Flawed CPI?

As usual, the recent Transparency International’s report has caused quite a stir in the country as the loss of three points in TI’s Corruption Perception Index (CPI) has slipped Pakistan further down to the 140th position out of 180 countries, whereas the country was placed at the 124th position the previous year. Be that as it may, it is important to note that the Corruption Perception Index (CPI) and Global Corruption Country Ranking Report, published each year by Transparency international (TI), has been optimally used by opposition parties as an ammunition against the incumbent government ever since it came to power following the 2018 general elections.

The political heat and media hype generated this time out by the TI report 2021 has brought forth a slew of denials, accusations, questions and suspicions, notably in relation to the following:

1. The credentials and fairness of the TI report; and

2. The object of the TI report in terms of enforcement of reforms with tangible results on ground.

Based on a brief analysis conducted on the strength of the available data, one can safely deduce the following:

a) The data used by TI for CPI is selective;

b) TI scope appears to be limited to publication of the report and not its enforcement; and

c) The criteria considered by TI point more towards lack of enforcement by the judicial, investigative, regulatory and bureaucratic institutions of the country leading to Pakistan slide to 140 ranking.

The data source used by TI to compile the CPI specifically cover the manifestations of public sector corruption, notably: bribery, diversion of public funds, officials using their public office for private gains without facing consequences, ability of governments to contain corruption in the public sector, excessive red tape in the public sector which may increase opportunities for corruption, nepotistic appointments in the civil service, laws ensuring that public officials must disclose their finances and potential conflicts of interest, legal protection for people who report cases of bribery and corruption, state capture by narrow vested interests, access to information on public affairs/government activities. All these criteria are country specific and the one committing these is classified as a ‘perpetrator’.

But certain types of corruption such as money-laundering or foreign bribery are not measured in the CPI. This could relate to foreign countries providing safe havens to park and make use of the ill-gotten money. These countries can be termed ‘abettors’.

In the court of law both the perpetrator and abettor are severely and jointly held responsible for the crime. This is where the fault-line lies in the criteria applied by TI in its country ranking. It’s selective and not inclusive. In case it is made inclusive the country’s ranking will be dramatically changed.

Transparency International (TI) is a German non-profit and non-government (NGO) legal entity founded in 1993 with the mandate to take action to combat global corruption with civil societal anti-corruption measures and to prevent criminal activities arising from corruption. Its most notable publications include the Global Corruption Barometer and the Corruption Perceptions Index (CPI).

The primary role of TI prima facie appears to be limited to the yearly publication of CPI. Any mechanism of enforcement for prevention of corruption by TI is not visible. Lack of enforcement to prevent corruption in Pakistan has reached a level where perpetrators, regulators and abettors all form one queue as a fraternity.

It is the collective responsibility of country’s legislators, on both side of the aisle, to correct this dangerous trend without any further loss of time. Moreover, Transparency International is expected to expand its criteria in order to identify abettors as well.

The earlier exposure of Wikileaks and the recent exposure of the Panama Papers clearly explain how the ill-gotten money is siphoned out of the economies of the poor countries into the economy of developed nations via the so-called safe haven channels provided by them to make the poor poorer and the rich richer.

(The writer is a former President, Overseas Investors Chamber of Commerce and Industry)

Copyright Business Recorder, 2022