Sri Lanka’s elevated corruption perception needs immediate attention

Corruption is simply the use of power that has been given to you for your private benefits. The purpose of giving that power to you is to facilitate your serving others. But, instead of using it for that purpose, you use your power to earn an unearned remuneration. That you do at the cost of others which at the end will amount to a daylight robbery of their wealth

 

• A child’s guide to Corruption Perception Index

Monday, 31 January 2022

Aseni, whiz kid in economics, has been perturbed by the news that Sri Lanka’s corruption perception has been elevated in 2021 according to the Berlin-based Transparency International which compiles the global corruption perception annually. According to news, Sri Lanka’s corruption perception score has fallen from 38 in 2020 to 37 in 2021. As a result, its global ranking among some 180 countries has also fallen from 94 to 102. Aseni has learned at school that the existence of a corruption-free society is an essential ground level requirement for a country to attain a high economic growth and sustain that growth over the time. She wanted to probe into this and decided to ask her grandfather, Sarath Mahatthaya, an ex-official of the Ministry of Finance.

The following is the discussion that ensued between the two:

Aseni: Grandpa, it is hot news on every news channel that Sri Lanka’s position in the corruption perception index has worsened. Sri Lanka’s score has fallen from 38 in 2020 to 37 in 2021 pushing down its global ranking from 94 to 102. Who compiles this index and why corruption perception and not the actual corruption?

Sarath: This index, abbreviated as CPI, is compiled by Transparency International, an organisation fighting against global corruption and based in Berlin, Germany. This was started in 1993 by a retired World Bank official named Peter Eigen who had a firsthand experience in rampant corruption in East Africa. It had been a topic not spoken in public because it had been considered a taboo subject. Eigen teamed with nine other likeminded persons and established a small organisation to tackle corruption worldwide by studying, analysing, and exposing corrupt practices. This was the birth of the Transparency International. 

Their motto is that corruption should be fought globally as well as locally. That is based on the understanding that global revelations of corruption will help countries to fight corruption locally. If societies become transparent and not covered or opaque, they have a better chance of eliminating corruption. That is why Transparency International advocates for transparency in all public affairs.

Corruption is simply the use of power that has been given to you for your private benefits. The purpose of giving that power to you is to facilitate your serving others. But, instead of using it for that purpose, you use your power to earn an unearned remuneration. That you do at the cost of others which at the end will amount to a daylight robbery of their wealth. 

But that actual corruption cannot be measured unless those corrupt people are brought before justice. That happens very rarely in every society. Those who have power can protect themselves from the long arm of the law. That is why you read in papers stories of some powerful people brought before courts of law are being discharged due to lack of evidence or procedural weaknesses. But these corrupt acts are in the minds of people and lead to the formation of perceptions about the existence of corruption in society. Those perceptions are also as bad as actual corrupt practices. 

You will recall that an adage relating to old Roman society was that Caesar’s wife must be above suspicion. Therefore, what is being measured is the feeling which people have about corruption. That is called corruption perception. People form this perception through their experience over a long period of time. Hence, if the perception about corruption is high, the suffering of people is also high. That is because corruption saps their resources and condemns them to a life of uncertainty, inescapable fate, and deprivation of wealth. That is why perception is measured instead of actual corruption. 

To learn of perception, the Transparency International surveys a cross-section of citizens living in the respective countries. That includes people who are mostly affected by instances of corruption like businesspeople, ordinary people, and community leaders. In addition, the Transparency International uses the published reports by global bodies like the World Bank and the World Economic forum on corruption levels in these countries. CPI 2021 is calculated by using 13 different data sources from 12 different institutions that has knowledge of corruption perception in the country concerned during 2020 and 2021. Therefore, it is the outcome of a wide consultative process completed by Transparency International.

National governments whose scores are low and ranked among highly corrupted countries make objections to CPI when it is released without knowing how it is compiled. All they have to do is not to protest but to take action to change the opinions of their own citizens. They do not know that it is their own citizens who report on the perception of corruption to be used in CPI.

Aseni: How do they select those different institutions? Are there some key factors which they look at when selecting them?

Sarath: They do not select those institutions arbitrarily. There are some qualifications which they must meet. One is that they should be involved in quantifying the risk factors of perception of corruption in the public sector. Another is that they should regularly update their assessments. They should also be reputed organisations that use a reliable and valid methodology to assess the perception. They should also assess the corruption perception of a sufficient number of countries. Therefore, the Transparency International has built into its system only reputed organisations to get information needed. Two of the most important sources used for calculating corruption perception of Sri Lanka are the World Economic Forum, and the rule of law index of the World Justice Project. 

 

Its overall score as well as the ranking has worsened over the years. Therefore, Sri Lanka cannot ignore this worsening development anymore. It needs to tackle the issue at source by introducing effective measures to check on the instance of corrupt practices

Aseni: How is the score calculated? What does it mean?

Sarath: CPI is on the corruption perception in the public sector of the country concerned. It does not mean that the private sector is without corruption. The reason for concentrating on the public sector is due to its global impact on the lives and welfare of people. The private sector corruption is mainly localised and has a limited impact on people. 

Hence, CPI has captured the instances of bribery by people holding public office, diversion of public funds for uses not authorised, getting private benefits through public office, adhering to nepotism or unjustly remunerating relatives, and capturing of the state power for personal benefits. The country is given a score by the level of perception held by those who are being consulted. If a country has scored 100, that country does not have any corruption perception or is viewed as absolutely clean. If on the other hand, its score is 0, it is fully corrupt. In CPI for 2021, South Sudan has got the lowest score of 11. On the other end of the scale, three countries, Denmark, Finland, and New Zealand, have scored the highest. That score is 88. All other countries are in-between these two limits.

