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Report: Build Trust and Integrity, Enforce Rule of Law to Address Corruption

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The World Economic Forum has released a new report on the level of trust in the Infrastructure and Urban Development industries and its connection to addressing corruption.

Using Mexico as a case study, Building Foundations for Trust and Integrity looks at how developing trust in public-private cooperation can address corruption in Latin America. The report is part of the third phase of the Forum’s Partnering Against Corruption Initiative (PACI) project to address the needs of the Infrastructure and Urban Development industries (IU). Mexico has experienced unprecedented civic mobilization to curb corruption and has the potential to become a regional model for reform.

The report, produced in collaboration with Deloitte, explores how government, business and civil society perceive corruption and how much they trust each other when professionally engaging. In a survey, the vast majority of respondents said they perceive the public sector as extremely to moderately likely to act corruptly when engaging professionally. This coincides with a loss of trust across all stakeholders in Mexico today, compared to 5-10 years ago. The report also found a severe lack of trust in the ability of the judiciary system to implement and enforce its legal duties, which leads to a tremendous sense of impunity.

Yet the report highlights the success of the private sector, civil society and government in responding to public demands to address corruption. The new National Anti-Corruption System and national data policy provide strong evidence of reform when combined with private-sector demand to tackle unethical behaviour. Mexico’s multistakeholder approach has the potential to become a regional model for effectively reducing corruption.

The report identifies practical actions and key enablers to build trust and integrity over the long and short term. In the long term, “training and education” and “values and culture” are perceived as the most effective areas to build systemic trust and integrity. “Leading by example” has both short- and long-term effectiveness, which suggests further focus on building individual and institutional integrity. Both the public sector and private sector regard “enforcement of rule of law” as a top priority.

Technology is also considered to be a cross-cutting enabler that can expedite change, particularly in the IU sector. It has the potential to build trust and integrity with e-governance systems, open contract partnerships and open data. Approximately 80% of those surveyed responded positively when asked if technology is a key enabler for creating a culture of integrity.

Given that corruption is one of the main impediments to the stability, growth and competitiveness of economies in Latin America, in particular Mexico, the report recommends that business and government leaders should consider anti-corruption measures a key imperative.

“The central recommendation for the Infrastructure and Urban Development Industry community is to fast-track engagement with the underlying issues of corruption. This will require understanding and reshaping behavioural norms to act as an industry with the highest standards of integrity, and rebuilding trust across a diversity of stakeholders,” said Pedro Rodrigues de Almeida, Head of PACI and Member of the Executive Committee at the World Economic Forum.

Penelope Lepeudry, Project Adviser and Partner, Deloitte, Switzerland, said: “The project has shown that a multifaceted approach and continuous dialogue are critical in fighting corruption and restoring trust in business and government. Advancing the anti-corruption agenda requires strong and continuous commitment from all stakeholders to train and educate, act as role models and fight impunity.”

“Mexico has made a bold commitment to fight corruption at every level in collaboration with civil society. However, we are aware that we still face great challenges; but with every step closer to our goal, we make irreversible changes,” said Arely Gómez González, Secretary of Public Administration of Mexico.

Juan Pablo Castañón Castañón, Chairman of the Business Coordinating Council of Mexico, said: “Corruption represents the biggest obstacle to doing business and has exacerbated the crisis of trust in public institutions. It is also a market barrier that prevents small businesses from growing. Today, it is imperative that the public and private sectors unite to crusade against corruption in favour of a culture of genuine legality.”

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Finance

Post-COVID, Latin American Leaders Say their Countries Are Open for Business

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Rising food and energy prices and a migration crisis are posing significant economic and social challenges in Latin America, according to several leaders from the region speaking on a presidential panel at the World Economic Forum Annual Meeting 2022. However, they remain confident that investing in their economies will remain attractive.

“We cannot be indifferent in front of this humanitarian tragedy,” said Colombian President Ivan Duque, referring to challenges linked to Venezuelan migration to his country, which has seen close to 2 million cross the border over the past several years after fleeing economic hardship. Duque announced that Colombia would issue over 1 million temporary status cards to Venezuelan migrants.

Rising food and energy prices also pose threats to Latin American populations. President Luis Rodolfo Abinader Corona of the Dominican Republic noted that his government would soon authorize subsidies for corn to offset rising food prices and the increasing cost of poultry. The nation has already implemented fertilizer subsidies and support for wheat prices would likely follow.

While the region has experienced economic growth in recent years, the combined effects of the COVID-19 pandemic and supply chain and price shocks linked to Russia’s invasion of Ukraine have raised questions about future growth for a range of countries. Despite the challenges, many Latin American countries continue to tout their economies and to encourage foreign business for investment and “near-shoring”.

“Not red tape, but red carpet,” said President Rodrigo Chaves Robles of Costa Rica, on his nation’s readiness to welcome foreign investors. “Costa Rica is open for business. I will break all bottlenecks…. I will open all doors.”

Likewise, Dina Ercilia Boluarte, Peru’s Vice-President and Minister of Development and Social Inclusion, stressed the nation’s readiness for outside investors. “We will welcome you with a stable economy and legal guarantees.”

The focus of many Latin American nations is now on climate and environmental sustainability. In tourism-intensive nations, such as the Dominican Republic, the sector constitutes an essential part of GDP and employs 20% of the population. Diversifying beyond “sun-and-beach” tourism could ensure the sector remains resilient even in the face of intensifying climate change.

