Wednesday, October 27, 2010

Iraq Ranked Fourth Most Corrupt Country In World

On October 26, 2010 Germany’s Transparency International released its 2010 Corruption Index. This year’s survey included 178 countries. Each nation was given a rank from highly corrupt 0 to highly clean 10 based upon different sources. For the second year in a row Iraq was ranked the fourth most corrupt country in the world. It received a score of 1.5. Somalia was the most corrupt at 1.1. Myanmar and Afghanistan were tied for second with a score of 1.4.

Since the 2003 invasion Iraq has slipped farther and farther down the Corruption Index. In 2003 Iraq was number 20. It went down to number 17 in 2005, up to 22 in 2005, and then fell all the way to number three in 2006. 2007 Iraq received its worst ranking at number two. It then rose to number three in 2008, and has stayed at number four this year and last.

Iraq’s Ranking In Corruption Index 2003-2010

2003 #20
2004 #17
2005 #22
2006 #3
2007 #2
2008 #3
2009 #4
2010 #4

A review of some of the major corruption stories this year shows why Iraq has such a low ranking. In September 2010 an appeals court dropped the case against former Trade Minister Abdul al-Falah al-Sudani even though it’s believed that $4-$8 billion went missing from his ministry. That was part of the country’s long tradition of not prosecuting any high officials for wrongdoing. In May, three state-run banks made $7.7 billion in illegal, off the book loans to three private banks. In April, Karbala’s provincial council accused the Trade Ministry of buying expired food for the ration system, which is the largest in the world. There’s also the fact that Iraq lacks adequate bookkeeping of its finances, records of most of its petroleum production, and has massive oil smuggling, all of which facilitate and encourage theft, bribery, and fraud. As long as all the major political parties benefit from stealing from the government they run, this sad state of affairs will continue.


Transparency International, “Corruption Perceptions Index 2010,” 10/26/10


Anonymous said...

There was quite a spirited analysis of the CPI and Iraq's ranking here - The author doesn't try to say that there is no corruption in Iraq, but that its ranking in the CPI bears closer examination. The last sentence, about perceptions of security, was absolutely spot on.

Joel Wing said...

Yes that article came out a little bit before the Transparency International report was released. I see what he's saying, but I think if they used more sources, especially ones from Iraq, they would find that Iraq is just as corrupt as the TI ranking says it is.

Some examples.

1) The author wrote: "However, earlier this month, in a report co-authored by TI that assessed transparency in the oil, gas and minerals industries, Iraq was ranked number 13 out of 41 resource-rich countries and well ahead of its Middle Eastern neighbours."

The report linked in that comment said that Iraq provides information to the public about its revenue from oil. That's true, each month the Oil Ministry releases export numbers, revenues numbers, etc. The problem with that is that the Oil Ministry actually has no idea how much is actually produced because there is no standardized measurement system nor nationwide meters installed, and there's also large scale oil smuggling going on. More importantly, reporting how much money is earned and how much oil is produced, says nothing about corruption.

2) "Rather than focusing solely on attempts to improve the accuracy of measuring corruption, efforts should shift to outlining strengths and weaknesses of institutional frameworks by assessing the effectiveness of anti-corruption mechanisms within the legislative, judicial and executive bodies. "

The Integrity Commission, the main anti-corruption agency in Iraq releases numbers each year on its cases. It likes to say that each year it has issued more arrest warrants, but when you look at convictions and who gets thrown in jail the numbers are paltry. No high-ranking official has never been punished. The latest example was the case being dropped against the Trade Minister even though it's estimated that $4-$8 bil disappeared from his ministry. The Integrity Committee is able to bust some low level cops and bureaucrats and that's it. There is absolutely no commitment to actually tackle corruption within the government.

3) "In summary, none of the three sources that make up Iraq’s CPI score draw on the “experience and perceptions of those who see first hand the realities of corruption” in Iraq given that neither local businesspeople or resident experts contribute to the assessments. This poses a serious problem given that the perceptions of non-resident experts are often shaped by the same third party sources. It is also astonishing that the CPI should rely on surveys and reports that are particularly brief and general in their assessment of corruption."

Here's the result of a survey just conducted by the International Republican Institute in June 2010

Is government corruption better or worse? 10% better, 62% worse

Overall, if the author wants to complain that Iraq has such a low ranking based only upon 3 sources I understand. I think if more sources were added however, Iraq would still be down at the bottom.