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The Rich Harm The Poor

 InDepth News 27 May 2019

(Originally published: 11/2009) The global civil society organisation Transparency International is unrelenting in the fight against corruption world wide. One of the tools at its disposal is the annual Corruption Perceptions Index (CPI) that provides valuable information about progress made in combating an evil that continues to eat into the vitals of rich and poor countries, leaving the poorest on the verge of financial and economic ruin. OECD claims to be a global leader in the fight against corruption, taking a multidisciplinary approach to combating bribery in business via the OECD Anti-Bribery Convention, taxation, development aid, and governance in its member countries and beyond. Regional anti-corruption programmes are designed to help the OECD reach out globally to curb corruption. Jutta Wolf reports. (915 words) - By Jutta Wolf

BERLIN, Germany - The global civil society organisation Transparency International is unrelenting in the fight against corruption world wide. One of the tools at its disposal is the annual Corruption Perceptions Index (CPI) that provides valuable information about progress made in combating an evil that continues to eat into the vitals of rich and poor countries, leaving the poorest on the verge of financial and economic ruin.

Bribery, cartels and other corrupt practices undermine competition and contribute to massive loss of resources for development in all countries, especially the poorest ones. Between 1990 and 2005, more than 283 private international cartels were exposed that cost consumers around the world an estimated US $300 billion in overcharges, as documented in a recent report by Transparency International (TI).

"At a time when massive stimulus packages, fast-track disbursements of public funds and attempts to secure peace are being implemented around the world, it is essential to identify where corruption blocks good governance and accountability, in order to break its corrosive cycle," says Huguette Labelle, Chair of Transparency International (TI).

TI urges the G20 to address corruption as a substantial threat to a sustainable economic future. The group of 20 countries, comprising industrialized nations and leading developing economies, must also remain committed to gaining public support for essential reforms by making institutions and decisions about investments in infrastructure, transparent and open to civil society input, it says.

Particularly as the world economy begins to register a tentative recovery and some nations continue to wrestle with ongoing conflict and insecurity, it is clear that no region of the world is immune to the perils of corruption.

With this in view, Labelle says: "Corrupt money must not find safe haven. It is time to put an end to excuses." The rich nations' OECD's work in this area is welcome, but there must be more bilateral treaties on information exchange to fully end the secrecy regime, she said introducing TI's 2009 CPI, a measure of domestic, public sector corruption released Nov. 17.

"At the same time, companies must cease operating in renegade financial centres," she pointed out.

OECD claims to be a global leader in the fight against corruption, taking a multidisciplinary approach to combating bribery in business via the OECD Anti-Bribery Convention, taxation, development aid, and governance in its member countries and beyond. Regional anti-corruption programmes are designed to help the OECD reach out globally to curb corruption.

CPI points out that the vast majority of the countries score below five on a scale from zero (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption). The CPI measures the perceived levels of public sector corruption in a given country and is a composite index, drawing on 13 different expert and business surveys. The 2009 edition scores 180 countries, the same number as the 2008 CPI.

Referring to the plight of some of the poorest countries, the Berlin-based TI says: "Fragile, unstable states that are scarred by war and ongoing conflict linger at the bottom of the index. These are: Somalia, with a score of 1.1, Afghanistan at 1.3, Myanmar at 1.4 and Sudan tied with Iraq at 1.5. These results demonstrate that countries which are perceived as the most corrupt are also those plagued by long-standing conflicts, which have torn apart their governance infrastructure."

The Index shows that the vast majority of countries in the 2009 index are scoring below five. This makes the corruption challenge undeniable.

Highest scorers in the 2009 CPI are New Zealand at 9.4, Denmark at 9.3, Singapore and Sweden tied at 9.2 and Switzerland at 9.0. These scores reflect political stability, long-established conflict of interest regulations and solid, functioning public institutions.

Overall results in the 2009 index are of great concern because corruption continues to lurk where opacity rules, where institutions still need strengthening and where governments have not implemented anti-corruption legal frameworks.

Even industrialised countries cannot be complacent: the supply of bribery and the facilitation of corruption often involve businesses based in their countries. Financial secrecy jurisdictions, linked to many countries that top the CPI, severely undermine efforts to tackle corruption and recover stolen assets.

Pointing to the obvious that is persistently ignored, Transparency says: "When essential institutions are weak or non-existent, corruption spirals out of control and the plundering of public resources feeds insecurity and impunity. Corruption also makes normal a seeping loss of trust in the very institutions and nascent governments charged with ensuring survival and stability."

But what to do with some of the poorest countries at the bottom of the index? TI's answer is unequivocal: Those countries cannot be shut out from development efforts. Instead, all assistance should be provided in strengthening their institutions. Investors and donors are asked to be equally vigilant of their operations and as accountable for their own actions as they are in demanding transparency and accountability from beneficiary countries, maintains Transparency.

TI is convinced that globally and nationally, institutions of oversight and legal frameworks that are actually enforced, coupled with smarter, more effective regulation, will ensure lower levels of corruption. This will lead to a much needed increase of trust in public institutions, sustained economic growth and more effective development assistance.

Most importantly, it will alleviate the enormous scale of human suffering in the countries that perform most poorly in the Corruption Perceptions Index.

"Stemming corruption requires strong oversight by parliaments, a well performing judiciary, independent and properly resourced audit and anti-corruption agencies, vigorous law enforcement, transparency in public budgets, revenue and aid flows, as well as space for independent media and a vibrant civil society," says Labelle.

"The international community must find efficient ways to help war-torn countries to develop and sustain their own institutions," she adds.

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