Turkey loses steam in fight against corruption

U.S. and world leaders have fallen short in efforts to combat global corruption as policies to fight the international recession lose urgency, according to the annual Corruption Perceptions Index, released by Transparency International.

Turkey also slid down in the index, falling to the 61st spot with a score of 4.4. In last year’s index, the country ranked 58th, with a score of 4.6.

The scores of Turkey and Croatia, both European Union candidate countries, surpassed those of the newest EU members, Bulgaria and Romania. Turkey and Croatia scored 4.4 and 4.1, respectively, while Bulgaria and Romania both scored 3.8.

Despite Turkey’s slide down the global corruption ladder, it ranked the best in its region, which includes Southeastern Europe, Eastern Europe and Central Asia. Turkey is followed by Croatia, Georgia and Montenegro.

The global index ranks New Zealand the best in the struggle against corruption, with a score of 9.4. New Zealand is followed by Denmark (9.3), Singapore (9.2), Sweden (9.2), Switzerland (9) and Finland (8.9).

Globally, Germany ranks 14th with 8 points, while Japan and United Kingdom rank 17th with 7.7 points each. The United States, the world’s largest economy, ranks 19th with 7.5 points and China, the rising new global power, ranks 79th with only 3.6 points.

At the bottom of the list are countries burdened by war, lack of infrastructure or dictatorship: Myanmar, Afghanistan, Somalia, Sudan and Iraq.

Vanishing sense of urgency

The Group of 20 leaders have not taken advantage of initiatives meant to steady the global economy while reducing worldwide corruption levels, Francois Valerian, the director of Transparency International’s private-sector programs, told Bloomberg ahead of the report’s release.

“The sense of urgency we had last fall seems to have vanished, for the very simple reason that capital markets seem to have recovered,” Valerian said by phone from Berlin, where the group is based. “Our concern is that we are back to business as usual.”

This year’s index, which measures the perception of corruption in a country, showed 129 of the 180 nations reviewed scoring below five on a 0-to-10 scale, with 10 indicating the least corrupt, Transparency said.

The U.S. slipped a notch to 19th place from 18th, even though the country’s score climbed to 7.5 from 7.3. Transparency cited “widespread concerns” about American oversight of the financial sector in its ranking of the United States.

U.S. administrations and Congress have failed to strengthen regulation of executive pay, derivatives trading and bankruptcy protection, Valerian added.

In industrialized countries, fraud discourages investors who seek to avoid risk. In developing countries, corruption fuels a cycle of poverty as non-functioning institutions fail to provide goods and services, the group said.

Just one type of corruption, bribery – excluding investment losses and damages to development and economic growth – siphons off $1 trillion a year from the global economy, according to a 2004 World Bank Institute report cited by Transparency.

The group called corruption a “substantial threat to a sustainable economic future.”

Transparency International lauded initiatives by the Organization for Economic Cooperation and Development, or OECD, on tax havens, though it said there is little the organization can do if jurisdictions continue to allow tax evasion, flouting the tax rules of most leading developed countries. At the behest of the G-20, the OECD has published a list of countries that have not followed through with their promises to play by global tax rules.

“We are giving the OECD the benefit of the doubt,” Valerian said, adding that more treaties need to be signed to exchange data.

Identifying corruption and championing transparency has become more vital in a year when governments increased spending, unleashing “fast-track disbursements of public funds,” Transparency International’s chairwoman, Huguette Labelle, said in a statement.

The composite index, which combines data from 10 independent institutions, has become a benchmark gauge of perceptions of a country’s corruption and an assessment of risks for investors.