The divide in perceived levels of corruption in rich and poor countries remains as sharp as ever, according to the 2007 Corruption Perceptions Index (CPI), released today by Transparency International, the global coalition against corruption. Developed and developing countries must share responsibility for reducing corruption, in tackling both the supply and demand sides.

"“Despite some gains, corruption remains an enormous drain on resources sorely needed for education, health and infrastructure,...” said Huguette Labelle, Chair of Transparency International. ...“Low scoring countries need to take these results seriously and act now to strengthen accountability in public institutions. But action from top scoring countries is just as important, particularly in cracking down on corrupt activity in the private sector"

The 2007 results

The 2007 Corruption Perceptions Index looks at perceptions of public sector corruption in 180 countries and territories - the greatest country coverage of any CPI to date ...– and is a composite index that draws on 14 expert opinion surveys. It scores countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption.

A strong correlation between corruption and poverty continues to be evident. Forty percent of those scoring below three, indicating that corruption is perceived as rampant, are classified by the World Bank as low income countries. Somalia and Myanmar share the lowest score of 1.4, while Denmark has edged up to share the top score of 9.4 with perennial high-flyers Finland and New Zealand.

Scores are significantly higher in several African countries in the 2007 CPI. These include Namibia, Seychelles, South Africa and Swaziland. These results reflect the positive progress of anti-corruption efforts in Africa and show that genuine political will and reform can lower perceived levels of corruption.

Other countries with a significant improvement include Costa Rica, Croatia, Cuba, Czech Republic, Dominica, Italy, Macedonia, Romania and Suriname. Countries with a significant worsening in perceived levels of corruption in 2007 include Austria, Bahrain, Belize, Bhutan, Jordan, Laos, Macao, Malta, Mauritius, Oman, Papua New Guinea and Thailand.

The concentration of gainers in South East and Eastern Europe testifies to the galvanising effect of the European Union accession process on the fight against corruption.

A number of relatively poor countries manage to contain corruption to a degree, scoring well on the CPI, including Botswana, Cape Verde, Chile, Dominica, Estonia, Ghana, Samoa, Senegal, St. Lucia, St. Vincent and the Grenadines and Uruguay. They prove that it is possible to break out of the vicious cycle of poverty and corruption.

At the same time, deeply troubled states such as Afghanistan, Iraq, Myanmar, Somalia, and Sudan remain at the very bottom of the index. ...“Countries torn apart by conflict pay a huge toll in their capacity to govern. With public institutions crippled or non-existent, mercenary individuals help themselves to public resources and corruption thrives,...” said Labelle.

Good governance begins at home

The poorest countries suffer most under the yoke of corruption. And it is ultimately their responsibility to tackle the problem. Low scores in the CPI indicate that public institutions are heavily compromised. The first order of business is to improve transparency in financial management, from revenue collection to expenditure, as well as strengthening oversight and putting an end to the impunity of corrupt officials.

An independent and professional judicial system is critical to ending impunity and enforcing the impartial rule of law, to promoting public, donor and investor confidence. If courts cannot be relied upon to pursue corrupt officials or to assist in tracing and returning illicit wealth, progress against corruption is unlikely.

...“Partnering with civil society and citizens is another essential strategy for developing countries seeking to strengthen the accountability of government. Civil society organisations play a vital watchdog role, can help stimulate demand for reform and also bring in expertise on technical issues,...” said Cobus de Swardt, Managing Director of Transparency International. ...“But, increasingly, many governments are moving to restrict the operating space of civil society....”

In addition, many countries are unable to shoulder the burden of reform alone. In countries where public sector institutions were historically based on patronage and nepotism rather than merit, reform takes time and can require a substantial investment of resources, as well as technical assistance. As significant development assistance donors, top scoring countries play a special role in supporting greater accountability and institutional integrity in countries plagued by the highest levels of public sector corruption. Technical assistance is a key requirement of the landmark United Nations Convention against Corruption (UNCAC).

Corruption is a problem with global roots

The top scores of wealthy countries and territories, largely in Europe, East Asia and North America, reflect their relatively clean public sectors, enabled by political stability, well-established conflict of interest and freedom of information regulations and a civil society free to exercise oversight.

But corruption by high-level public officials in poor countries has an international dimension that implicates the CPI...’s top scorers. Bribe money often stems from multinationals based in the world...’s richest countries. It can no longer be acceptable for these companies to regard bribery in export markets as a legitimate business strategy.

In addition, global financial centres play a pivotal role in allowing corrupt officials to move, hide and invest their illicitly gained wealth. Offshore financing, for example, played a crucial role in the looting of millions from developing countries such as Nigeria and the Philippines, facilitating the misdeeds of corrupt leaders and impoverishing those they governed.

Akere Muna, Vice Chair of Transparency International, pointed to the recovery of stolen assets as another area ripe for enhanced action by developed nations, noting, ...“Criticism by rich countries of corruption in poor ones has little credibility while their financial institutions sit on wealth stolen from the world...’s poorest people....”

In many cases, asset tracing and recovery are hindered by the laundering of funds through offshore banks in jurisdictions where banking secrecy remains the norm. Through the UNCAC, priority should be given to improving international cooperation and mutual legal assistance, expediting action to recover assets, and developing legal and technical expertise in nations requesting the return of looted assets.

