CONSTITUENTS:This piece presents an introduction to Transparency International and Corruption Perceptions Index (CPI) for 2009, an analysis of the CPI, based on frequency tables selected categories namely, the least corrupt, moderately corrupt, moderately-high corrupt and the highest corrupt countries. Later, Pakistan's position of CPI 2009 has been picked up by us, together with various suggestions, to be favourably considered by all the stakeholders.
TRANSPARENCY INTERNATIONAL (TI)Transparency International Secretariat is located in Berlin, Germany. TI was founded in 1993. It is a civil organisation leading the fight against Corruption globally. It has several chapters located throughout the world. A lot of information about TI can be accessed from the website: www.transparency.org.
In November 2009, the Corruption Perceptions Index (CPI) 2009 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 degrees. TI is funded by various governmental agencies, international foundations and corporations.
CORRUPTION AND CPIS Corruption is rampant throughout the world. The scope extends to developed and developing countries. The magnitude of corruption, however, varies from 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 the 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 upper end. The 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 increase for their personal benefit, and to the detriment of the society, resulting in social destabilisation. Further, moral deterioration continues and the image of the country, at home and abroad, consequently continues to be tarnished.
By and large, most of the ruling governments, backed by the 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 an annual basis. The latest one released by TI is CPI 2009.
CORRUPTION PERCEPTIONS INDEX (CPI) CPI is a composite index that draws a multiple expert opinion survey that consists of poll perceptions of perceptions of corruption. CPI 2009 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.
CPIS 2009 Downloaded material from the web states that a CPI 2009 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 country to be included in the CPI. In this respect, a survey used refers to the number of surveys that assessed the country's performance. In the above CPIs index, 180 countries were included in the CPI 2009 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 the total number of countries covered was 163. In 2009, 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. New Zealand was the least corrupt country in the world. It obtained 9.4 out of 10.
2. There were five countries, which included nine or above nine out of ten. These included: New Zealand, Denmark, Singapore, Sweden, and Switzerland.
3. Sixty Six (66) countries, out of 180, obtained a score of less than 5.9.
4. Ninety Two (92) countries obtained less than two out of ten and were consequently in the higher corrupt nation bracket. Unfortunately, this number has registered an increase based on the CPI-2009.
5. Three countries namely, Myanmar Afghanistan and Somalia were declared to have the highest CPI in 2009, with 1.4, 1.3 and 1.00 respectively. The following frequency table, presenting a comparison of CPI 2001, CPI 2002, CPI 2003, CPI 2006 and CPI 2008 compared to CPI 2009, has been prepared: The calculated average for 2009 is 4.02 and Pakistan's CPI is 2.40 out of 10.00.
Table No 1 CPI 2001, CPI 2002, CPI 2003, CPI 2006 and CPI 2008 Compared to CPI 2009.
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Group CPI 2009 CPI 2008 CPI 2006 CPI 2003 CPI 2002 CPI 2001
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8.0-9.7 14* 12 16 15 14 13
6.0-7.9 20 21 17 13 13 13
4.0-5.9 32 32 25 25 22 20
2.0-3.9 92 86 92 68 46 41
1.3-1.9 22 29 13 12 07 04
Total 180 180 163 133 102 91
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The highest grade is 9.4 out of 10.0 Source: Computed from data downloaded from: www.transparency.org
The calculated average for 2009 is 4.02 and Pakistan's CPI is 2.40 out of 10.00.
The range is 8.3 which is 51% of average. This shows a high degree of heterogeneity on a global basis.
6. Out of a total of 180 countries, the following table gives the position of 30 countries in four blocks. The data given below indicates categories of counties where the corruption is the least, is moderate, is moderately high and is the highest. These blocks have been prepared by us to reflect four major segments relating to corruption levels on a global basis.
TABLE NO.2 The Least, corrupt moderately corrupt, moderately highly corrupt and the highest Corrupt Countries.
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Block - 1: The least corrupt countries
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County Scale
(Maximum 10)
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1.New Zealand 9.4
2. Denmark 9.3
3. Singapore 9.2
4. Sweden 9.2
5. Switzerland 9.0
6. Netherlands 8.9
7. Australia 8.7
8. Canada 8.7
9. Iceland 8.7
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Block - II: Moderately corrupt countries
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1. Dominica 5.9
2. Portugal 5.8
3. Puerto Rico 5.8
4. Botswana 5.6
5. Taiwan 5.6
6. Brunei Darussalam 5.5
7. Oman 5.5
8. South Korea 5.5
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Block-III: Moderately high corrupt countries
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1. Albania 3.2
2. Vanuatu 3.2
3. Liberia 3.1
4. Sri Lanka 3.1
5. Bosnia and Herzegovina 3.0
6. Dominican Republic 3.0
7. Jamaica 3.0
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Block IV: The highest corrupt countries
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1. Chad 1.6
2. Iraq 1.5
3. Sudan 1.5
4. Myanmar 1.4
5. Afghanistan 1.3
6. Somalia 1.1
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CPI for the year 1999 ranked Pakistan as No 3 in the lowest part of the 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 CPI 2006, Pakistan Ranked 147 out of 163 with 2.2 score against the average of 4.23 out of 10 for 2006. In CPI 2008, Pakistan ranked as 134 out of 180 countries with an average of 2.5 out of 10.00. In CPI 2009, Pakistan was ranked 139 out of 180. This is a wake-up call for all of us.
On November 16, 2009, CPI-2009, gave Pakistan the 139th position out of a total number of 180 countries of the world, for which the CPI exercise was conducted by Transparency International. The higher the rank, the greater is the level of corruption as perceived by TI. Seven Surveys were used. Pakistan still is below the average and faces the challenge to reduce the extent of corruption.
When CPI 2009 was released one of the Federal Ministers of Pakistan rejected the announcement pertaining to Pakistan. However, the honourable Prime Minister of Pakistan set up a committee under the chairmanship of Federal Finance Minster to examine the issue and suggest ways and means to identify the issues relating to corruption in Pakistan and suggest ways to reduce it, if not eliminate it. This is a tacit approval of the acceptance of the existence of corruption in Pakistan.
Some think that corruption exists in all countries of the World with varying degrees but it is a way of life in Pakistan. No wonder, out of the 10 points, the CPI in respect of Pakistan is 2.4, indicating a high level of CPI. This has been correctly addressed by the democratic set up of Pakistan, which is a happy augury. Our approach should be to steadily move towards less corruption.
All stakeholders must contribute towards lesser corruption with the passage of time. All must contribute towards the noble cause of reducing corruption through transparency, moral rearmament, contentment and enforcement of law, through a crackdown to nab the corrupt segments of society, irrespective of their status. The job should be initiated on a priority basis and all institutions, including the National Accountability Bureau and the high-level courts should play their productive role to uproot corruption. The earlier this is done, the better.
RECOMMENDATIONS Based on recommendations of the TI and our viewpoint, some suggestions for reducing corruption 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 understand 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;
5. Accountability at all levels be ensured through sound and transparent institutionalised approach, with strengthened belief in Hereafter.
(The writer is Principal, Hailey College of Banking & Finance, University of the Punjab, Lahore-Pakistan)
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