David A Andelman / Forbes

April 7, 2007
 
Corruption in nearly half the world's nations is not getting much better and, indeed, in many countries is intensifying--affecting virtually every aspect of life among peoples on every continent.   

While a year ago, some 72 out of 158 nations surveyed by the international watchdog group Transparency International were classified as "corrupt," now 74 of 163 countries fall into the same category. A few, most notably India, managed to bootstrap themselves (just barely) out of the truly corrupt group, while others, particularly Iran, dug themselves more firmly into that camp.

TI has developed an index from 0 to 10 comprised of surveys of specialists, opinion leaders, business officials and human rights monitors who live, work or travel extensively in each of the countries ranked. The higher the score, the less corrupt the country. Tied for No. 1 this year, with a CPI “score” of 9.6 are Finland, Iceland and New Zealand. At the bottom, with a score of 1.8 is Haiti.

Clearly, as those who monitor the ebb and flow of corruption around the world confess, the rankings are heavily subjective, and the nature of the corruption, particularly in the most severely corrupt nations, can differ markedly. But all share one particular characteristic. "You are dealing with societies where corruption filters into everyday life," says Laurence Cockroft, a senior TI official. "Most of us don't experience [it] in our daily life. My guess is that when the TI Index drops below 5, certainly below 3, you get into a different kind of territory."

Below 5, you have 119 countries out of 163, including such nations as Italy, Greece, South Africa, Brazil and China. Below 3 on the TI scale, some 47 nations drop off, though many are very close to the line.

Corruption can take on a host of different forms. It can, and often does, involve the police and judicial systems, including questionable enforcement of business contracts and other commercial litigation. It frequently involves diversion of a percentage of funds from critical projects into the pockets of senior government officials or their families--often in systematic skimming operations. Indeed, the U.S. State Department has labelled Belarus Europe's only remaining outpost of tyranny.

Unfortunately, most of the corruption occurs in countries whose populations are least equipped to deal with the consequences--the world's most deprived nations. In Cambodia, where two-thirds of the population earns less than $2 a month and one-third earns less than $1, a "substantial portion" of the $500 million to $600 million in donor aid each year is "lost to unofficial fees, an informal system of patronage, illicit 'facilitation' payments by businesses and individuals," one Transparency official said.

Such under-the-counter payments for everything from the simplest municipal services to appointments to many of the nation's highest offices, particularly those where there is the greatest access to illicit profits, are the effective rule of law in most of the nations surveyed--especially in Africa, Central Asia, and Latin America.

In general, the most corrupt nations are those with "an extremely weak institutional setting," according to Transparency officials. In Haiti, for instance, President Jean-Bertrand Aristide fled in the face of an internal uprising and international pressure after he sought to move a number of his political allies into the highest positions within the justice system. However, a corrupt police force is still almost ubiquitous there, helping to cement the country's place alone at the top of the most corrupt list.

The former Central Asian republics of the Soviet Union are grouped near the top of the list of most-corrupt nations. The US State Department reports that "Turkmenistan has laws to combat corruption, but they are ineffective, and corruption is rampant." At the same time, nearby Tajikistan is subsisting largely on a narco economy. Another State Department report noted that "rampant illicit trafficking of Afghan opium and heroin through Tajikistan remains a serious long-term threat to Tajikistan's stability and development, fostering corruption, violent crime, HIV/AIDS and economic distortions."

Venezuela President Hugo Chavez, who repeatedly locks horns with the United States, has helped establish his country's presence on the most-corrupt roster by turning the national police force from a once professional body of crime fighters into an institution that is used largely for political issues, according to a Transparency official.

The result is a collapse of control mechanisms that is a broad feature of administrations in many of the nations on the most-corrupt list. Moreover, in Venezuela, substantial income from the nation's vast oil wealth goes directly into the pocket of the chief executive according to TI.

"That's almost like pocket money," says the TI official. "There is a large share of the income, and we are talking many millions, used in a non-controlled fashion."

Among the least corrupt nations, the United States has slipped to No 20 this year from No 17 last year, while France, Belgium, Ireland and Japan leap-frogged over the US in the rankings. The top 10--the world's least corrupt countries--has remained virtually unchanged with Finland, Iceland and New Zealand tied for the lead, followed closely by Denmark, Singapore and Sweden.

Furthermore, there does seem to have been some improvement in anti-corruption mechanisms in many nations, particularly the more developed countries. In the past year, such nations as Indonesia, China, the Philippines, Sri Lanka and Australia have ratified the United Nations Convention Against Corruption. Ironically, Japan, the 17th least corrupt country in the world, and South Korea, the 42nd least corrupt, have failed to ratify the UN document.

There is some scepticism over the recent ratification of the UN convention by Bangladesh, the world's eighth most corrupt country, though there is some hope that the recent seizure of power by a military junta may help the country turn the corner on corruption there. Some 40 business executives and public officials were seized in an anti-corruption push, while property ranging from a Hummer to three golden pheasant and some pet peacocks were seized in raids there, according to The New York Times.

One Transparency official observed that some countries like Japan have failed to ratify the convention because "that means you have sorted out your whole legal system by which you can enact all provisions of the convention," while others with more questionable records in stamping out corruption "perceive [the convention] more as a standard of [future] achievement."