Thanks to the on-going furore surrounding FIFA and its endemic corruption, global corruption has been hogging the spotlight much more than usual, with Britain’s Prime Minister David Cameron calling for a crackdown on the “cancer” of global corruption. Cameron has emphasised not only the “burden” of corruption on businesses (corruption is estimated to add 10% to business costs world-wide; one trillion dollars are paid in bribes every year based on World Bank figures), but also the threats corruption poses to national security and, of course, to economic development. One company, Verisk Mapelcroft, has seemingly responded to the call, compiling a list of the world’s most corrupt countries.
Corruption: Contributing Factors
The company, which analysed the economies of 198 countries to determine the extent of corruption in different countries, reveals that the most corrupt countries in the world are located in the developing countries in Sub-Saharan Africa and the Middle East. Trevor Slack, an analyst at Verisk, suggests that “factors such as weak rule of law and a lack of institutional capacity” contribute to corruption levels, together with “entrenched systems of patronage”. Other factors which undermine efforts to crackdown on corruption are the exposure to corrupt public servants and a higher “reliance on third party agents”, he says.
Verisk scored and ranked the countries based on the prevalence of bribery and the performance of the different economies in combatting corruption, using a variety of data and information sources. A staggering 73 countries were identified as being extremely corrupt. Read on for the top 10 most corrupt countries in the world.
1. Democratic Republic of Congo
According to a damning report by Transparency International, DR Congo’s corruption remains “entrenched” despite president Kabila’s (pictured above) repeated declaration of his commitment to fighting it. Attempts to combat corruption are hindered by a “complex web of political patronage” that pervades the country.
In a 2013 article that didn’t mince its words, the Wall Street Journal described Somalia’s corruption as “rampant” and a hindrance to the countries that “bankroll” the country. Somalia remains blighted by allegations of systemic corruption and its links with Islamic militants.
3. Central African Republic
This poor country is, ironically, rich in natural resources. Central African Republic’s development has been held back by rampant corruption, a famously brutal dictatorship under Jean Bedel-Bokassa and numerous coups. Add to the decades of political instability, sectarian and ethnic violence – it’s little wonder that corruption continues unchallenged in one of the world’s “least developed” countries.
Few would be surprised at Sudan’s entry in this list. It’s president, Omar-al Bashir (pictured above), has been described by Politico as the “world’s most wanted war criminal and mass murderer”.
5. Equatorial Guinea
Under President Mbasogo’s (pictured above) regime, Equatorial Guinea has been blighted by widespread corruption, human rights abuses and poverty, that is the verdict of Human Rights Watch in its 2014 World Report. The country’s vast oil revenues appear to be for the benefit of only the ruling elite, whilst the rest of the population live in abject poverty.
6. South Sudan
South Sudan is the world’s newest country – it was created in 2011 – yet it has already been ravaged by extensive corruption and a civil war which led to the death of many tens of thousands of people.
Based on Transparency International’s Annual Corruption Perception Index (CPI ranking), South Sudan is now one of the most corrupt countries in the world, ranking 171st out of 175 countries.
7. North Korea
The 2015 Index of Economic Freedom has a few things to say about North Korea’s corruption: the country is a "closed society"; an "unreformed dictatorial state"; "a modern, independent judiciary does not exist”; “bribery is pervasive” and “corruption is endemic".
According to Transparency International’s CPI ranking, only five countries are more corrupt than Iraq: Somalia, North Korea, Sudan, Afghanistan and South Sudan. Bribery and corruption is pervasive at every level of society and often goes unchecked because “government officials are benefitting from it”.
According to the Fiscal Times, Afghanistan’s progress has been hampered by corruption and fraud. This is despite the US’s ploughing over a hundred billion dollars into the country to boost its infrastructure and economy. The country’s domestic revenue has “plummeted”, largely due to theft, according to the Fiscal Times.
Libya’s oil wealth accounts for most of its revenue, yet those who oversee its oil affairs stand accused of “financial improprieties” and “economic mismanagement” according to the FT.
Although anti-corruption enforcement actions by governments are becoming tougher, for investors, identifying patterns and levels of corruption and assessing the anti-corruption efforts of individual governments must be an imperative, given the enormous costs and burdens it poses to the success of their businesses.
Do you have a comment on this article? Add it to the box below.