Here's yet another danger from the global economic crisis. It could breed more corruption, as recession-starved officials increasingly demand bribes and hungry companies compete for shrinking resources.
Yet few words were dedicated to fighting graft at the World Economic Forum of business and political decision-makers last week. Instead, new financial rules, the US stimulus plan and trade barriers dominated speeches and small talk.
"Corruption is a real cancer," Kofi Annan, former U.N. secretary-general, said in a private meeting Saturday. "It deprives the poor from benefiting from some business activities or assistance," and drains enormous amounts of money from the legitimate economy, he added.
Annan urged rich world companies to pressure each other more to clean up — by posting internal audits on their Web sites, for example.
"There's a tendency to say that corruption is in the third world. But it takes two to tango," he said. "The receiver is often from the south and the briber is often from the north."
Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development, warned that governments and businesses should be especially vigilant against corruption amid the crisis.
"It becomes particularly relevant at a time when countries are scraping the bottom of the barrel to make ends meet," he said, suggesting that governments made poorer by recession are more likely to demand bribes for lucrative contracts.
He also urged a crackdown on tax havens — something a few political leaders have demanded amid the crisis but that barely came up at Davos. Host country Switzerland is itself often seen as a tax haven.
Both Annan and Gurria touted international programs aimed at fighting corruption, but acknowledged that none has the power to jail officials or executives who skirt rules.
"Of course, we don't have an army to go out and enforce," Gurria said.
Peer pressure, he said, can be the most effective tool in getting big companies to clean up and level the playing field.
"There's an ethical dimension, and a moral dimension, but there's also a business dimension," he said. If you want others to play fair, he said, you have to play fair, too.
One program, the Partnering Against Corruption Initiative, includes 129 major world corporations who agree to conduct yearly self-evaluations of their practices. The group has kicked out some companies who didn't meet its clean conduct standards.
David Seaton, group president of engineering and construction giant Fluor Corp., called the initiative "a moral compass" in a competitive global marketplace.
He said Fluor refuses to deal with some national oil companies because of their questionable practices and has pulled out of countries where it felt corruption was too rife. He would not name the companies or countries.
Individual countries have passed measures such as the US Foreign Corrupt Practices Act, aimed at punishing American companies who offer bribes even if it is outside the US
Some American companies complain the measure puts them at a disadvantage in foreign markets against businesses from other countries that are not held to the same rules. So those at Saturday's meeting urged more governments follow that path.
They shied away from estimating how much bribe money has been thwarted by international anti-corruption programs started in recent years — if any.
"If you save 10 per cent that's quite a bit of money going back into communities," Seaton said.
Annan himself had trouble fighting corruption within the United Nations.
Under his watch, the world body faced several bribery scandals involving U.N. purchasing officials. Serious flaws in UN. purchasing operations were exposed in the probe into the $64 billion oil-for-food program in Iraq. The former head of the program, Benon Sevan, a Cypriot national, was indicted in New York in January 2007 on charges of bribery and conspiracy to commit fraud.