Updated 3 weeks, 3 days ago

Corruption, a heavy weight pulling down Latin America’s Economy

Corruption has been identified as the world’s biggest obstacle to economic and social development; In Latin America, a region with some of the most corrupt countries in the world, this problem is costing around USD 124.920.00 million annually; According to the Global Financial Integrity group this amount represents the 3% of the region’s GDP.

Transparency International, published a Corruption Perception Index (CPI) where in a scale of 0 to 100, 0 representing the largest corruption perception, Latin America scored 38 points as an average rate. Venezuela scored the highest amount with alarming 17 points while Paraguay scored the second highest amount with 27 points. Uruguay and Chile stand out as the less corrupt countries with 74 and 70 points, respectively.

Corruption in Latin America has a long and large history. Just last year, the Petrobras scandal exploited in what has been called as “one of the most astonishing corruption schemes ever to be uncovered”; In the scandal, many politicians and business leaders have been incriminated all around Latin America: Michel Temer, Dilma Rousseff and Luiz Inácio Lula da Silva in Brazil, Peru’s ex-president Alejandro Toledo, Colombia’s president Juan Manuel Santos and Panama’s ex-president Ricardo Martinelli, to name some. In consequence, the three preeminent economies in the region (Brazil,Mexico and Argentina’s) are stuck in the middle zone of the CPI.

But effects of corruption run deeper; High levels of corruption cause lower acceptance of established institutions, income inequality, deficient court systems, low quality of public infrastructure, education and health. As a result, Latin American countries are less competitive in the global economy and their economic growth perspectives are very reduce. Economies in Latin America are expected to grow as little as 1% per year in some countries, which means that they are not in position to benefit from modern economy and their incentives to invest in research,development or innovative projects will remain limited.

Even though, the recent tsunami of corruption has caused a lot of damage, it has also been a wake-up call, seems that a wave of anti-corruption is sweeping across Latin America; People are rejecting corruption with more veracity. However, to address this problem, it’s necessary to transform how the public sector operates but it’s even more essential to change the whole society’s attitudes and mentalities; only by eradicating its endemic corruption problem, Latin America could stay competitive in the global marketplace.