Corruption on the rise in Gulf countries

Date:

Middle Eastern countries have seen a “drastic” rise in their perceived level of corruption in the past year, according to analysis by Transparency International.

Thank you for reading this post, don't forget to subscribe!

Qatar, Kuwait, Bahrain and Saudi Arabia all took larger backward steps in the campaign group’s annual Corruption Perceptions Index than any of the other 176 countries in the rankings.

In contrast, TI saw signs of progress in some unlikely places, including North Korea, Afghanistan and Belarus, as well as China, Brazil and India.

The collapsing standings of the four Gulf states point to the deeper problems across much of the Arab world, with Somalia, Syria, Sudan, Yemen and Libya all among the seven most corrupt states in the world, according to the rankings.

“Despite the political changes that shook the Arab region six years ago, the hope for Arab countries to fight corruption and end impunity has not seen any progress yet,” said Kinda Hattar, regional co-ordinator for Transparency International.

A survey of 11,000 people in nine Middle East and North African countries conducted by TI concluded that 50m people, almost a third of public service users, have to pay bribes to access basic services. Some 61 per cent of those surveyed thought corruption was increasing, with just 15 per cent saying it was diminishing.

Qatar saw the biggest fall in the 2016 index, with its score sliding 10 points from 71 to 61 on a scale of 0-100 where countries with the highest scores are seen as the cleanest, based on combining 13 indices created by the likes of the World Bank, Bertelsmann Foundation and Freedom House.

Kuwait and Bahrain both fell eight points, to 41 and 43 respectively, and Saudi Arabia six points to 46, as the first table shows.

Biggest fallers in 2016 Corruption Perceptions Index
2016 score (points) 2015 score (points) Change
Qatar 61 71 -10
Kuwait 41 49 -8
Bahrain 43 51 -8
Saudi Arabia 46 52 -6
Cyprus 55 61 -6
Syria 13 18 -5
Mexico 30 35 -5
Macedonia 37 42 -5
Lesotho 39 44 -5
Jordan 48 53 -5
Source: Transparency International

The worsening of perceived corruption levels has come just as the Gulf states are increasingly turning to foreign investors for funding, with record international bond issuance of $66bn in 2016.

“Gulf States have dropped on the index as ruling families continue to hold power politically and economically, public freedoms are oppressed, and an active independent civil society is absent,” said Ms Hattar. “The military involvement of these states in regional coalitions has raised the levels of secrecy and ambiguity of public expenditure and state budgets.”

Qatar’s perceived corruption levels were further heightened by its implication in Fifa’s corruption scandals, particularly the decision to award the 2022 football World Cup to the country, as well as reports of human rights abuses of migrant workers.

Shahin Shamsabadi, head of business intelligence for the Mena region at the Risk Advisory Group, a consultancy which launched its own Corruption Challenges Index this week, said: “Corruption is something of an occupational hazard for foreign investors in Mena. Anti-corruption measures are typically reactive rather than proactive, and in some jurisdictions bribes are not only accepted but expected.”

Despite the poor showing by Arab states in general, Finn Heinrich, research director at TI, said there was no single reason for their failings.

“At the bottom [of the index] there are two types of countries. You have countries that are falling apart, where the state has retreated and where corruption is the way to get by for people. But there are others where the state has a lot of power but in a way that doesn’t provide any space for people to hold the government to account,” Mr Heinrich said.

On a brighter note, the score of authoritarian Belarus has jumped by eight points, to an admittedly still low 40, as the second table shows.

Biggest risers in 2016 Corruption Perceptions Index
2016 score (points) 2015 score (points) Change
Surinam 45 36 9
Belarus 40 32 8
East Timor 35 28 7
Myanmar 28 22 6
Laos 30 25 5
Guyana 34 29 5
Georgia 57 52 5
North Korea 12 8 4
Afghanistan 15 11 4
Turkmenistan 22 18 4
Argentina 36 32 4
Burkina Faso 42 38 4
Sao Tome and Principe 46 42 4
Cape Verde 59 55 4
Source: Transparency International

Mr Heinrich said the government of the former Soviet state has taken steps to prosecute a number of oligarchs suspected of corruption in the past year, but added “whether that is sustainable or is politically motivated we do not know,” at this stage.

More-troubled still Afghanistan has also seen a meaningful improvement, rising four points to 15. Mr Heinrich said Kabul had passed anti-corruption legislation, created a National High Council for Rule of Law and Anti-Corruption, a National Procurement Authority and a mandatory asset declaration policy for senior government officials, although he admits the jury is still out as to how effective these steps will prove.

Brazil, up two points to 40, is perhaps another surprising riser in the Corruption Perceptions index, given the vast and sprawling Lava Jato (car wash) corruption scandal that has exposed widespread wrongdoing by politicians, construction groups and Petrobras, the state-owned oil company.

However Mr Heinrich said Brazil’s rating had fallen from 43 points in 2012 as a result of the scandal, and was now starting to recover due to the fact it is finally beginning to tackle endemic corruption.

China, likewise, rose three points to 40 as a result of President Xi Jinping’s continuing anti-corruption drive. Last year alone, 415,000 Communist party members were disciplined and 11,000 expelled from the party and handed over to China’s courts for prosecution, according to the Central Commission for Discipline Inspection.

Charles Robertson, global chief economist at Renaissance Capital, an emerging markets-focused investment bank, argued that alongside Mr Xi’s crackdown, China’s per capita gross domestic product was now approaching levels where “the middle class begins to demand less corruption”.

However, China is ranked as the country where businesses face the greatest corruption challenges by the Risk Advisory Group. Its 181-country index is based on the threat of corruption, the level to which foreign investors are exposed to enforcement action under the US Foreign and Corrupt Practices Act (FCPA) and the availability of reliable information to conduct integrity-based due diligence.

“There is no denying that the country’s large market and growing middle class is attractive for foreign investors, but endemic corruption in some sectors, the close nexus between business and politics, and the high incidence of FCPA enforcement actions make for a high-risk business environment,” said Brendan McGloin, head of business intelligence, Asia for the group.

Iraq, Nigeria and Angola are ranked as the next most challenging countries by the Risk Advisory Group, with Venezuela, Indonesia and Vietnam also in the top ten.

Elsewhere, Mr Robertson highlighted improvements in a number of frontier markets, such as Argentina, Tunisia, Vietnam, Romania and Pakistan.

He also praised Nigerian president Muhammadu Buhari and John Magufuli, his Tanzanian counterpart, for their focus on fighting corruption, which in both cases has yielded a two-point improvement in the TI’s index, to 28 and 32 respectively.

Mr Robertson argued that reducing corruption tended to lead to higher equity prices, “because it increases the confidence investors have in the legal system which can be needed to support minority investor rights”.

Some of the year-to-year movements in the index can be little more than “noise”, Mr Heinrich said. Larger, multi-year moves typically tend to be more significant.

He cited Hungary, which has fallen seven points to 48 since 2012, and Turkey, down eight points to 41, as shown in the third chart, as examples.

Naija247news
Naija247newshttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

Share post:

Subscribe

Popular

More like this
Related

Mbah inaugurates ESUT Governing Council

Governor of Enugu State, Dr. Peter Mbah has inaugurated...

Canada-based Nigerian playwright, Oguntokun is dead

Renowned Nigerian playwright and theatre director, Wole Oguntokun, is...

Atiku’s loyalists declare support for Tinubu, Fubara

By Daniel Abia, P/Harcourt Members of the former Rivers State...

FAAN shuts KFC outlet at MMIA

In response to a social media report by a...
Social Media Auto Publish Powered By : XYZScripts.com

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading