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#Financial Crime Prevention

Corruption: the perception and the reality

International Compliance Association

corruption , Corruptions Perceptions Index , Transparency International

The Transparency International ‘Corruptions Perceptions Index’ published annually, offers a glimpse of global corruption based on perceived levels within the public sector of 183 countries. The Index is a funny thing, loved in some quarters and loathed in others, but still an interesting perspective on where various nations stand compared to others on the issue of corruption. Some results are not surprising; North Korea and Somalia are ranked joint bottom on the list.


Last week Indonesia hit the news in a number of ways for its corruption linked problems. The former treasurer of the ruling party, Muhammad Nazaruddin, is currently in court facing corruption charges. After he fled the country last year, he implicated a number of other senior officials in the party, and the coalition government, of also being involved in the wide ranging scandal.


Bloomberg Businessweek also ran a piece on Indonesia, with a heavy focus on the President, Susilo Bambang Yudhoyono, and his efforts to reduce corruption in the country. Corruption issues in Indonesia are well known and oft discussed, but the current government has been putting serious effort into combatting the negative image. Cases involving the treasurer of the ruling party clearly do not help the issue.


Indonesia is ranked 100 out of 182 on the Perceptions Index, compared to a ranking of 14 for Germany. As you will be aware, the President of Germany has just stepped down due to a corruption scandal surrounding a ‘dubious’ loan for a property. Although the position of President is largely ceremonial, this is still a huge issue in Germany, the powerhouse of Europe and the country at the forefront of helping to solve the European debt crisis.


In reality, will these cases affect the ranking of these countries in the Perceptions Index? For Germany, maybe not; it is still seen, largely, as a ‘clean’ country, and even though in recent years it has faced a number of corruption scandals (Siemens, for example), it still ranks at 14 on the list. Indonesia, on the other hand, is likely to suffer more. Not only are there large scale cases of corruption which are visible and becoming increasingly well reported, the smaller, more direct cases are the place where the ‘perception’ really hits home.


I was in Indonesia last week and suffered at the hands of corrupt officials twice in a period of three days. This underlying current of corruption becomes so ingrained in the local society that their view is that all government officials are corrupt. Whilst this is by no means true, these types of issues highlight why some countries fare poorly on the Perceptions Index; the local population believes that nearly everyone is involved in corruption in some form. And so when this survey is carried out, the population report their negative perceptions.


But let’s not get carried away with all of these cases; corruption is all around us. It is hard to quantify, as it is often hidden, hence the use of ‘perceptions’ for the index. If you look hard enough, though, you can find it, from Indonesia, to Germany, and beyond. And if you think about it for a while, there is every chance you have been caught up in it too, whether you wanted to be or not.


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