Survey finds 'rampant' global corruption, hobbling poverty fight

Wed Oct 20,10:43 AM ET


LONDON (AFP) - Corruption is crippling the battle against poverty and
robbing oil-rich countries such as Iraq (news - web sites) of their
development potential, a respected global graft watchdog warned in an
annual report on sleaze.

Haiti and Bangladesh were perceived as the world's most corrupt nations in
the survey of 146 countries by Transparency International, closely followed
by Nigeria, Myanmar and Chad.

"This is an amazing evidence again that corruption is still rampant all
over the world," the organisation's chairman Peter Eigen told a press
conference in London.

"In most countries economic policy is still perverted by corruption... and
therefore poverty cannot be effectively addressed," he said Wednesday.

The index by the Berlin-based watchdog looks at perceived corruption among
public officials and politicians.

Just below the worst five countries were Paraguay and Azerbaijan, all seven
of which scored less than two out of a best possible score of 10.

Sixty countries failed to score three out of 10, the mark corresponding to
Transparency's benchmark for "rampant corruption," while 106, fully two
thirds of those surveyed, scored less than five.

The countries with the cleanest slate were Finland, New Zealand, Denmark,
Iceland and Singapore.

Eigen said developing countries in particular must root out sleaze in
public works if they hoped to improve the quality of life of their
citizens.

"Corruption in large-scale public projects is a daunting obstacle to
sustainable development, and results in a major loss of public funds needed
for education, health care and poverty alleviation, both in developed and
developing countries," he said in a statement.

"If we hope to reach the Millennium Development Goal of halving the number
of people living in extreme poverty by 2015, governments need to seriously
tackle corruption in public contracting," he said, referring to a United
Nations (news - web sites) target set in 2000.

He added that nations rich in natural resources too often undermined their
own prospects with widespread graft and kickbacks among local leaders and
foreign investors.

"Oil-rich Angola, Azerbaijan, Chad, Ecuador, Indonesia, Iran, Iraq,
Kazakhstan, Libya, Nigeria, Russia, Sudan, Venezuela and Yemen all have
extremely low scores," he said, indicating high corruption.

"In these countries, public contracting in the oil sector is plagued by
revenues vanishing into the pockets of Western oil executives, middlemen
and local officials."

The anti-corruption official issued a particular warning over Iraq, which
he said was at risk because of its combination of oil reserves and post-
conflict instability.

"Whenever there is a rush and a push (for reconstruction), particularly
when petroleum is involved, the danger of corruption is immense," Eigen
said.

He and Jeremy Carver, head of international law at the London firm Clifford
Chance, said procurement of large-scale public contracts, such as those
being disbursed for Iraq's reconstruction and stabilization, were potential
sources of corruption.

Reffering to the US contractor Halliburton, winner of a multi-billion-
dollar no-bid contract from the US government for work in Iraq, Carver
said: "This is an absolutely clear example of what happens in the post-
conflict zone."

"Without strict anti-bribery measures, the reconstruction of Iraq will be
wrecked by a wasteful diversion of resources to corrupt elites," Eigen
said.

He urged Western countries to require oil companies to open their books to
show what they pay in fees, royalties and other payments to host
governments and state oil companies.

Perceived corruption increased in the past year in Bahrain, Belize, Cyprus,
the Dominican Republic, Jamaica, Kuwait, Luxembourg, Mauritius, Oman,
Poland, Saudi Arabia, Senegal, and Trinidad and Tobago, according to the
Transparency survey.

But a drop in graft was seen in Austria, Botswana, the Czech Republic, El
Salvador (news - web sites), France, Gambia, Germany, Jordan, Switzerland,
Tanzania, Thailand, Uganda, the United Arab Emirates and Uruguay.

The index was based on polls reflecting the perceptions of business people
and analysts from inside and outside the countries. This year's index drew
on 18 surveys between 2002 and 2004 conducted by 23 independent
institutions.

The organization noted that the index included only those countries that
feature in at least three surveys, meaning that many countries -- including
some which could be among the most corrupt -- were missing from the list.

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