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2006 Corruption Perceptions Index (CPI)

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The 2006 Corruption Perceptions Index is a composite index that draws on multiple expert opinion surveys that poll perceptions of public sector corruption in 163 countries around the world, the greatest scope of any CPI to date. It scores countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption.


The Transparency International Corruption Perceptions Index ranks countries in terms of the degree to which corruption is perceived to exist among public officials and politicians. It is a composite index, a poll of polls, drawing on corruption-related data from expert and business surveys carried out by a variety of independent and reputable institutions. The CPI reflects views from around the world, including those of experts who are living in the countries evaluated. Transparency International commissions the CPI from Johann Graf Lambsdorff, a university professor based in Passau, Germany.


For the purpose of the CPI, how is corruption defined?

The TI CPI focuses on corruption in the public sector and defines corruption as the abuse of public office for private gain. The surveys used in compiling the CPI ask questions that relate to the misuse of public power for private benefit, for example bribery of public officials, kickbacks in public procurement, embezzlement of public funds) or questions that probe the strength of anti-corruption policies, thereby encompassing both administrative and political corruption.


Having given you some background information, I hereby announce that in the Corruption Perceptions Index for 2006, Malaysia achieved 5 points of a maximum 10 and is ranked at 44th place of 163 economies in the Index.


In 2005, Malaysia achieved 5.1 points and was ranked 39 of 158 economies.


This indicates that Malaysia’s points are marginally lower but she fell 5 spots – although the number of economies in the Index also increased by 5.

Economies that fell significantly in ranking includes Brazil which fell 8 spots to 70th place, Israel which fell 6 spots to 34th and the USA which fell 3 spots to 20th.


Improved economies include India (gained 18 spots to 70th), Japan (gained 4 spots to 17th) and Turkey (gained 5 spots to 60th).


In terms of the CPI 2006 Asia Pacific regional rankings, of 25 economies in the Asia-Pacific region ranked, Malaysia is 10th regionally.


In the region, those ranking above Malaysia were typically either more developed economies e.g. Australia and Japan or much smaller city-states e.g. Singapore and Hong Kong.


Significantly, Malaysia managed a higher ranking than virtually all her competitors for foreign direct investment (FDI) e.g. Thailand, China, India, Vietnam, Philippines, Indonesia etc. This seems to indicate that the CPI may not be as important in terms of FDI attractiveness of an economy as we may sometimes believe.

Rather it is arguable that the degree of transparency, consistency and complexity of government policies and regulations may be equally as important, if not more so.


Let me caution you; the CPI is not a fully objective and fool-proof indicator of the level of corruption in a given economy but rather a snapshot of the perceived levels of corruption in a given economy based on the responses to the various surveys that go towards the construction of the CPI. The CPI measures “perceptions” which may or may not correspond exactly with the real situation on the ground but to the extent that it gives a guide to the corruption level in a given economy, it is a useful tool for governments, businesses and civil society alike, to gauge the degree of graft in an economy and consequently, its attractiveness as a foreign direct investment destination.


Malaysia’s weakened ranking is quite disappointing considering the many new initiatives taken by Prime Minister Abdullah Ahmad Badawi’s government to combat corruption and enhance transparency and efficiency in the public delivery system.


These include the establishment of the Malaysian Institute of Integrity, the formulation of the National Integrity Plan and the stated policy of greater transparency and efficiency in the public services delivery system.


Part of the problem is the time lag between the formulation of new policies and the actual implementation of these policies on the ground. This gap must be closed.


There is also much that needs to be done in terms of increasing transparency and accountability in the public delivery and procurement processes.


Further, the complexity and opaqueness of the approving and licensing procedures of various statutory and local authorities leaves much room for improvement.


TI-Malaysia calls upon the government to act firmly without fear or favour against all parties that abuse their power and take part in corrupt practices.


TI-Malaysia, on our part had in recent years been involved in various activities including international workshops on the public procurement processes. We have also worked to spread the message of transparency and integrity by holding forums and briefings on the matter.


In February next year, TI-Malaysia will with ASLI jointly organize the World Forum on Transparency and Integrity in Kuala Lumpur.


TI-Malaysia will increase its efforts to educate all sectors concerned on the importance of making integrity and transparency an integral part of our national character so that Malaysia may progress quicker and the people are guaranteed a higher standard of living and better quality of life.


Corruption is debilitating and a scourge on that keeps a nation from achieving its fullest potential and inhibits growth and equitable income and wealth distribution.


The fight against corruption must be a combined effort of all Malaysians and not just the task of government. We must all rally around the Prime Minister’s stated strong stand against corruption and strengthen the government’s hand to root out all corrupt and abusive practices in the public as well as private sector. Corruption must be eradicated if we are to achieve the noble objectives of 2020 and give our people a better standard of life.


Issued by
Tan Sri Ramon V Navaratnam
Transparency International Malaysia