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Corruption Perceptions Index 2004
‘Corruption robs countries of their potential, especially oil-rich countries’
by Peter Eigen, Chairman, Transparency International
Foreign Press Association, London on 20 October, 2004
“A total of 106 out of 146 countries score less than 5 against a clean score of 10, according to the Transparency international Corruption Perceptions Index, published today. Sixty countries score less than 3 out of 10, indicating rampant corruption. Corruption is perceived to be most acute in Bangladesh, Haiti, Nigeria, Chad, Myanmar, Azerbaijan and Paraguay, all of which have a score of less than 2.
“Countries with a score higher than 9, that is those with very low levels of perceived corruption, are predominantly rich countries, namely Finland, New Zealand, Denmark, Iceland, Singapore, Sweden and Switzerland. But the poorest countries, most of which are in the bottom half of the index, are in greatest need of support in fighting corruption.
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| Quote: Corruption robs countries of their potential. As the Transparency International Corruption Perceptions Index shows, oil-rich Angola, Azerbaijan, Chad, Ecuador, Indonesia, Iran, Iraq, Kazakhstan, Libya, Nigeria, Russia, Sudan, Venezuela and Yemen all have extremely low scores. In these countries, the oil sector is plagued by revenues vanishing into the pockets of western oil executives, middlemen and local officials |
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“In the Middle East and elsewhere, economies have become over-dependent on oil, and corruption is rife. The future of Iraq, whose economy is dominated by oil, depends on transparency in the oil sector. The urgent need to fund postwar reconstruction in Iraq heightens the importance of stringent transparency requirement in all procurement contracts. Without strict anti-bribery measures, the reconstruction of Iraq will be wrecked by a wasteful diversion of resources to corrupt elites.
“Looking at the oil industry worldwide, Transparency International has been urging western governments to oblige their oil companies to publish what they pay in fees, royalties and other payments to host governments and state oil companies. Access to this vital information will minimise opportunities for hiding the payment of kickbacks to secure oil tenders, a practice that has blighted the oil industry in transition and postwar economies. TI is also pushing for host governments to publish revenue in the oil sector, and for independent auditing of their accounts.
“Some governments have begun to wonder whether it is useful to provide aid to countries perceived to be corrupt – and have sought to use corruption scores to determine which countries receive aid, and which do not. Countries that are perceived as very corrupt should not be punished for starting from a high level of corruption. This would amount to penalising the people twice.
“These countries in particular need help to emerge from the corruption-poverty spiral. If a country is believed to be corrupt, but is willing to reform, this should serve as a signal to donors that investment is needed in systemic approaches to fight corruption. And if donors intend to support major development projects in corrupt countries, they should pay particular attention to corruption ‘red flags’ and make sure appropriate control processes are set up to limit graft.
“Last week, TI joined with the government of Kenya in organising a meeting on New Anti-corruption Governments: The Challenge of Delivery. Such governments, from Georgia to Indonesia, should be supported in expertise to strengthen governance in their countries. Strong political will is needed, as are some highly visible quick wins to maintain support among the electorate. However, long-term systemic reform is indispensable, as reforms can take decades to really turn the tide against corruption. It is not only the politicians and public officials who create the problem; it is also the bankers, the lawyers and the accountants, and engineers working on public contracts. The biggest single area where reform must take place is public contracting.
“If we hope to reach the Millennium Development Goal of halving the number of people living in extreme poverty by 2015, governments need to seriously tackle corruption in public contracting. With government expenditure on public contracting amounting to close to US$ 4 trillion worldwide, the amount lost to bribery is at least US$ 400 billion per year.
“Across the world, corruption in large-scale public projects is a daunting obstacle to sustainable development, tearing at the social fabric and contributing to civil unrest and conflict. It is a blow to the hopes of millions, one that results in a major loss of public funds needed for education, healthcare and poverty alleviation, both in developed and developing countries.”
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