can go and there is no logical structure public government and all these people Who are in public eyes get scrutinized more often and then like like like all of us know it It starts in that sphere where you are safe and you're doing it and then you just extend that behavior in many other places Yeah, so a lot of large organizations get a problem of shareholders money being victimized assets being Compromised when there is a private corruption that it's a it's a very good point. I'm glad that you made it So I think in the last 15 minutes we'll open it up now to questions And there's microphones over here first question and if you can just introduce yourself and If there's anyone in particular that you want to address it to so my name is ajay. I'm from india I work i'm a farmer and I work with farming farmer union And I really think the historical perspective of corruption is that when 5000 years ago when agriculture started and we had priests and temples and temples and the priests told us to make offerings to the god and That's Corruption, but I think so there's two things that what you said is that tax avoidance and and cash transactions are not corruption I what you're doing is fantastic, but My question to mr. Standing is that if a government makes a policy where you have to Do digital transactions and digital transaction companies charge you a commission for it So you're forced to pay that commission and because of that digital transaction companies become billion dollar companies Is that corrupted wealth even though no corruption has been done? Because because it's of government because of government policy people are forced to pay that commission Guy do you want to and do natural resources that companies mining companies have natural resources? Do they go back to the state? Why should they be with the state? That's that's That's uh Rent seeking and that's that's exactly what needs to be stopped. Let's go ahead. Well. Well, thank you Thank you for the second part of your question. I am not sure if I can say very much about the first part I agree that if it's rent seeking behavior that is part of rentier capitalism So that those sort of things that you're talking about definitely fit as part of rent seeking capitalism The the subject I wanted to raise and i'm cheating a bit in answering your question by it Is that one of the big subjects this year which should be Really given a lot more attention Is the systematic plunder of the commons Now the commons is something of our history our public amenities our land our spaces Our minerals and whatever it belongs to us collectively and if you privatize the commons and you sell them off at a knockdown price and you give subsidies to the buyers of our commons Are you getting my point? Yes. We're with you. I think you're getting my point And that is what is happening. Yeah, and it's a big thing and this year Why i'm making a big point of this and I just hope someone goes out of the room and takes this point This year happens to be the 800th anniversary of the Charter of the Forest Which went along with the Magna Carta that came out in 1217 Not 1215 and the Charter of the Forest was the first document to say that we as society have the right to the commons A right to resist commercialization enclosure and commodification of our commons And at the moment as I found in doing research for my book I found I said the story is should go big time because it is a systematic aspect Of the corruption of rentier capitalism. So for example large parts of london are pops these days. It's an acronym that's come out privately owned public spaces Where we the public don't have a right to use those public spaces Because it's owned by a multinational corporation And they're owning more and more and making huge property price Bubbles and so on. Now this part of the commons in my view Is is something a subject that we should collectively give big attention this year because it's not been given attention Taking notes guy. I'm seeing an FTE column here Okay, but I want to get behind me here. So I don't forget this part of the room the gentleman here Thank you very much. My name is Oscar on Yema around the Nigerian Stock Exchange There are so many companies that are listed that operate at the highest standards Um, but yet operating a country that has Had this broad brush of corruption painted on it. How do you reward such companies? How do you reward? How do you reward? Does anyone want to take that on? Actually, that that's been my problem in in India We haven't we as a company haven't done business with any government organization And probably that's my reward. That's my statement that I say That who we are I can tell you that we never dealt with any government as a beneficiary ever and Somewhere if we do not reward We do not acknowledge that those who are doing good are to be respected Incidentally, we are rewarding those who are doing bad in a way Or using corruption as a mean of growth and then we are applauding them I so much appreciate this as a question and I think As a Vaff or someone we have to acknowledge Cleanest of the companies even if they're young stage if not the old and besides that's brilliant Interesting. I think it's part of the the short-term long-term thing You know part of the building trust and business over the long term. I think Most responsible companies take a long-term view of life and part of that is You know remembering that they're accountable for what they did 10 years ago and And not taking short-term decisions like operating In environments where there are corrupt practices and one of the sad bits about that is I think It means oftentimes that companies just pull out of countries and products that were previously available Aren't available anymore and the competition that that's created isn't available And I think that's a that's a challenge actually because again, I think Broadcasting that and many people know is an issue because people tend not to want to talk too much about it I wonder and I'll just follow on to your question And I don't know if this is the case in Nigeria, but I know in the u.s There there are studies that show that millennials Are just much more sensitive to this type of thing this perception if a company is doing good If it's not and that they will actually put their you know money on companies that are at least they perceive to be You know doing good for society Do you all see that as a broader international I'm going to say that we living in an information age and this information itself Is so not available while the propaganda news and maybe not so sure fake news It gets propagated a lot more often. Imagine this not being talked about how fundamentally as a society We are not bothered about those who are doing good. Yeah. No, it's a great. It's a great point Um other question back here Thank you very much. How did you not have a vision three in Switzerland? Um, listening to You serve Cobas and you're one of your predecessors Mr. German Brooks with regards to What's going on in terms of transparency all the work was done through companies and what the regulations there are about But in today's world and you said it yourself and I like to get an answer I mean when we accept the myth that the president of the united states is the leader of the free world And then we accept that we should have regulations for other people to basically go and Approve and follow and shame and name and everything else that you spoke about What the hell we're doing? I mean if the guy at the top the leader of the Free world can get away with it without I'm not saying lying since transparency is very important Is not giving the information is not telling anything and part of the transparency issue is basically conflict of interest And being transparent about all these issues. Where are we? Why should we just play this game of the rest of us do the good? And the guy at the top plays with it and gets away with it And just to follow that to follow that because it takes two to tango