The 2006 Corruption Perceptions Index (CPI), launched last month by Transparency International (TI), points to a strong link between corruption and poverty, with a concentration of impoverished states at the bottom of the ranking.

“Corruption traps millions in poverty,” said Transparency International Chair Huguette Labelle. “Despite a decade of progress in establishing anti-corruption laws and regulations, today’s results indicate that much remains to be done before we see meaningful improvements in the lives of the world’s poorest citizens.”

The 2006 Corruption Perceptions Index (CPI) is a composite index that draws on multiple expert opinion surveys that poll perceptions of public sector corruption in 163 countries around the world, the greatest scope of any CPI to date. It scores countries on a scale from zero to 10, with zero indicating high levels of perceived corruption and 10 indicating low levels of perceived corruption.

A strong correlation between corruption and poverty is evident in the results of the CPI 2006. Almost three quarters of the countries in the CPI score below five (including all low-income countries and all but two African states) indicating that most countries in the world face serious perceived levels of domestic corruption. Seventy one countries - nearly half - score below three, indicating that corruption is perceived as rampant. Haiti has the lowest score at 1.8; Guinea, Iraq and Myanmar share the penultimate slot, each with a score of 1.9; Finland, Iceland and New Zealand share the top score of 9.6.
Countries with a significant worsening in perceived levels of corruption include: Brazil, Cuba, Israel, Jordan, Laos, Seychelles, Trinidad and Tobago, Tunisia and the United States. Countries with a significant improvement in perceived levels of corruption include: Algeria, Czech Republic, India, Japan, Latvia, Lebanon, Mauritius, Paraguay, Slovenia, Turkey, Turkmenistan and Uruguay.

A concentration of so-called ‘failed states’ is apparent at the bottom of the ranking. Iraq has sunk to second-to-last place, with pre-war survey data no longer included in this year’s CPI. Intermediaries who began operating during the United Nations Oil-for-Food program continue to play a central role in driving corruption. The Volcker Commission reported that 2,392 companies paid kickbacks or made other illicit payments to the Saddam Hussein regime in the context of the program, often through intermediaries.

While the industrialized countries score relatively high on the CPI 2006, there continues to be major corruption scandals in many of these countries. Although corruption in this context probably has less of an impact on poverty and development than in developing countries. The weak performance of many countries indicates that the facilitators of corruption continue to assist political elites to launder, store and otherwise profit from unjustly acquired wealth, which often includes looted state assets. The presence of willing intermediaries - who are often trained in or who operate from leading economies - encourages corruption; it means the corrupt know there will be a banker, accountant, lawyer or other specialist ready to help them generate, move or store their illicit income.

In the Middle East, Lebanon improved over last year’s score. However, as most of the data used for the Corruption Perceptions Index was gathered prior to this year’s conflict between Israel and Lebanon, corruption in the current reconstruction phase - known to be particularly vulnerable - may not be reflected. In this year’s index, the increase in perceptions of the level of corruption in Jordan is notable. This is a critical result given that the country hosted both the Conference of States Parties to the United Nations Convention against Corruption and the G8 reform summit “Forum for the Future” this year. The country’s delay in following through on some of the provisions set out by the UN Convention, such as establishing an anti-corruption commission, whistle-blower protection and freedom of information laws, may be a contributing factor.