IMF backs Short call for corruption crackdown

Businessmen caught bribing foreign government officials to secure a deal will risk going to prison in future, Clare Short has told the annual meeting of the IMF and World Bank.

The Secretary of State for International Development's comments reflected one of the main themes of the gathering of finance ministers and central bankers following the publication of an IMF-World Bank report on the economic damage caused by corruption.

She welcomed the agreement by the rich OECD countries to end tax deductibility for bribes made in the course of doing business overseas and to make illegal the bribery of public officials abroad. Although this is already a criminal offence in the UK, Ms Short said: "As far as I know no one has ever been charged with it. We will need to be more vigilant."

She emphasised that corruption involved two parties, the giver as well as the recipient of the bribe. "There is a strong new consensus that corruption damages development. And there is no longer the perception that corruption is something on which rich countries can lecture poor ones."

Ms Short was addressing the delegates in her capacity as the UK's World Bank governor for the first time yesterday. The Bank's development committee put the importance of the struggle against corruption at the top of its communique.

Ms Short said there had been strong support for this, although China and India had raised the difficulty of distinguishing corruption from differences between countries in business practices. She said: "There is always a question of how proven it can be. But if we all take it more seriously it will be a massive advance."

The communique began: "Ministers agreed that corruption and weak governance undermine macroeconomic stability, private sector activity and sustainable development objectives."

Britain's emphasis on openness and transparency in economic policy won another unexpected success when a key IMF committee agreed with Gordon Brown's suggestion that the Fund should consider drawing up a code of good practice on openness for all member countries.