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Does poverty lead to corruption? Or is it corruption that actually causes poverty?

THE challenges of achieving the Shared Prosperity Vision 2030 are not the lack of economic opportunities or resources, but corruption and leakages of public funds.

Apart from the Covid-19 pandemic, these moral challenges were also part of the reasons behind our failure to materialise Vision 2020.

Transparency International reported early this year that Malaysia dropped six places in 2020's Corruption Perception Index, scoring 51 out of 100 points, and ranking 57th out of 180 countries.

No Muslim countries were in the top 20. The United Arab Emirates was ranked 21st, with a score of 70. Qatar ranked 30th and Brunei 35th.

More than half the Muslim countries were in the bottom 20, which represented countries perceived to be the most corrupt.

It is a paradox that Muslim-majority countries were perceived as more corrupt when Islam is clearly against all forms of fasad, or corruption: "The punishment of those who wage war against Allah and His Messenger, and strive to spread corruption through the land is: execution, or crucifixion, or the cutting off of hands and feet from opposite sides, or exile from the land: that is their disgrace in this world, and a heavy punishment is theirs in the Hereafter" (the Quran, 5:33).

Within syariah law, the discussion on corruption is related to ghulul (abuse of power), sariqah (embezzlement), khiyanah (treason) and risywah (bribery).

In Indonesia, an act of corruption is recognised as a ta'zir crime, an offence that allows a judge to consider the legal provision as per Article 2 Paragraph (2) of Law No.31 of 1999, concerning capital punishment or the death penalty.

Many studies have shown that corruption is associated with poverty.

Last year's CPI indicates that rich Muslim countries, such as the UAE, Qatar and Brunei, were clean Muslim countries, whereas many poor Organisation of Islamic Cooperation (OIC) countries were the most corrupt.

Does poverty lead to corruption? Or is it corruption that actually causes poverty?

A causality analysis involving 97 developing countries found that corruption and poverty go hand in hand and run in both directions.

Corruption leads to poverty by means of poor economic growth and/or bad governance.

An economic model postulates that corruption discourages foreign investments, decreases tax revenue and, in turn, induces poverty.

In addition, the governance model asserts that poverty increases due to rampant corrupt practices, which erode institutional capacity to deliver quality public services.

Another analysis focusing on 43 OIC members revealed that the combined effects of natural resources and corruption had a positive effect on gross domestic product per capita.

In other words, Muslim countries endowed with natural resources still gained positive economic growth even with the presence of corruption.

The results also indicate that information and communication technology reduces the negative economic impact of corruption.

We can see that corruption may exist at every level of society and in every country — rich and poor. Judging solely by economic growth, we may perceive a poor country as corrupt, and wrongly perceive a rich country with abundant natural resources as clean.

Hence, gauging and dealing with corruption, whether in poor or wealthy countries, require proper assessment and implementation of good governance, not relying on the metric of economic growth alone.

So how shall we strengthen good governance in Muslim countries? In Islamic tradition, hisbah served the function of overseeing morality and ethics in marketplaces and public offices.

We can consider the Malaysian Anti-Corruption Commission as a present-day hisbah institution.

What is more important is to instil true Islamic values and apply hisbah as personal governance.

Research showed the police and elected officials are the most corrupt. Interestingly, an analysis of police officials in Malaysia indicates that religiosity lowers their involvement in corruption and fraudulent acts.

Without good governance, Covid-19 financial aid may open the door to corruption and diversion of funds, resulting in economic injustice and widening inequality.

Recent data signified that corruption is prevalent in countries with a poor handling of the pandemic.

In conjunction with the International Anti-Corruption Day on Dec 9, let's unite and say no to corruption.

The writer is a fellow at the Centre for Economics and Social Studies, Institute of Islamic Understanding Malaysia

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