CORRUPTION PERCEPTIONS INDEX 2008
AN ANALYSIS AND SUGGESTED FRAMEWORK
PROF. DR. KHAWAJA AMJAD SAEED
Research Analyst, PAGE
Nov 10 - 16, 2008
TRANSPARENCY INTERNATIONAL (TI)
Transparency International Secretariat is located in Berlin, Germany. TI was founded in 1993. It is a civil organization leading the fight against Corruption globally. It has several chapters throughout the world. Lot of information about TI can be accessed from website: www.transparancy.org In September 2008, Corruption Perceptions Index (CPI) 2008 was released relating to 180 countries.
Every country in the world has anti corruption laws, regulations, rules and institutions. Despite these, corruption exists in every country with varying degree. TI is funded by various governmental agencies, international foundations and corporations.
CORRUPTION & CPIs
Corruption is rampant throughout the world. The scope extends to developed and developing countries. The magnitude of corruption, however, varies form country to country. Empirical research shows that basically there are two causes of corruption namely: need and greed. Recently lust for money has added fuel to fire of corruption.
Whereas needs can be met by reviewing pay packages, no package can take care of the greed and lust which have no end. Perception of those who are corrupt is very different. They think that the amount they receive as graft does not fall within the domain of "corruption". They consider the receipts from corruption as their own legal entitlement. Consequently their appetite to collect money though corrupt practices continues to be increasing to their personal benefits and to the detriment of the society resulting in social destabilization. Further moral deterioration continues and the image of the country at home and abroad and consequently continues to be tarnished.
By and large, most of the ruling governments, backed up by bureaucracy and its other constituents, continue to harp on the theme that there is no corruption and if it all exists, it is an international issue. In the above backdrop, Transparency International (TI) launched the first Corruption Perceptions Index (CPI) in 1995. Subsequently TI has continued to release CPI on annual basis. The latest one released by TI is CPI 2008.
CORRUPTION PERCEPTIONS INDEX (CPI)
CPI is a composite index that draws a multiple expert opinion surveys that consists of poll perceptions of perception of section corruption. CPI 2008 covers 180 countries. It scores countries on a scale from zero to ten. Zero indicates the highest level of perceived corruption and ten indicates the lowest level of perceived corruption.
Downloaded material from web states that a CPI 2008 score relates to perceptions of the degree of corruption as seen by business people, academic and risk analysts and ranges between ten (highly clean) and zero (highly corrupt). A total of several surveys were used from independent institutions and at least three surveys were required for a county to be included in the CPI. In this respect, a survey used refers to the number of surveys that assessed country's performance. In the above CPIs index 180 countries were included in the CPI 2008 score. Using CPI which is a poll of polls, the minimum number of surveys carried out were three and the maximum were ten. In the year 2001, the survey was restricted to 91 countries and in 2002, this number was 102. This number was 133 in the year 2003. In 2006 total number of countries covered was 163. In 2008 the total number of countries covered was 180 Research Methodology included using a rating scale from 0 to 10. The higher the scale, the lesser is the perception about corruption. Inversely the lower the scale, the higher is the perception about the level of corruption. Based on research of the data released by TI, our major findings are as under:
1. Denmark was the least corrupt country in the world. It obtained 9.3 out of 10.
2. There were six countries which included nine or above nine out of ten. These included: Denmark, Sweden, New Zealand, Singapore, Finland and Switzerland.
3. One hundred and forty seven (147) countries out of 180 obtained a score of less than 5.9.
4. Twenty nine (29) countries obtained less than three out of ten and were consequently in higher corrupt nation bracket. Unfortunately this number has registered an increase based on CPI-2008.
5. Three countries namely, Iraq, Myanmar Somalia were declared to have the highest CPI in 2008 with 1.30 for the above two and 1.00 for Somalia.
