TRANSPARENCY International (TI) released its 23rd annual Corruption Perceptions Index (2020 CPI) yesterday. The index ranks 180 countries by perceived levels of public sector corruption.
Malaysia ranks 57 among 180 countries, going down six places with a score of 51 out of 100.
In 2019, the country was ranked 51 with a score of 53, which was also the best score in the last seven years.
The drop, as shown in Table 1, is due to the prevalence of corruption, political instability, crisis in democracy where weak institutions are less able to control corruption, a weak economy, lack of good governance and an uncertain future. If these factors — including a weak political will — are not corrected, our position may worsen in the next CPI.
A country's rank indicates its perceived corruption position relative to the other countries reviewed. The higher the ranking, the less corrupt a country is perceived to be.
On the other hand, the score indicates the perceived level of public sector corruption on a scale of zero (highly corrupt) to 100 (very clean).
For comparison, the scores of the best-ranked countries in the world may be seen in Table Two.
The top countries, Denmark and New Zealand, shared the same score of 88 points. The bottom countries are Somalia, South Sudan and Syria, with scores of 12, 12 and 14, respectively.
The CPI is a poll of polls, a composite index that combines data and surveys done by business people from around the world, including experts and analysts working in the countries evaluated.
The data is not collected by TI, but rather by other organisations. TI's headquarters in Berlin, Germany, simply brings everything together to create one score for each jurisdiction.
Independent and reputable institutions, via credible sources using diverse sampling frameworks and different methodologies, come out with the indexing, which is then audited by the European Commission Joint Research Centre.
Malaysia is using nine out of 13 secondary sources to calculate the CPI, which are the:
BERTELSMANN Foundation Transformation Index:
This is based on expert assessments of the state of transformation management performance and economic systems in the surveyed countries. In relation to corruption, the experts are asked to assess to what extent public officeholders are prevented from abusing their position for private interests, and does the government successfully prosecute, penalise and prevent corruption.
ECONOMIST Intelligence Unit Country Risk Ratings:
This is a global research and advisory firm that produces business intelligence and financial exposure for policymakers worldwide. In assessing corruption, it uses the following questions:
• Are there clear procedures and accountability governing the allocation and use of public funds?
• Do ministers/public officials misappropriate public funds for private or political party use?
• Are there special funds for which there is no accountability?
• Are there general abuses of public resources?
• Is there a professional civil service or does the government directly appoint large numbers of officials?
• Is there an independent body auditing the management of public finances?
• Is there an independent judiciary with the power to try ministers and public officials for abuses?
• Is there a tradition of paying bribes to secure contracts and gain favours?
IMD World Competitiveness Yearbook:
The International Institute for Management Development is a top-ranked business school in Geneva, Switzerland, with bases around the world.
Their survey measures the competitiveness of nations, ranking and examining how a nation's socio-political and economic climate affects corporate competitiveness. For corruption, survey respondents are asked, "Bribing and corruption: Exist or do not exist?"
POLITICAL and Economic Risk Consultancy Asian Intelligence:
This is a consulting firm involved in strategic business information and analysis for companies doing business in East and Southeast Asia. Local and expatriate business respondents are asked whether they perceive corruption as a problem in certain positions or institutions.
POLITICAL Risk Services International Country Risk Guide:
This survey assesses the banks' role in economic management, structural policies, social inclusion and public sector management of countries eligible for aid from the International Development Association. The survey assesses transparency, accountability and corruption in the public sector.
WORLD Justice Project Rule of Law Index:
This is a non-profit organisation committed to promoting the rule of law, opportunity and equity around the world. As for corruption, the local experts are asked to assess whether officials in the executive, judicial branch, legislature, police and military misuse public office for private gain.
WORLD Economic Forum Executive Opinion Survey:
This survey is an independent non-profit organisation which engages businesses, leaders and academics to shape global agendas. It is an annual survey of business executives.
For corruption, respondents are asked to rate how common is the diversion of public funds to companies, individuals or groups due to corruption connected to the following: Imports and exports, public utilities, annual tax payments, awarding of public contracts and licensing and obtaining favourable judicial decisions.
GLOBAL Insight Country Risk Ratings:
The ratings from a global information company cover macroeconomics, country risk and individual sector analysis in 30 countries. The ratings assess a broad range of corruption — from petty bribe-giving to higher-level political corruption — and the scores assigned to each country are based on a qualitative assessment of corruption in each country; and,
VARIETIES of Democracy (V-DEM) Project:
This is a new approach to conceptualising and measuring democracy. The corruption index includes measures from the executive realm that distinguish between corruption and bribery; and embezzlement from corruption.
V-DEM differentiates bribery and corruption in the highest echelons of the executive committees and councils, which include rulers and at the cabinet level.
In the public sector, there are several distinguishable types of corruption which are included, namely petty and grand, bribery and theft, and corruption aimed at influencing law-making and which affects implementation.
The nine sources, as compiled in Table Three, were used to calculate the 2020 CPI for Malaysia. Each source carries 100 marks and the average is taken from the total of all sources to determine the CPI score.
The CPI has increasingly become a highly regarded and influential survey for good governance, influencing the rate of economic growth, investment and is a key marker in international efforts to fight corruption.
Indeed, the CPI is a helpful and renowned tool to measure corruption and tell us whether bribery and corruption continue to plague our country. The TI-CPI criteria are the best in the absence of an alternative system.
The writer is president, Malaysia Association of Certified Fraud Examiners
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times