Sri Lanka’s score in 2021 is 37. On that score, it is ranked among 180 countries in the 102nd position. This is a fall in the score from 38 in 2020 and 94th position among other world nations in that year. But Sri Lanka’s performance in corruption perception during the last 10 years has been at this level. During the previous Yahapalana Government during which corruption was expected to be low, Sri Lanka’s score was between 37 and 38. Its ranking among other countries was between 89 and 95. What this means is that there has not been any change in the perception of the businesses and leading citizens about the public sector corruption. 

This is not an achievement about which Sri Lanka can be happy. Its ranking has become worse year after year. In 2012, it was ranked at the 79th position among other nations. After 10 years, it has slipped to 102nd position. This poor performance is like that of a student who has got two or three S passes at GCE Ordinary Level exam and who has been ranked toward the lower end of the students who have sat the exam. Year after year, the number of passes he gets at the exam comes down. Sri Lanka’s position is also like that. Its overall score as well as the ranking has worsened over the years. Therefore, Sri Lanka cannot ignore this worsening development anymore. It needs to tackle the issue at source by introducing effective measures to check on the instance of corrupt practices.

Aseni: What are those effective measures which Sri Lanka should take? Aren’t its existing measures strong enough?

Sarath: What is important is perception and people now have the perception that corrupt practices are condoned in Sri Lanka. That is why we have slipped in the score as well as in the ranking. There was an attempt at establishing a strong corruption fighting machinery in the country under the 19th Amendment to Constitution. But that has now been diluted under the 20th Amendment. What do you think will happen to perceptions of people, if the country’s bloodhound in eradicating corruption, the Bribery or Corruption Commission, comes before courts and tells them that its procedures were erroneous and therefore it does not propose to continue with the charges against the accused? 

True, its procedures would have been erroneous. But that admission has already done the damage to worsen the perceptions of people which cannot be eradicated easily. When this happens, it gives a wrong signal to those in power that they can always escape through the holes in the legal system. It is not good for corruption as well as corrupt practices. They become rampant eventually engulfing the whole society. When corruption is recognised as a socially acceptable practice, no one can stop the breeding of corruption.

Aseni: What can the rulers do about it?

Sarath: It is not only rulers who have to do the job. It is both rulers and society together that must take action. From the side of the rulers there should be commitment as well as demonstration of that commitment through words and deeds that they are for creating a corruption-free society. It comes from setting an example by the top in the government. Singapore’s corruption perception is very low and has been ranked among the second group of countries with low corruption perception. This has not been attained by that country overnight. It is through hard policy as well as hard action that they have attained that position. 

Aseni: How have the Singaporeans done that miracle?

Sarath: It is by dedication, commitment and example at all levels of the government. Singapore’s first prime minister, Lee Kuan Yew, in the second volume of his autobiography, From Third World to First, has elaborated in detail how it was done as a group. Their motto has been that they should show honesty and cleanliness in both personal behaviour and public life. 

To establish a clean government, it was necessary to apply the laws equally to everyone, both your party men and ordinary citizens. If you favour the first group, you lose credibility of your action and trust of the latter. That is why Lee and his team applied laws equally to everyone. For that purpose, the Corrupt Practices Investigating Bureau or CPIB, a relic from the British, was strengthened. To eliminate corruption among small people in the government, permit systems were abolished and clear guidelines as to how public service should be delivered to citizens. When this was transparent, citizens also who knew of their rights began to demand for quality and honest services from low level public servants. That was how corruption at low levels were eliminated. By dual approach of transparency and empowering the citizens.

To catch big fellows like ministers, special instructions were issued to CPIB. Corruption was redefined to include anything in value, and not necessarily a remuneration in money. As a result, if a minister received a free trip from a friend to a holiday destination or a place of worship, it was considered a corrupt practice. If you use this wider definition in Sri Lanka, you will see that almost all politicians should be out of job. Then, courts were empowered to treat as proof of corruption if someone has accumulated wealth beyond his means. What this means is that if a politician has accumulated property which he could not afford to have by his normal income declared to income tax authorities, he is considered as having received or accepted a bribe. This law was applied equally to ministers as well as to political opponents. 

Lee says that several ministers who were his close allies lost their job because of this equal treatment. But the advantage of that equal treatment was that Singaporeans as well as foreigners began to believe that in Singapore, fighting corruption is not just a promise but a serious business. The corrupt practices were applied not only to the minister concerned, but also to his spouses, children, close relatives and in laws. Lee says that when foreign companies knew of these tough laws in Singapore, and when some ministers or those who are close to them had asked for various favours, those companies reported such instances to CPIB. At the end, the ministers had to take responsibility for the actions of their allies and leave politics.

 

It is not only rulers who have to do the job. It is both rulers and society together that must take action. From the side of the rulers there should be commitment as well as demonstration of that commitment through words and deeds that they are for creating a corruption-free society. It comes from setting an example by the top in the government. Singapore’s corruption perception is very low and has been ranked among the second group of countries with low corruption perception. This has not been attained by that country overnight. It is through hard policy as well as hard action that they have attained that position

Aseni: What this means is that Sri Lanka’s political authorities should not only promise but also deliver those promises if they are truly interested in having a corruption-free society.

Sarath: With one correction. They should not only deliver their promise but also people should feel that they are delivering their promise as well. Remember in justice, the adage is that justice should not only be done, but also appear to be done. Hence, perceptions are more important than actual instances of corruption.

(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached atwaw1949@gmail.com.)