News Americas, NEW YORK, NY, Tues. Aug. 18, 2023: The Caribbean and Latin America are known for their gorgeous tourist attractions, stunning beaches, and unfortunately, corruption. In Latin America, the OECD Development Center found that only 1 in 4 citizens trust their political leaders.
Corruption in the Caribbean isn’t any better and is nearing the bottom of the corruption perception index with Barbados’ score decreased from 76 in 2012 to 65 in 2022, the Bahamas’ score decreased from 71 to 64, and St. Lucia’s score decreased from 71 to just 55.
But, how can blockchain help with fighting corruption in the Caribbean and Latin America? Well, let’s find out!
Blockchain is more than just a tool for crypto market makers. Its key features, like immutability and decentralization, make it a pretty effective tool that promotes transparency. While this might not sound like a big deal, corrupt governments thrive on secrecy and back-room deals. This is where blockchain comes in.
Blockchain technology limits fraudulent practices due to its transparency. Blockchain is a distributed database that maintains a continuously expanding list of ordered records called blocks. These records cannot be altered or manipulated.
If a government were to incorporate blockchain into its systems, records of bids, financial transactions, and tender offers can’t be altered once they’re submitted. These also become public records, which means those actions will be open for everyone to see.
With this technology, blockchain prevents governments from inventing multi-million dollar contracts for invisible projects to cheat their country.
Digital innovation and blockchain technology can help impoverished farmers and landowners obtain their land registry information without running the risk of losing their documents. The Inter-American Development Bank formed the LAC Chain Alliance with various businesses and technology conglomerates.
The aim of the LAC is to secure proper land registries using Blockchain. It works by having the bank collect the legal and technical information needed from farmers and landowners and using that information to create proof of the land title.
Having a proper record of title deeds prevents land from being unlawfully claimed or taken away.
By implementing blockchain technology, hiring contractors and awarding government tenders becomes fair and ensures competitiveness. Having the tenderer publically post and commit to contract terms and conditions before receiving any bids removes the risk of the selection criteria being tailor-made for a specific contractor.
This means that the team behind creating and releasing tenders won’t be able to grant them to the contractor they choose. This gives every contractor eligible a fair shot at winning the bid.
This makes the entire process easier to audit because every action and decision made is recorded on the blockchain. These decisions will also be permanent and public.
To ensure that the process is fair, the records are made available to the relevant stakeholders. This process immediately tracks every transaction and thwarts any other dishonest practices that would award a contract to an organization without the necessary paperwork.
Blockchain technology enables self-sovereign identity (SSI) which allows individuals to control their digital identities. This allows people to securely store their identifiers, for example, biometric data, digital wallets, and educational certifications.
Individuals then have the option to share that information with service providers or government authorities. This ensures privacy.
This might not sound like a big deal. But having access to decentralized digital identities can empower refugees and marginalized communities by allowing them to access critical services like health care and education.
Having these SSIs will also reduce the risk of identity fraud and ensure that government benefits reach their intended recipients. It also facilitates secure voting, thus minimizing the potential for electoral corruption.
Another key way that blockchain can help the Caribbean and Latin America is by promoting access to financial services like bank accounts, home loans, and student financing. Given that 70% of the population of Latin America does not have a bank account, introducing blockchain could be revolutionary.
With blockchain technology, the digital economy of these countries could be democratized. This could reduce inequality and poverty by allowing marginalized communities to access the financial services they need. For example, marginalized communities could purchase homes or finance their education.
As mentioned previously, blockchain also enables complete transparency. This means it’s quite simple to track financial transactions and follow virtual “paper trails” when investigating fraudulent activity.
This makes it easier, and faster, to detect suspicious activities in real-time and reduce scams. Blockchain also makes it simpler to pick up on any money laundering schemes and track the flow of corrupt funds.
Blockchain technology vastly improves the efficiency and transparency of financial transactions, which makes it incredibly difficult for corruption to thrive.