The following frequency table, presenting a comparison of CPI 2001, CPI 2002, CPI 2003 and 2006 compared to CPI 2008 has been prepared:
TABLE NO. 1 CPI 2001, CPI 2002, CPI 2003 and CPI 2006 Compared to CPI 2008 Group CPI 2008 CPI 2006 CPI 2003 CPI 2002 CPI 2001 8.0-9.7 12 16 15 14 13 6.0-7.9 21 17 13 13 13 4.0-5.9 32 25 25 22 20 2.0-3.9 86 92 68 46 41 1.3-1.9 29 13 12 07 04 Total 180 163 133 102 91 Source: Computed from data downloaded from: www.transparency.org
The calculated mean for 2008 is 4.02 and Pakistan's CPI is 2.50 out of 10.00.
6. Out of total of 180 countries, the following table gives the position of 24 countries in four blocks. The data given below indicate categories of counties where the corruption is the least, is moderate, is highly moderate and is the highest. These blocks have been prepared by us to reflect four major segments relating to corruption levels.
TABLE NO. 2 THE LEAST, MODERATELY HIGH, MODERATE AND THE HIGHEST CORRUPT COUNTRIES COUNTY SCALE (MAXIMUM 10) BLOCK - 1 1.Denmark, Sweden and New Zealand 9.3 2. Singapore 9.2 3. Finland and Switzerland 9.0 4. Iceland and Netherlands 8.9 5. Australia and Canada 8.7 6. Luxemburg 8.3 BLOCK - II 1. Botswana 5.8 2. Puerto Rico 5.8 3. Malta 5.8 4. Taiwan 5.7 5. South Korea 5.6 6. Mauritius 5.5 BLOCK-III 1. Algeria 3.2 2. Bosnia & Herzegovina 3.2 3. Sri Lanka 3.2 4. Lesotho 3.2 5. Gabon 3.1 6. Mali 3.1 BLOCK IV 1. Pakistan, Comoros, Ukraine 2.5 2. Paraguay, Liberia, Tonga 2.4 3. Yemen, Cameroon, Iran, Philippines 2.3 4. Kazakhstan, Timor 2.2 5. Syria, Bangladesh, Russia and Kenya 2.1 6. Laos, Ecuador, Papue New Guinea, Tajikistan, Central African Republic, Cote, d'Ivoire and Belarus. 2.0 Source: Computed from data downloaded from: www.transparency.org
CPI for the year 1999 ranked Pakistan as No. 3 in the lowest part of table- a highly corrupt nation by TI's CPI 1999 index. The situation marginally improved as TI's CPI 2000 ranked Pakistan as No. 5. The situation further improved to rank 12 based on TI's CPI for 2001. The situation greatly improved in TI's CPI for 2002 when Pakistan was ranked as 77. Based on data released by TI through their Corruption Perceptions Index (CPI) 2006, Pakistan Ranked 147 out of 163 with 2.2 score against mean of 4.23 out of 10 for 2006. In CPI 2008, Pakistan ranked as 134 out of 180 countries with a mean of 2.5 out of 10.00. This is a wake up call for all of us.
Seven (7) surveys were used. Pakistan still is below the average and have the challenge to go a long way to reduce the extent of corruption. Our approach should to steadily move towards lesser corruption. All the stakeholders must contribute towards lesser corruption with passage of time. All the stakeholders must contribute towards the noble cause of reducing corruption through transparency, moral rearmament, contentment and enforcement of law through a crack down to nab the corrupt segments irrespective of their status. The job should be initiated on priority basis and all institutions including National Accountability Bureau and high level courts should play their productive role to uproot the corruption. The earlier this is done, the better.
Based on recommendations of TI and our view points, some suggestions for anti corruption for implementation are as under:
1. Promotion and, where necessary, adoption of corruption-specific codes of conduct by professional associations for their members, for instance the International Bar Association, International Compliance Association, and professional associations for accountants;
2. Professional training to ensure that honest intermediaries better understands their role;
3. Legal or professional sanctions for legal, financial and accounting professionals that enable to reduce corruption;
4. Greater scrutiny of the role of insufficiently transparent financial centres in facilitating corrupt transactions.