India, China Lead Bribery Index: Africa's Development Efforts Are Being Hampered by Exporting Companies from the Developed and Emerging Markets Which Continue to Bribe Their Way into Winning Contracts, Says Transparency International. Tom Nevin Reviews Several Comparative Reports on the State of Africa's Economic Health
Nevin, Tom, African Business
This is the season, as the year ebbs, for all manner of institutions to field their findings on the state of global and individual economies--their honesty and forthrightness, whether they are worth doing business with and what you can expect if you do.
Predictably, emerging countries are given no quarter and are dealt with scathingly; on the other hand, however, those that are shown to be applying themselves and scoring better marks are commended accordingly.
A consensus of opinion holds that leading Western exporters are undermining development with dirty business overseas as bribery, business and competition are highlighted in the latest round of surveys. Foreign bribery by emerging export powers is also disconcertingly high.
"Overseas bribery by companies from the world's export giants is still common, despite the existence of international anti-bribery laws criminalising this practice," according to the Transparency International 2006 Bribe Payers Index, (BPI), the most comprehensive survey of its kind to date.
Transparency International (TI) is influential amongst investors and traders, especially those thinking of doing business with emerging markets, and those already there. The report issued by the Berlin-based anti-corruption watchdog on bribery to get business in foreign markets found that South Africa is the world's sixth most likely country to bribe. The Index surveyed 30 leading exporting countries and found that the main culprits are India, China, Russia, Turkey, Taiwan, Malaysia and South Africa, in that order.
The least likely countries to engage in graft for business were Switzerland, Sweden, Australia, Canada and the UK. The findings were based on interviews with more than 12,000 business executives from companies in 125 countries about the practices of foreign firms in their country.
A score of 10 indicated a perception of no corruption, while zero meant corruption was viewed as rampant.
"Companies from the wealthiest countries generally rank in the top half of the TI index, but still routinely pay bribes, particularly in developing economies. Companies from emerging export powers India, China and Russia rank among the worst. In the case of China and other emerging export powers, efforts to strengthen domestic anti-corruption activities have failed to extend abroad," says the report.
Notes TIs chairperson, Huguette Labelle: "Bribing companies are actively undermining the best efforts of governments in developing nations to improve governance, and thereby driving the vicious cycle of poverty. Respondents from lower income countries in Africa, for example, identified French and Italian companies as among the worst perpetrators." Labelle says it is hypocritical that OECD-based companies continue to bribe across the globe, while their governments pay lip-service to enforcing the law. The index maintains that developed countries are not doing enough to clamp down on overseas bribery. "The enforcement record on international anti-bribery laws makes for short and disheartening reading," says Labelle.
Rules and tools for governments and companies exist in UN-formulated legislation and have been introduced in many countries "but there are still major problems of implementation and enforcement", she says.
India consistently scores worst across most regions and sub-groupings. China is the world's fourth largest exporter and ranks as the second most serious offender.
"Foreign companies that commit the crime of bribery are undercutting Africa's anti-poverty efforts," says TI's regional director for Africa, Casey Kelso. "African countries should prosecute them vigorously. Regional development institutions such as the AfDB can help by enforcing debarment programmes that block crooked companies from profiting from development dollars while the poor are left out of the picture."
The TI's report points out that there is an active and growing international framework to address corruption in an increasingly globalised world. …