TRANSPARENCY International will be releasing its 23rd annual Corruption Perceptions Index (2020 CPI) on Jan 28 at 12.45pm via live streaming on Zoom.

The index ranks 180 countries by their perceived levels of public sector corruption.

The CPI is the leading global indicator of public sector corruption, offering a yearly snapshot of the relative degree of corruption by ranking countries from all over the globe.

Malaysia’s ranking in the Corruption Perceptions Index (CPI) 2019 jumped 10 places up to rank 51, compared with 2018 where it ranked 61 out of 180 countries surveyed.

It scored 53 points compared with 47 points in the 2018 index. There was a significant improvement both in ranking and score in 2019, which was also the country’s best score over the last seven years.

A country’s rank indicates its position relative to the other countries in the index. The smaller the ranking, the less corrupt a country is perceived to be.

On the other hand, the country’s score indicates the perceived level of public sector corruption on a scale of zero (highly corrupt) to 100 (very clean).

Thus, countries with a higher score will rank much higher in position (as being less corrupt) compared with lower scoring countries.

The CPI is a poll of polls, a composite index that combines data and a range of surveys done by business people from around the world, including local experts and analysts working in the countries evaluated.

Malaysia is using 9 out of 13 secondary sources to calculate CPI.

The data sources used to compile the index include questions relating to public sector corruption, or certain aspects of public sector corruption including:

  1. Bribery.
  2. Diversion of public funds.
  3. Use of public office for private gain.
  4. Nepotism in the civil service.
  5. State capture.
  6. The government’s ability to enforce integrity mechanisms.
  7. The effective prosecution of corrupt officials.
  8. Red tape and excessive bureaucratic burden.
  9. The existence of adequate laws on financial disclosure, conflict of interest prevention and access to information.
  10. Legal protection for whistle-blowers, journalists and investigators.

Based on criteria included from their external sources, the following aspects are not captured in the CPI:

  1. Citizens’ perceptions or experience on corruption.
  2. Tax fraud.
  3. Illicit financial flows.
  4. Enablers of corruption (lawyers, accountants, financial advisers, etc.).
  5. Money laundering.
  6. Any type of private sector corruption.
  7. Informal economy and markets.

Globally, Denmark has reclaimed its ranking as the least corrupt country in the world in the international survey. Transparency International’s CPI for 2019 gave Denmark a score of 87 points out of 100, and it shares the first spot with New Zealand out of 180 countries.

New Zealand and Denmark have a longstanding reputation as countries with little corruption in the public and private sector.

The countries which scored the lowest were Somalia and South Sudan.

Somalia ranked 180 with a score of nine on the 2019 CPI. South Sudan ranked 179 with a score of 12 points.

There is a high likelihood that the CPI 2020 rank for Malaysia will drop, but with no statistically significant changes in their score. This is due to political instability, a weak economy and lack of good governance.

Corruption is the abuse of entrusted power. It is incumbent for the government and public to strengthen our corruption prevention measures to curb the scourge.

Malaysians, particularly politicians and civil servants, must be more aggressive in assisting to curb corruption.

The CPI is based on the elite’s perceptions rather than objective data. Therefore, the business elite’s perception are the key ingredients of the CPI.

However, the effects of the Malaysian Anti-Corruption Commission’s (MACC) arrests directly affect the CPI positively.

The arrests by MACC also create an indirect positive vibe that changes the public perception on corruption.

The CPI has increasingly become a highly-regarded and influential survey of good governance as well as a key marker in international efforts to fight corruption.

Furthermore, studies show that there is a correlation between CPI standing and economic growth.

CPI standing can influence the rate of foreign direct investment, as investors increasingly recognise the evils of corruption and stay away from countries that are perceived to be corrupt.

Indeed, the CPI is a helpful and known tool to measure corruption. It is an indicator to inform the public at large whether corruption continues to plague the country.

However, the CPI’s criteria are the best in the absence of an alternative, better tool.

Capturing the perceptions of those in the elite position of the public sector is the most reliable method of comparing relative corruption levels across countries. Sometimes reality can be worse than perception.

In the end, how a country responds to a poor CPI rating indicates whether a government is serious about dealing with such a social and political disease.

The writing is on the wall for Malaysia — our slide indicates things are getting worse.

Will the government address the issue?

The writer is President, Malaysia Association of Certified Fraud Examiners

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