Little Movement in Latest Transparency International Rankings
Transparency International published its 2017 Corruption Perceptions Index (CPI) on February 21, 2018, showing modest improvements for most countries in Asia-Pacific. Some higher-risk countries, however, continue their downward slide in the overall rankings. We’ve included the Asia Pacific countries below and the full CPI is available at https://www.transparency.org/news/feature/corruption_perceptions_index_2017.
with co-author Nicholas Turner
The Big Picture
The corruption picture in Asia-Pacific remains largely unchanged, according to the latest CPI. Asia-Pacific remains a generally high-risk region for bribery and corruption overall. As with last year, there are five low-risk countries (New Zealand, Singapore, Australia, Hong Kong, Japan) and three medium-risk countries (Bhutan, Taiwan, South Korea) in the region, with the remaining 21 jurisdictions categorised as high-risk.
In reviewing the rankings, keep in mind that the 2017 CPI assessed the perception of public sector corruption for 180 countries and territories (compared with 176 in 2016 and 168 in 2015). This skews any straight trend line, as a small drop in country score can lead to significant movement in the rankings. Accordingly, companies operating in the region may find that a country’s raw score and its placement within the low-, medium- and high-risk groupings are more accurate indicators of perceived levels of corruption than relative rankings.
Better, But Still High-Risk
The 2017 CPI included some notable climbers: Timor-Leste (up 10 places), Nepal (up nine places), Myanmar (up six places) and Vietnam (up six places). North Korea, the only country in Asia-Pacific subject to a U.S. embargo and extensive UN sanctions, was the region’s most improved jurisdiction in terms of country scores, although it remains extremely high-risk for bribery and corruption, as well as money laundering, weapons proliferation and other nefarious activities. Indeed, despite their improvements, all of these countries remain high-risk for perceived corruption.
While still ranked a low-risk country, Australia continued its slide down the rankings, having lost eight points over the past six years (85 to 77) and cementing its position outside the top 10 (in 13th position for the third year in a row). However, Australia is in the process of strengthening its anti-corruption laws, which may help to arrest the steady decline.
The Maldives, which is facing ongoing political unrest and allegations of corruption against former President Mohamed Nasheed, fell 17 places between 2016 and 2017. The country was included in the CPI for the first time in 2016, debuting in the top 100 at 95th place, but is now ranked 112. Mongolia has fallen a total of 31 places since 2015, after falling 15 places between 2015 and 2016 and 16 places between 2016 and 2017. The country, which was once in the top 100 global rankings, is now ranked at 103. Laos, an ASEAN member state, was among the most improved countries in the 2016 CPI, but fell significantly this year from 123rd to 135th place, although its country score fell by only one point.
Others of Note
China continued its positive momentum in 2017, improving its country score by one point and its overall ranking by two spots after having jumped four spots in the 2016 CPI. The improvements suggest the Communist Party’s well publicized anti-corruption drive is continuing to improve the country’s perception, as measured by the CPI.
India, which was tied with China for 79th place last year, fell two spots in the rankings, while its country score was unchanged from the 2016 CPI.
South Korea stabilised in the rankings after sliding 14 places in the 2016 CPI, following the December 2016 impeachment of President Park Geun-hye. South Korea’s country score rose one point in the 2017 CPI, but the country still remains within just a few points of the high-risk category.
The CPI provides an important tool to analyse risk. Another tool to use in identifying risk is the 2017 TRACE Bribery Risk Matrix, which uses a different methodology and includes business bribery. See https://www.traceinternational.org/trace-matrix.
Companies doing business in Asia-Pacific can have a positive effect on market practices through the adoption and enforcement of strong internal anti-bribery and corruption policies and procedures and through pre-transactional due diligence and compliance remediation — backed by stringent contractual undertakings with counterparties.