Malaysia slips in 2011 Corruption Perceptions Index

Bad news, corruption perception levels in Malaysia worsened instead of getting better. Corruption is highly correlated with bad Corporate Governance: countries that have low levels of (perceived) corruption also tend to have a high level of Corporate Governance and vice versa.

Interesting comments are:

  • The CPI results show that the leaders and public institutions were not doing enough to combat corruption, especially “grand corruption”, it said

  • These results indicate that day-to-day bribery at the lower levels or “petty corruption” is being addressed.

In Corporate Governance cases I see the same trend, some smaller companies are tackled hard (but fair) these days (with even multi-year prison sentences for some directors), an encouraging trend and a real deterrent.

But sorely missing are cases against large companies, high-profile corporate leaders and financial service providers (investment bankers, auditors, valuers etc.). And their behaviour hasn't always been lily-white either.

http://www.theedgemalaysia.com/political-news/197114-malaysia-slips-in-transparency-intl-corruption-perceptions-index.html

Written by theedgemalaysia.com, 1 December 2011.

Malaysia slipped four places to 60th spot out of 183 countries in Transparency International’s (TI) Corruption Perceptions Index (CPI) 2011 from 56th last year.

The report, which was issued in conjunction with the worldwide launch of the Transparency International CPI on Thursday, said for the third consecutive year, Malaysia had shown a decline in its CPI score.

“Its 2011 score of 4.3 is slightly lower than the 4.4 recorded in 2010, and is significantly lower than the government’s benchmark of 4.9,” said TI-Malaysia.

Although the CPI decline for the last two years is marginal (0.1 for 2010 and 2011), the lack of improvement in Malaysia’s CPI ranking is a cause for concern, said TI-Malaysia.

While the government has launched a number of initiatives to address corruption including recently the Corporate Integrity Pledge for the business sector, the CPI results show that the leaders and public institutions were not doing enough to combat corruption, especially “grand corruption”, it said

“Elements of state capture which facilitate ‘grand corruption’ are still prevalent. These include the continuing and snowballing practice of awarding mega projects and contracts without open tenders or competitive bidding, limited access to information which contributes to a culture of secrecy and lack of transparency, allegations of inflated pricing in military purchases and the continued close nexus between business and politics in Malaysia,” it said.

TI-Malaysia said Malaysia’s 2011 Corruption Barometer results were about the same as last year’s.

It said that 40% of the public perceived that corruption levels have stayed the same over the past three years, and “will remain the same for the next three years”.

TI-Malaysia said the police and political parties have been identified as the most corrupt institutions, with the police as the most frequent recipient of bribes in the past 12 months.

On a positive note, it said the percentage of respondents who had paid bribes has encouragingly plummeted from 9% in 2010 to 1.2% this year.

In addition, almost 50% of the respondents continue to believe that the Malaysian government is effective in fighting corruption.

TI-Malaysia said this exceeded the government’s benchmark of 38%. These results indicate that day-to-day bribery at the lower levels or “petty corruption” is being addressed.