WASHINGTON – International Monetary Fund Managing Director Christine Lagarde on Monday praised China’s anti-corruption campaign, which President Xi Jinping pushed for nearly five years ago.
“I think China, when you look at what’s happened, I would say, in the last three to four years, has made some serious improvement in relation to corruption, and not only has affirmed the principle of fighting corruption but has taken quite a lot of action against quite a lot of people,” Lagarde said at the Brookings Institution.
Xi in late 2012 vowed to root out both “tigers and flies,” meaning everyone from the republic’s top leaders to government officials low on the totem pole. The Central Commission for Discipline Inspection, the Communist Party’s corruption watchdog, reported earlier this year that it had punished more than 200,000 individuals charged with corruption activities. The commission reported that it had received 1.3 million complaints, opened 260,000 cases and punished 210,000 people for “breaking the code of conduct.”
According to Al Jazeera, those charged included 38 high-ranking officials from ministries and provincial administrations and about a thousand prefecture officials. Among those being prosecuted was Yao Gang, former vice chairman of China’s securities regulator, who was accused of taking bribes. Party opponents have criticized Xi’s campaign as a political witch hunt used to eliminate political foes.
“The expression goes ‘from tigers to flies,’ and we have seen a few tigers and quite a few flies suffer from that internal campaign that is conducted domestically with political authority,” Lagarde said during a discussion on global anti-corruption efforts. “That’s an area where there’s progress. (Has IMF) had anything to do with it? I doubt it. Is it of macro-critical dimension? I’m not sure that it is, but it is certainly a move in the right direction by the Chinese authorities.”
Lagarde, who served as French finance minister from June 2007 to July 2011, was re-appointed to a second five-year term as IMF managing director in July 2016. The IMF is a UN organization with the stated goal of promoting global financial cooperation and stability. Lagarde, who also served as French minister of state for foreign trade, claimed during her opening remarks that the annual cost of bribery is estimated between $1.5 trillion and $2 trillion, or about 2 percent of global GDP. That’s not including the costs of embezzlement, nepotism and terrorism financing.
Lagarde called the cost of bribery only the tip of the iceberg when considering long-term impacts of political corruption. She said that institutional corruption poisons trust in government and kills the motivation of young people serving that nation, arguing that millennials feel the impacts of corruption “more acutely.” She cited a recent IMF survey showing that young people from all over the world regard corruption “as the most pressing concern in their respective countries.”
Lagarde also described progress in Ukraine, where the IMF has entered into a $17.5 billion aid agreement. The financial support is tied to a government reform program that was implemented in the aftermath of Ukraine’s 2014-15 financial crisis. She noted that the program has led to a series of significant reforms, including a national anti-corruption bureau.
“These reforms are only first steps,” she said. “Investigators need increased authority to pursue suspected criminals, and prosecutors must be empowered to bring charges in an anti-corruption court. The Ukrainian situation underscores our broader challenge: To make a lasting difference, international organizations, civil society and political leaders must work in concert. And we must be realistic about how quickly progress will be made. Cultures and habits, good or bad, are not changed overnight.”
She said that it can take decades to reverse bad behavior.