Persistent corruption in low-income countries requires global action

The divide in perceived levels of corruption in rich and poor countries remains as sharp as ever, according to the 2007 Corruption Perceptions Index (CPI), released by Transparency International, the global coalition against corruption. Developed and developing countries must share responsibility for reducing corruption, in tackling both the supply and demand sides.

“Despite some gains, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure,” said Huguette Labelle, Chair of Transparency International. “Low scoring countries need to take these results seriously and act now to strengthen accountability in public institutions. But action from top scoring countries is just as important, particularly in cracking down on corrupt activity in the private sector.”

The 2007 Corruption Perceptions Index looks at perceptions of public sector corruption in 180 countries and territories and is a composite index that draws on 14 expert opinion surveys. It scores countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption.

A strong correlation between corruption and poverty continues to be evident – 40% of those scoring below three, indicating that corruption is perceived as rampant, are classified by the World Bank as low income countries. Somalia and Myanmar share the lowest score of 1.4, while Denmark has edged up to share the top score of 9.4 with perennial high-flyers Finland and New Zealand.

Scores are significantly higher in several African countries in the 2007 CPI. These include Namibia, Seychelles, South Africa and Swaziland. These results reflect the positive progress of anti-corruption efforts in Africa and show that genuine political will and reform can lower perceived levels of corruption.

Other countries with a significant improvement include Costa Rica, Croatia, Cuba, Czech Republic, Dominica, Italy, FYR Macedonia, Romania and Suriname. Countries with a significant worsening in perceived levels of corruption in 2007 include Austria, Bahrain, Belize, Bhutan, Jordan, Laos, Macao, Malta, Mauritius, Oman, Papua New Guinea and Thailand.

The concentration of gainers in South East and Eastern Europe testifies to the galvanising effect of the European Union accession process on the fight against corruption.

At the same time, deeply troubled states such as Afghanistan, Iraq, Myanmar, Somalia, and Sudan remain at the very bottom of the index.

“Countries torn apart by conflict pay a huge toll in their capacity to govern. With public institutions crippled or non-existent, mercenary individuals help themselves to public resources and corruption thrives,” said Labelle.

The poorest countries suffer most under the yoke of corruption. And it is ultimately their responsibility to tackle the problem. Low scores in the CPI indicate that public institutions are heavily compromised. The first order of business is to improve transparency in financial management, from revenue collection to expenditure, as well as strengthening oversight and putting an end to the impunity of corrupt officials.

An independent and professional judicial system is critical to ending impunity and enforcing the impartial rule of law, to promoting public, donor and investor confidence. If courts cannot be relied upon to pursue corrupt officials or to assist in tracing and returning illicit wealth, progress against corruption is unlikely.

The top scores of wealthy countries and territories, largely in Europe, East Asia and North America, reflect their relatively clean public sectors, enabled by political stability, well-established conflict of interest and freedom of information regulations and a civil society free to exercise oversight.

But corruption by high-level public officials in poor countries has an international dimension that implicates the CPI’s top scorers. Bribe money often stems from multinationals based in the world’s richest countries. It can no longer be acceptable for these companies to regard bribery in export markets as a legitimate business strategy.

In addition, global financial centres play a pivotal role in allowing corrupt officials to move, hide and invest their illicitly gained wealth. Offshore financing, for example, played a crucial role in the looting of millions from developing countries such as Nigeria and the Philippines, facilitating the misdeeds of corrupt leaders and impoverishing those they governed.

In many cases, asset tracing and recovery are hindered by the laundering of funds through offshore banks in jurisdictions where banking secrecy remains the norm. Through the landmark United Nations Convention against Corruption (UNCAC), priority should be given to improving international cooperation and mutual legal assistance, expediting action to recover assets, and developing legal and technical expertise in nations requesting the return of looted assets.

Wealthy countries must regulate their financial centres more strictly. Focusing on the roles of trusts, demanding knowledge of beneficial ownership and strengthening anti-money laundering provisions are just a few of the ways that rich governments can tackle the facilitators of corruption.