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Worldwide corruption on the rise as public trust plummets – report

RT | July 10, 2013

A report by Transparency International has revealed the extent of worldwide corruption over the last two years, with Israel and Greece showing the highest levels among developed countries. Politicians are considered the most corrupt among all sectors.

The Global Corruption Barometer 2013, conducted by the Berlin-based anti-corruption watchdog, is a sampling of over 114,000 opinions of people from 107 countries. The survey asked participants about corruption and the institutions engaged in it.

The report shows that corruption numbers have increased over the last two years, along with the number of people exhibiting distrust toward their governments and law enforcement agencies.

Before the 2008 financial meltdown, 32 per cent of people believed their governments to be effective at tackling corruption. That figure has now fallen to just 23 per cent. Transparency International said in a press release that the report “shows a crisis of trust in politics and real concern about the capacity of those institutions responsible for bringing criminals to justice.”

The survey asked participants to rank the corruption levels of various institutions from 1 to 5, with 1 being “not corrupt at all” and 5 being “extremely corrupt.”

Political parties were perceived to be the most corrupt institutions worldwide, scoring 3.8 out of 5. Police forces came in second place with a score of 3.7. Public officials, civil servants, and the parliament and judiciary came in third place, scoring 3.6.

The media came in ninth place, although it was voted to be the most corrupt sector in Britain. The UK media has lost the respect of many residents in recent years – around 69 per cent of survey participants now believe the media is corrupt, compared to just 39 per cent in 2010.

“This very sharp jump is in large part due to the series of scandals around phone hacking, the Leveson Inquiry, and the concentration of media ownership,” said Robert Barrington, head of the British wing of Transparency International.

Business and private sectors, along with the healthcare sector, came in at eighth on the corruption scale, with the education system not far behind. The military and NGOs took the 10th and 11th places.

Although religion came in last place on the corruption scale, it still ranked among the most corrupt in certain countries, including Israel, Japan, Sudan and South Sudan.

Of all OECD members surveyed, the corruption levels of Greece and Israel came in first and second place respectively, with their political and cultural institutions ranking at the top of the corruption meter.

Over 80 per cent of Israelis believe that one must have contacts very high up in the public sector in order to get anything done. Transparency International says it sees “deep-rooted failures of governance” in Israel. A similar figure was seen in Lebanon, Russia, and Ukraine.

Arab countries have seen a rise in corruption since their 2011 uprisings, although public anger against corrupt officials was what sparked the Arab Spring in the first place. The expectation of having cleaner, more transparent regimes did not match the countries’ political and business realities.

Of the four countries that experienced regime change in the aftermath of the Arab Spring, Egypt, Tunisia and Yemen feel that corruption has only increased since 2011. While 64 per cent of Egyptians think corruption is on the rise, a staggering 80 per cent of Tunisians believe that to be the case within their country. Eighty-four per cent of Lebanese citizens believe corruption to be on the rise in within their nation, while only around half of Libyans believe that corruption is worsening.

Egypt leads the pack in anti-police sentiments, largely because police violence has injured so many people over the past year. The 80 per cent disapproval rating dropped to only 45 per cent when Egyptians were asked about the military, which just several days ago ousted former Islamist-backed president Mohamed Morsi.

To glean more analysis on the increasing slide into corruption and public distrust of political institutions, RT talked to Finn Heinrich, who is director of research at Transparency International in Berlin. He sees the world as split into two major trends. The first is petty corruption and bribery in the southern hemisphere – mostly Africa, where citizens feel there is no other way to take care of one’s day-to-day needs. The second is corruption on a more official level, which is witnessed in the northern and western parts of the world – mainly in business and politics governed by financial greed.

As a way out of the situation, Heinrich believes “you really need to be in it in a long-term. You can’t expect quick gains from the fight against corruption. So, I think what we see in many of those countries are the upheavals which you find in many countries, including many post-communist countries, after revolution where old systems are no longer intact and new systems are yet to be built. So, corruption is on the rise. We hope that the new leaders, compared to their predecessors, are really taking the challenge of setting up systems of transparency and accountability much more serious.”

Heinrich thinks that only an integral and comprehensive effort can last, and that effort must include both the government and its citizens.

Transparency International is the world’s foremost organization on fighting corruption. It has 90 chapters worldwide, which aim to raise awareness and establish methods of tackling corruption and measuring its harmful effects.

July 10, 2013 Posted by | Corruption | , , , , , , , , | Leave a comment

There is an alternative: what Venezuela can teach us about the banking sector

Revolution is eternal | February 16, 2012

The year is 2008. In the US the housing bubble has burst, leaving major financial institutions with a large mess on their hands. It will always be remembered as a time of failing banks, the ‘credit crunch’, plummeting stock markets and declining trade worldwide. The causes of the financial meltdown are a complex interplay of forces, but at the core of the issue is Wall Street’s greed and risk-taking, as well as a failure on the part of regulators and the financial market to prevent the situation from exploding. The end result on the world economy has been nothing short of disastrous. Since 2008 we have seen too many reports of famine, joblessness and uprisings (after all, these things tend to be related).

So what steps were taken to “rein in the excesses of Wall Street?” Well, governments and central banks handed out bailouts to poorly performing financial institutions of a magnitude never seen before.

We have come to normalise the reckless disregard for human life so characteristic of the banking sector. We could have walked down many different paths to deal with the financial crisis – so what else could we have done?

In Venezuela the government takes a very different approach to the banking sector. For example, there is a law in place that means that at least 10% of a bank’s lending should support development projects. President Chavez has recently threatened to nationalise the banks that are not delivering on this. The Venezuelan government wants to see more loans going to support small farmers rather than just going to big businesses. “Either you finance agricultural production or we will take measures. There is no alternative,” Chavez has said. And the irrefutable warning, “If you can’t do it, give me the banks.”

Chavez has made similar threats to the commerce sector, having angered the business community by imposing regulations that will guarantee a fixed maximum price on basic consumer goods. This is to avoid the price of goods being driven up by speculation, the catastrophic effects of which were seen in the Horn of Africa last year. Speculation on the world food market helped to fuel the widespread famine that endangered millions of people.

Venezuelan businesses have predictably complained about the new price fixing measures, calling them “unviable” for business as usual. But rather than balking at the first hurdle, Chavez has said he will seek investment from outside the country if the companies are not able to deliver within the new constraints. It seems that in Venezuela they are unwilling to let big business hold the country to ransom.

Lets take a case study in the UK for comparison – the Royal Bank of Scotland (RBS). Consider this worrying timeline:

2009: the UK government provides an unprecedented bailout to banks, and now officially owns 84% of RBS

2010: bonuses totaling almost £1 billion were paid to top executives of RBS, despite reporting losses of over £1 billion in the same financial year

2011: the massive drop in the price of RBS stocks meant that UK taxpayers lost £26 billion on the value of their investment

2012: there was much controversy over the £1 million bonus offered to the RBS Chief Executive.

Luckily for the UK taxpayer, the RBS Chief Exec turned down the £1 million bonus following intense pressure. But the government could have demanded this of him in the first place. Why didn’t they? The tired old argument of “we don’t want top people or businesses to leave the country” just doesn’t fly in the face of 2.7 million unemployed people in the UK and cuts to much needed welfare payments and disability allowances.

If Venezuela can teach us anything, let it be that:

It is possible to take a stand against ugly business practices

It is possible to expect our banking and commercial sectors to make a positive contribution to the world

There is no better time than right now

January 3, 2013 Posted by | Economics | , , , | 5 Comments

   

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