Doing Business in ME

Corruption remains a global threat

According to Transparency International’s Corruption Perceptions Index 2013 (CPI), UAE and Qatar rank as least corrupt countries in the Middle East 

Following the momentous events of 2011 and subsequent changes in the region – including elections, violence and protests – many remained concerned as to whether these countries were able after all of these challenges to fight their number one enemy. This enemy deprives each individual from attaining their full potential and from exploiting each country’s natural resources for the benefit of its citizens and for the well being of all of its people – rather than simply for the ruling family or those in power. This enemy is so easy to recognise, yet so difficult to defeat. This enemy is CORRUPTION.

“From children denied an education, to elections decided by money not votes, public sector corruption comes in many forms; bribes and backroom deals don’t just steal resources from the most vulnerable, they undermine justice and economic development, and destroy public trust in leaders”

CPI Report 2013.

Bribery is among the most difficult acts of corruption to trace and prove. Small businesses, those from certain ethnicities, and female-owned businesses are most affected by these illegal actions as, in general, they have less financial means to cope or fight against it, even if they want to. In order to win a bid or to acquire a deal that might keep their wheels turning in the current difficult economic situation they are coerced into making illegal payments.

Seven of the top ten most corrupt countries are in the Middle East with 84% of MENA countries scoring less than 50%.

With Globalisation, more businesses want to move overseas, to expand their businesses or to move into areas where labour is less expensive. But such courageous entrepreneurs have to be aware of the local conditions and the potential for other payments ‘to ease the way’ they may be expected to make to their local fixer or official who wants an envelope full of dollars to stamp a certain piece of paper/permit.  People in business should know in which countries they can trust public officials  – and where to avoid at all costs.

What are countries around the world trying to do to fight corruption?

In a well known, democratic East African state your correspondent has witnessed traffic police, whilst threatening to write a ticket for speeding, regularly asking for ‘a cup of coffee’ (i.e. a small bribe) to make them forget the offence. When challenged, some officers get heavy handed, others simply realise that the foreigners they are trying extort money from will not pay, and just let them go. This is just the lowest level of corruption with public servants adding to their salary by making illegal requests for bribes on a daily basis. Many coming up against this ‘everyday’ corruption feel powerless and just accept that it must be paid. Others bravely fight against it.

In India, an increasingly popular weapon in the fight against corruption is fake money. The Economist magazine wrote in their December 2013 issue about the zero rupee note, an anti-corruption gimmick now attracting worldwide attention. The notes look roughly like a 50 rupee note (<$1) and people are encouraged to hand them to corrupt officials to signal not only their resistance to being corrupted, but so that officials who have received such notes can be traced (if challenged before they discover/destroy the decoy note). The note clearly says upon it: ‘Eliminate corruption at all levels’ and ‘I promise neither to accept nor give a bribe’.

Vijay Anand, founder of the 5th Pillar anti-bribery campaign, calls them ‘a non-violent weapon of non-cooperation’. His idea has been running since 2007 and has so far caught on elsewhere – Nepal, Argentina, Mexico and Benin have been in contact asking for details, with Malaysia also mulling over a similar scheme.

Yemen launches its own worthless note this year, 2014. Thought to be one of the world’s most corrupt countries, this will be a hard task. Such campaigners may be taking extreme risks, especially in countries where guns seem to be the other main currency. However, in places where public opinion is slowly changing, this might be the first step towards widespread public refusal to sit and watch corruption eat into their beloved country

CPI Index – 10 least corrupt countries in the world:

  1.  Denmark (joint top)
  2. New Zealand (joint top)
  3. Finland
  4.  Sweden 
  5.  Norway
  6.  Singapore 
  7.  Switzerland
  8.  Netherlands
  9.  Australia
  10.  Canada 

CPI Index – 10 most corrupt countries in the world

175 – Somalia (joint bottom)

175 – North Korea (joint bottom)

175 – Afghanistan (joint bottom)

174 – Sudan

173 – South Sudan

172 – Libya

171 – Iraq

168 – Uzbekistan

168 –Turkmenistan 

168 – Syria 

 

Note: No country was corruption free, not even Denmark or New Zealand, who jointly topped the list as being least corrupt.

About the Corruption Perceptions Index 2013

The Corruption Perceptions Index 2013 serves as a reminder that the abuse of power, secret dealings and bribery continue to ravage societies around the world.

The Index scores 177 countries and territories on a scale from 0 (highly corrupt) to 100 (very clean). No country has a perfect score, and two-thirds of countries score below 50. This indicates a serious, worldwide corruption problem.

The world urgently needs a renewed effort to crack down on money laundering, clean up political finance, pursue the return of stolen assets and build more transparent public institutions.

The Corruption Perceptions Index (CPI) ranks countries and territories based on how corrupt their public sector is perceived to be. It is a composite index – a combination of polls, surveys and assessments of corruption – related data collected by a variety of reputable institutions.

The CPI reflects the views of observers from around the world, including experts living and working in the countries and territories evaluated. The CPI is the most widely used indicator of corruption worldwide.

The CPI based on perceptions

Corruption generally comprises illegal activities, which are deliberately hidden and only come to light through scandals, investigations or prosecutions. There is no meaningful way to assess absolute levels of corruption in countries or territories on the basis of hard empirical data.

Possible attempts to do so, such as by comparing bribes reported, the number of prosecutions brought, or studying court cases directly linked to corruption cannot be taken as definitive indicators of corruption levels. Instead, they show how effective prosecutors, the courts or the media are in investigating and exposing corruption.

Capturing perceptions of corruption of those in a position to offer assessments of public sector corruption is the most reliable method of comparing relative corruption levels across countries.

The data sources for the CPI

The 2013 CPI draws on data sources from independent institutions specializing in governance and business climate analysis. The sources of information used for the 2013 CPI are based on data gathered in the past 24 months. The CPI includes only sources that provide a score for a set of countries/territories and that measure perceptions of corruption in the public sector. Transparency International reviews the methodology of each data source in detail to ensure that the sources used meet Transparency International’s quality standards.

Improving countries 

The biggest CPI improvers this year are Myanmar, Brunei, Laos, Senegal, Nepal, Estonia, Greece, Lesotho and Latvia. The biggest decliners are Syria, the Gambia, Guinea-Bissau, Libya, Mali, Spain, Eritrea, Mauritius, Yemen, Australia, Iceland, Slovenia, Guatemala, Madagascar and Congo Republic

The CPI does not tell the full story of corruption in a country

The CPI is limited in scope, capturing perceptions of the extent of corruption in the public sector, from the perspective of business people and country experts. Complementing this viewpoint and capturing different aspects of corruption, Transparency International produces a range of both qualitative and quantitative research on corruption, both at the global level from its Secretariat and at the national level through Transparency International’s network of National Chapters based in over 90 countries around the world.

 

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