For many countries, repatriation of funds will mean long and extensive litigation. ...“In addition to ensuring adequate legal funding, simplifying recovery procedures and provisions for third party institutions to act as escrows during litigation must be a high priority,...” Muna added.

Act now: urgent steps

As a problem of global scale, with global roots, fighting corruption demands action on a broad front.

- Developing countries should use aid money to strengthen their governance institutions, guided by national assessments and development strategies, and to incorporate strengthened integrity and corruption prevention as an integral part of poverty reduction programmes.

- Judicial independence, integrity and accountability must be enhanced to improve the credibility of justice systems in poorer countries. Not only must be judicial proceedings be freed of political influence, judges themselves must subject to disciplinary rules, limited immunity and a code of judicial conduct to help ensure that justice is served. A clean and capable judiciary is essential if developing countries are to manage requests for assistance in the recovery of stolen assets from abroad.

- Governments must introduce anti-money laundering measures to eradicate safe havens for stolen assets, as prescribed by the UNCAC. Leading banking centres should explore the development of uniform expedited procedures for the identification, freezing and repatriation of the proceeds of corruption. Clear escrow provisions for disputed funds are essential.

- Wealthy countries must regulate their financial centres more strictly. Focusing on the roles of trusts, demanding knowledge of beneficial ownership and strengthening anti-money laundering provisions are just a few of the ways that rich governments can tackle the facilitators of corruption.

- The world...’s wealthiest governments must strictly enforce the OECD Anti-Bribery Convention, which criminalises the bribery of foreign public officials. Lack of compliance with the convention...’s provisions continues to hinder corruption investigations and prosecutions.

- The boards of multinational companies must not only introduce but implement effective anti-bribery codes, and ensure that they are adhered to by subsidiaries and foreign offices.

The 2007 Corruption Perception and Index. For information on data and methodology please consult the framework document at www.transparency.org [2] or www.ICGG.ORG [3].

1 Denmark

1 Finland

1 New Zealand

4 Singapore

4 Sweden

6 Iceland

7 Netherlands

7 Switzerland

9 Canada

9 Norway

11 Australia

12 Luxembourg

12 United Kingdom

14 Hong Kong

15 Austria

16 Germany

17 Ireland

17 Japan

19 France

20 USA

21 Belgium

22 Chile

23 Barbados

24 Saint Lucia

25 Spain

25 Uruguay

27 Slovenia

28 Estonia

28 Portugal

30 Israel

30 Saint Vincent and the Grenadines

32 Qatar

33 Malta

34 Macao

34 Taiwan

34 United Arab Emirates

37 Dominica

38 Botswana

39 Cyprus

39 Hungary

41 Czech Republic

41 Italy

43 Malaysia

43 South Africa

43 South Korea

46 Bahrain

46 Bhutan

46 Costa Rica

49 Cape Verde

49 Slovakia

51 Latvia

51 Lithuania

53 Jordan

53 Mauritius

53 Oman

56 Greece

57 Namibia

57 Samoa

57 Seychelles

60 Kuwait

61 Cuba

61 Poland

61 Tunisia

64 Bulgaria

64 Croatia

64 Turkey

67 El Salvador

68 Colombia

69 Ghana

69 Romania

71 Senegal

72 Brazil

72 China

72 India

72 Mexico

72 Morocco

72 Peru

72 Suriname

79 Georgia

79 Grenada

79 Saudi Arabia

79 Serbia

79 Trinidad and Tobago

84 Bosnia and Herzegovina

84 Gabon

84 Jamaica

84 Kiribati

84 Lesotho

84 Macedonia

84 Maldives

84 Montenegro

84 Swaziland

84 Thailand

94 Madagascar

94 Panama

94 Sri Lanka

94 Tanzania

98 Vanuatu

99 Algeria

99 Armenia

99 Belize

99 Dominican Republic

99 Lebanon

99 Mongolia

105 Albania

105 Argentina

105 Bolivia

105 Burkina Faso

105 Djibouti

105 Egypt

111 Eritrea

111 Guatemala

111 Moldova

111 Mozambique

111 Rwanda

111 Solomon Islands

111 Uganda

118 Benin

118 Malawi

118 Mali

118 Sao Tome and Principe

118 Ukraine

123 Comoros

123 Guyana

123 Mauritania

123 Nicaragua

123 Niger

123 Timor-Leste

123 Viet Nam

123 Zambia

131 Burundi

131 Honduras

131 Iran

131 Libya

131 Nepal

131 Philippines

131 Yemen

138 Cameroon

138 Ethiopia

138 Pakistan

138 Paraguay

138 Syria

143 Gambia

143 Indonesia

143 Russia

143 Togo

147 Angola

147 Guinea-Bissau

147 Nigeria

150 Azerbaijan

150 Belarus

150 Congo, Republic

150 Côte d...´Ivoire

150 Ecuador

150 Kazakhstan

150 Kenya

150 Kyrgyzstan

150 Liberia

150 Sierra Leone

150 Tajikistan

150 Zimbabwe

162 Bangladesh

162 Cambodia

162 Central African Republic

162 Papua New Guinea

162 Turkmenistan

162 Venezuela

168 Congo, Democratic Republic

168 Equatorial Guinea

168 Guinea

168 Laos

172 Afghanistan

172 Chad

172 Sudan

175 Tonga

175 Uzbekistan

177 Haiti

178 Iraq

179 Myanmar

179 Somalia

TI, 26/09/07.