In addition, the region can accelerate investments in climate mitigation and renewable energy. Chaves said: “We’re improving our electricity grid to more renewables even though we have over-invested in the power generation with fossil fuels.” Transitioning energy sources in a time of rising prices poses serious challenges, he added, so the nation will need to proceed with its reforms in a way that balances current growth with sustainability goals.

Educational reform is another way Latin American leaders are preparing for digital and green energy transformations. Colombia recently completed training for 100,000 programmers, and Costa Rica is working to improve the efficiency of its education spending. Currently, the country spends twice as much as Viet Nam to educate students. While Viet Nam ranks eighth in students’ math scores, Costa Rica ranks near the bottom in terms of students’ maths performance.

Peru is promoting social inclusion by transforming how the state delivers social services to rural communities. One programme involves putting state services – such as vaccines, health supplies and training materials to reduce violence against women – on boats so officials can reach hard-to-access communities in dense Peruvian forests and remote villages. “We are bringing services of the state to our brothers and sisters to improve their quality of life,” Boluarte said.

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Health & Wellness

Health Leaders Stress Need for Coordinated Global Response to Tackle Pandemics

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Improved global coordination and regional capacity building will help ensure the world is better prepared for the next pandemic, said leading health experts at the World Economic Forum Annual Meeting 2022.

“We must not lose this moment of potential transformative change in building preparedness,” said Helen E. Clark, Board Chair, Partnership for Maternal, Newborn & Child Health, World Health Organization (WHO). “Unfortunately, political resolve to solve COVID is beginning to fade.”

Paul Kagame, President of Rwanda, pointed out that the COVID-19 pandemic is still raging in many countries. “To date, the African continent has fully vaccinated just 18% of its adult population.” This is mostly due to the lack of virus testing and vaccine administration capacity, he said.

“Investing in health systems and regional bodies like Africa CDC and African Medicines Agency must be a key priority. We have to act in the full expectation that there will be another pandemic.”

Bill Gates, Co-Chair of the Bill & Melinda Gates Foundation, said it was critical to identify and isolate viral outbreaks early. “Infectious disease is an exponential phenomenon and less than 2% of overall deaths occur in the first 100 days.”

“Unfortunately, much of the world’s pandemic risk resides in countries which don’t have the capacity to respond quickly and effectively,” he said. “You have to have global capacity if you are serious about pandemics.”

Peter Sands, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria, argued for the need for “multi-pathogen infrastructure and capacity”. That is, to ensure that broad public health surveillance and infrastructure are available across the infectious disease spectrum.

“We need to finish the job – and we can do that by investing intelligently in infrastructure like lab networks, community health workers, supply chains and simultaneously help countries defeat HIV, TB and malaria as well as make them safer against future pathogens,” he said.

Francis deSouza, President and CEO of Illumina, predicted that the pandemic will launch the world into what he describes as the “Era of Biology” in which human health, longevity and biology will underpin the 21st century.

“The amount of breakthrough innovations that have occurred during the pandemic period is unprecedented,” he said. On the sequencing front, for example, the price has dropped 99% over the past few years. This has enabled us to deploy sequencing around the world to over 190 countries”.

He added: “However, we are only as strong as the weakest among us, hence we need to build a global infrastructure and have a coordinated global response to the next outbreak.”

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‘New dawn’ for Europe as War in Ukraine Strengthens EU and Support for Enlargement

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The European Union surprised the world, and even itself, with the speed, scale and unity of its response to Russia’s invasion of Ukraine. This “new” Europe is ready to project both soft and hard power on the world stage, European leaders told participants at the World Economic Forum Annual Meeting 2022.

Christine Lagarde, President, European Central Bank, on the panel at the session, European Unity in a Disordered World?, said the Ukraine war has revealed how powerful Europe is collectively: “This is a new dawn for Europe.”

The war on Ukraine has also revealed weaknesses – including global supply chain vulnerabilities and over-reliance on Russian energy, she said, but Europe is addressing this and can begin to flex its muscles on the global stage. “Europe has untapped purchasing power, trading power, technology power, pension power and moral power.”

Roberta Metsola, President of the European Parliament, reinforced the point. “This is Europe’s moment,” she said. “Europe can become the global project for peace.”

Mistakes of the past will be rectified, she said. “For way too long we did not seriously consider an energy union where we can rely on each other rather than on a country that can switch us off at any time.”

Referring to the EU’s support and defence of Ukraine, she was emphatic: “This is not the time to talk about face-saving for Russia or appeasement.”

Eduard Heger, Prime Minister of Slovakia, also on the panel, said: “If Ukraine falls to Russian aggression, Slovakia is next.” He added that we must continue to provide military support as well as step up humanitarian aid. “Above all we need to give Ukrainians hope.”

“Let’s not compromise – we must remain faithful to the values of the EU – freedom, rule of law, human dignity and equal rights.”

Micheál Martin, Taoiseach of Ireland, said of Russia’s invasion of Ukraine: “The people of Europe have spoken. Enough is enough.” In response there is much stronger unanimity between member states and more support than ever to accept the accession of new members.

He continued: “We see the EU’s future in terms of the green economy and in terms of the digitalization but also in terms of enlargement.”

Mark Rutte, Prime Minister of the Netherlands, called on European member states to continue to raise their defence spending. “The NATO alliance members are inseparable, but Europe must play its part,” he said. “This will help transform Europe from a soft power to a hard power.”

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