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From the October 2001 issue of World Press Review

A Crisis of Corruption

Jim Lobe, Inter Press Service (international news agency), Rome, Italy, June 27, 2001.

Bangladesh, Nigeria, Uganda, and Indonesia are seen by international banks, risk analysts, and businesspeople as the most corrupt countries among some 91 nations that attract foreign investment, according to the latest annual index released by the Berlin-based organization Transparency International (TI).

The corruption-fighting group said that Finland, Denmark, New Zealand, Iceland, and Singapore were rated as the least corrupt by the same respondents, according to TI’s 2001 Corruption Perceptions Index (CPI). The United States ranked 16th along with Israel and just above Chile and Ireland. This year’s edition, which is based on 14 international surveys, measures the degree to which corruption is perceived to exist among public officials and politicians.

While major advances in forging new multilateral anticorruption accords and in making public officials accountable for their self-dealing were achieved over the past year, this year’s index showed that there is a “worldwide corruption crisis,” according to Peter Eigen, TI’s chairman. “Corruption levels are perceived to be as high as ever in both the developed and developing worlds,” he said.

Indeed, of the 91 countries rated in this year’s index, 56 scored 5.0 or below. In the six years it has been published, the CPI has gained a strong following among bankers and ratings agencies that advise investors. “Their judgments influence the flows of vitally needed private capital to developing countries,” according to TI’s vice chairman, Frank Vogl, who released the report in Washington, D.C. “With very few exceptions, international capital will not go to countries that are seen to be hotbeds of corruption,” he noted.

China, which ranked 57th in this year’s index and has attracted more foreign direct investment (FDI) than any other developing country by far during the past decade, was one of the notable exceptions, according to Vogl.

He also stressed that the traffic in small arms is particularly corrupt, as suggested by the ongoing investigation of former Argentine President Carlos Menem, the media sting of senior Indian Defense Ministry officials, and the pending prosecution of former Peruvian spymaster Vladimiro Montesinos. “We estimate that a very high proportion of small-arms deals in the world are the results of bribes,” he said.

Vogl stressed that the index should be used cautiously for several reasons. More than 100 countries, including some like Angola and Morocco, which attract substantial foreign investment, were not rated this year. TI included countries on the index only if they appeared in at least three independent surveys by reputable agencies over the past three years. Among the source surveys on which the index is based are those conducted by the World Bank, the World Economic Forum, the Economist Intelligence Unit, and PricewaterhouseCoopers.

Overall, according to Vogl, the survey is weighted toward the perceptions of international businesspeople. He conceded that TI’s own index, because it receives broad media coverage, may affect the surveys upon which it bases its own report. In addition, because the surveys used in the report were taken over a three-year period, major advances or backsliding by some countries in fighting corruption during the past year would not necessarily be reflected in this year’s index.

Nonetheless, there were some significant changes in the scores and rankings in this year’s index compared to the 2000 CPI. Israel, Italy, Colombia, and Egypt all made impressive gains in both categories in the new index, while Bolivia, Costa Rica, Germany, Norway, Greece, and Malawi all posted steep losses.

Finally, different surveys sometimes produced remarkably different results for the same countries. Pakistan, for example, was given scores as low as 0.8 in one survey and as high as 4.2 in another, while Russia’s scores ranged from 0.3 to 4.2. TI gave them both weighted scores of 2.3, placing them in a tie with Ecuador for the 79th spot on the index.

Zimbabwe, with a 1.6 to 4.7 difference in scores derived from various sources, fell into a similar category. Vogl suggested the lower scores reflected the results of more recent surveys since the country fell into economic crisis. Zimbabwe received a 2.9 score in the 2001 CPI, tying with Senegal, the Philippines, and Guatemala for the 65th ranking.

Broken down regionally, Western Europe received the best scores, with only Greece and Turkey scoring below 5.0.


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