There is the corruptor and the corruptee And since he's the corruptee who is the corruptor would it be the 100 a million or whatever they voted this guy in I think that's Provocative I like it coas well Let me start with your last point So we've got a declaration against corruption five simple things that people can do The fifth one is to only support candidates for elective offers that demonstrate Transparency and accountability. So surely yes, there's there's responsibility To go to a step back Uh, we should not take the short term view here Uh, I would take issue as an African about uh appointing somebody as the leader of the free world And I will take issue of that on two accounts when you see the breakdown of civil liberties Across the world in many established democracies over the last couple of years including attacks on journalists I think one should be careful what you call the free world because the attack on civil liberties that we see in recent years have been dramatic secondly in terms of The taking the longer term view if Issues such as human rights social justice Transparency accountability were purely moral imperatives Then we had a huge Reason to be concerned, but they are not they are there's a business case And and that's why we have seen the business community over the last five years In many areas taking huge strides forward in terms of public and proactive accountability Because they realize this is not about just morally doing the right thing. This actually it is good for business a inward looking strategy of nepotism of secrecy in public policy making that favors the few Is a most unsustainable strategy for growth? And that is something which will arguably given the importance of the u.s. Hurt many people But ultimately that The direct effects of that will be carried by the american public because bad public policy In the u.s. Will affect the u.s. Citizen arguably dramatically more. So I think one one needs to be Here also take a a bit of a deep breath and say this is not that suddenly the world has gone belly up over time When when you look and this is what I will will finish off on on this one when you look over the last Say two years at Say the 20 most Public uprisings around the world brazil mordova south africa romania guatemala Absolutely The vast majority of them have one thing in common ordinary people saying we've had enough Of corruption we've had enough of lack of accountability and transparency of The political elected classes do I think That in the u.s. This will be different in the medium to the long term. No, I don't think so So that gives me reason for optimism Great answer All right. Well, we only have a couple of minutes left So I think what I'll do is I'll just ask all of you as a kind of a flash round Let's go around and one one action point one thing that you think that we could do, you know in the next year As people in this room as members of the global elite davos community To really help rebuild trust in ourselves and in institutions. Vijay, why don't we start with you? Everybody knows That you do you didn't like to be Identified with him. He had a very bad name. We can call atlantic city and there are a lot of examples And he goes away with it. How is it possible? Exactly what you said It's incredible. We need a whole another We have to live with it. We have to live with it now. Yeah, everybody's okay. Thank you. We all agree with that Go ahead. Yeah, so Oh, well, well amazing things happen in the world I I I'll take this a point of Uploading those who are sincere and respecting and appreciating those who are sincerely doing business Is one of the most important thing if you can't punish those who are doing bad at least applaud those who are doing good Okay, covers Two things What everybody can do Five actions look at our declaration against corruption And lastly, maybe an optimistic note. I'm South African I in my lifetime as a Adult Was in prison and didn't believe I would see the end of apartheid maybe in my lifetime It's amazing how quickly things could change when the cold war ended Apartheid was dead I also believe passionately that it's inevitable That the transparency trainers left the station and we will live in the world And whether that will take five years or ten world Where a lot of the issues that we are talking here about today will just be normal practices Because they are ultimately have the same moral and business drivers as the end of apartheid So I continue to look at it. It's an inevitable process. That's where we are going Like covers I'm an optimist because I think there are a lot despite all the problems we've seen in the world There are lots and lots of good things happening in parts of the world that had real problems and were in the vernacular basket cases 20 years ago, but who've almost eliminated corruption and have got healthy thriving economies So I think it is possible in a 10 to 20 year period to really change the dynamics in a in a in a country I think also turn at the top and leadership of organizations given what the world economic forum I think is absolutely key though, whether it's government or whether it's business or whether it's civil society organizations I think that's really important and everybody should think about what that means for their own organization Okay Just two points. I'd like to make that happen being discussed One what I found in doing this research is one of the dirty secrets of our age Is the subsidy state? The state that is grown by spending billions and billions of dollars pounds euros on subsidies to special interests And we don't have a good transparent view of how these subsidies are going And they're very regressive. We are sure about that. They don't contribute to growth They do enrich certain elites. So that's an issue that I think is is something that should get more much more exposure And the other thing we haven't mentioned surprisingly Is the revolving doors? Sure, and particularly the revolving doors between finance and politics How many goldman sacks people seem to go into top level political positions? How what's the probability 11 treasury secretaries? What is the probability that the european central bank is run by a wall street banker from the same company as the Bank of england is run by And the new secretary of the treasury in in the united states the revolving doors Some of that is I had to go to the lawyers a lot because a lot of politicians are going into the companies that are being privatized On public services being privatized and then going back into politics and then going back It's very nice business if you can get it But it's something that the corporate ethos should say we're not going to have anything to do with this Okay, and I should be much firmer on that. Okay Minister last word to you Thank you very much. I never worked for goldman sacks. I have no intention of working for goldman sacks after the next elections and actually political commitment The capacity of the elected representatives in a democracy to me It is very important to have a determination to be straight in your action And we need to give the best possible image of the general interest And of course we need to prove also that we are efficient because this is what our citizens are asking So if we are to seek one thing we all must show Determination and we must be very clear and do not It must be tolerant zero when it comes to corruption Conflict of interest or when people refuse to declare their interests or their assets But it must be it must apply to everyone citizens journalists the media Politics corporations must also Go in this direction because it is in their economic interest. We are not only talking about moral We are not talking about identifying the good and the evil. Of course moral is important But here we have moral, but we also have economic efficiency. So we must be zero tolerance when it comes to corruption Well, that's a great place to end. Thank you all to the panel and thanks everyone for a great conversation