Middle East and North Africa: Holding Public and Private Corruption Accountable

Middle East and North Africa: Holding Public and Private Corruption Accountable

Since December 9th was "International Anti-Corruption Day", global watchdog Transparency International encouraged dialogue over Twitter using the meme #StoptheCorrupt. Unfortunately, it was hard to track down the few tweets from the Arab World, specifically using the meme #StoptheCorrupt, who responded to the TI report.

In early December, Transparency International, a German-based non-profit, shared its yearly assessment of countries' public sector corruption, 'Perceived Corruption Index.' English and Arab media commented on the weaker performance of the MENA region compared to other regions.

"Perceived" makes sense given that corruption negatively affects business, just as business negatively affects government all in the name of "getting things done." Also, corruption goes beyond the government sector too. As UN Secretary General Ban Ki Moon wrote, "Corruption is also rife in the world of sport and business, and in public procurement processes," in a Daily News Egypt op-ed. More on this point to follow.

Out of 177 countries, none of the Middle East and North Africa countries ranked in the top 25. Here is a sample of where some MENA countries ranked in 2013:

  • United Arab Emirates - 26th
  • Qatar - 28th
  • Israel - 36th
  • Turkey -53rd
  • Bahrain-57th
  • Oman - 61st
  • Saudi Arabia - 63rd
  • Jordan - 66th
  • Kuwait - 69th
  • Tunisia - 77th
  • Morocco - 91st
  • Algeria - 94th
  • Egypt - 114th
  • Lebanon - 127th
  • Syria -168th

We see two unexpected results and one really surprising trend: a) Syria actually is perceived to have less corruption than Libya -- despite Libya's numerous political transition efforts; and b) Kuwait has fallen in its government corruption score since 2003.

Syria is notorious for certain elites dominating public sector finances and reaping the benefits. For example, Rami Makhlouf -- also known as "Mr. Five-Percent" -- dominates Syria's banking sector, which requires government oversight. He represents a classic case of government-private sector collusion, or corruption, right? This type of destructive relationship may be outside the purview of TI's measurement, nonetheless, this type of corruption is what really hampers economic growth because a citizen is forced to participate in a corrupt political process just to get paperwork filed.

On the second result, Kuwait has dropped in its TI ranking -- but more importantly, in its score. Earning a score above 5.0 is decent. But, last year, Kuwait earned and ranked 66th with a score of 4.4. In 2011, it ranked 54th with a score of 4.9 -- which means Kuwait performed better in 2011 than in 2012! Progress means improving over time, not performing worse. Although some improvement was noted in 2009, at one point, Kuwait scored a 5.3 in 2001. But now, Kuwait's ranking is the worst among its Gulf Cooperation neighbors -- including Bahrain, which continues to deny the political reform that its citizens have demanded since 2011 when protests started. What is happening?

The surprising trend is that Israel, which used to have the best CPI score, or lowest public sector corruption, has now fallen behind -- not one -- but two other MENA countries (the United Arab Emirates and Qatar). In 2003, TI began included GCC countries, like UAE and Qatar, in tracking feedback on corruption. At that time the UAE and Qatar ranked below Israel and the rest of its GCC neighbors. Looks like they both increased their scores over the last 1- years. The question is not just "how did they do it." But the better question is: do their own populations perceive the same improvement? Because if their own populations are less optimistic about the improvements, then foreign investors will eventually take notice.

Holding Public and Private Sectors Accountable
Ban Ki Moon is right: perceived government corruption is only one character is corruption fight story. Unlike TI, The Global Financial Integrity considers corruption in the commercial sector and tracks 'illicit financial flows.' Not to diminish TI's work, which is important in the fight against corruption, but GFI's measure shows that other types of corruption play out in countries, like the UAE. Remember, how the UAE outperformed the other dozen MENA countries? Note that between 2002 and 2011, the UAE ranked in the top 25 (12th) as over 11 billion dollars of illicit money left its country. Tracking other types of corruption in different sectors reframes the stronger performers listed in the above discussion.

Look Beyond the Scores and Track the Watchdog Groups
Do not be deceived by Tunisia's downgraded CPI ranking. First, Tunisia is one of the early MENA countries TI has been tracking while including more surveys -- which cuts down on the chances of inflated scoring. (See scores from 2002 to 2013.) Second, and more importantly, an opening into corrupt public sector practices is underway because of Tunisian civil society. Watchdog groups like I WATCH Tunisia and The Tunisian Association look at the problem, and not just the aftermath. Preventing corruption is as important as fighting corruption. As Le Economist Maghreb points out, the Tunisian Association calls on legislation to clarify "conflict of interests" as well as require public officials to disclose finances and property before and after elections.

Given that the path of the investigative journalism intersects that of the fight against corruption, some Arab countries are moving in that direction. Jordan's El Gad newspaper focuses on investigative reporting too. Tunisia serves as a positive example of journalism calling out shady practices within government and business sectors--especially when the two sectors corrupt one another through money-laundering. The Tunisia Association has recommended creating a legal framework for this particular type of journalism. They are calling on legislation to protect watchdogs and whistle-blowers who are needed in order to help journalists root out corruption.

This is a great combination of steps moving in parallel. The fact that local media coverage mirrors watchdog group efforts, despite its country's lower ranking, means that they are dealing with the problem. It is much harder for courts to dismiss corruption cases when civil society knows what is taking place because they will get angry at inaction. Look beyond the yearly scores and track the watchdog groups. The story is not always about what the outside parties perceive, but what the country's citizens believe.

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