The World Economic Forum (WEF) is working with the Colombian government to see if transparency based on the Ethereum blockchain can help in the fight against corruption. This occurs in the process of bidding for high-value contracts to provide public goods and services.
WEF partnered with the Inter-American Development Bank (IDB) and the Colombian Attorney General’s Office to develop a proof of concept (PoC) using the Bitcoin Storm public blockchain to overcome corruption.
The aim of the project is to apply a high level of transparency to the use of corruption in the context of the country’s public procurement system. The PoC will be tested in a live auction for the procurement of goods and services provided to the national university of Colombia later this year.
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Public procurement invites corruption because it involves close and repeated interaction between: government officials, the private sector and large sums of money. Therefore, the alliance of the Colombian government with the WEF allows for the solidification of an anti-corruption project.
According to the Organisation for Economic Co-operation and Development (OECD) Governments collectively spend approximately $9.5 trillion on public contracts worldwide, and up to 30% of that amount is lost to corruption.
Originally, we were very open about which division of the IG (Colombia’s Office of the Inspector General) we would work with directly, said Sheila Warren, the WEF’s head of policy and data blockchain.
She also commented that: „Most of the feedback we got from the country after the workshops we held there was that procurement would be the most conducive system to having blockchain within it.
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Today, most countries operate electronic procurement platforms. So the process of making bids for building roads or schools, followed by the registration of suppliers to bid these contracts is digital. It also usually involves some level of encryption, so the auction process is blinded to avoid collusion.
In this sense, the most conclusive advantage is the addition of a shared and immutable set of records. These cannot be censored or altered. Not even by someone in government, said Ashley Lannquist, leader of the WEF project for blockchain and digital currency.
„I think the most valuable proposition is that you can have great confidence that you are not removing records, or denying bids from suppliers. This came out as a key added value and, of course, is what you get most from blockchains without permission like Ethereum,“ Lannquist said.
There were also other benefits based on blockchain, Lannquist said. Such as the automation and timing of the periods in which bids would be evaluated and also the periods in which public comments would be made.