Wednesday, July 26, 2017

Corruption index: an exercise in futility

Corruption is a serious issue in many countries in Southeast Asia, not least in Myanmar. This has been recognised by President U Thein Sein’s reformist government and highlighted in his major speeches. In late November the Ministry of Home Affairs issued a statement on the matter, adding that it was drafting new anti-corruption legislation to replace the current law, which dates from 1948.

Although this is all still very much work in hand, I was nonetheless at first surprised to find that Myanmar is again relegated to a very lowly position in the latest Corruption Perceptions Index (CPI) released on December 5 by Transparency International (TI). Myanmar occupies the 172nd place out of 176 countries reviewed compared with 180th out of 182 in 2011. But then I read that Samantha Grant, TI Regional Coordinator for Asia Pacific, had acknowledged to Chiang Mai-based The Irrawaddy that Myanmar’s reform process has not yet had any impact on its latest corruption ranking and that some of the information for the survey is two years out of date.

TI has so far given no explanation of why it decided not to seek out the latest information and provide an up-to-date assessment. I should have thought that Myanmar would merit special attention because of the unprecedented international interest in what is happening in the country. Myanmar is under intense scrutiny by governmental and non-governmental, legal, business, investment and sociological organisations who are working hard to provide their best analyses based on the latest information. We might well ask: Why did TI not do likewise? What is the point of including Myanmar in its rankings unless it is prepared to do the job properly? Indeed, when did TI last visit Myanmar? What in-country inquiries has it made?

It is important to read TI’s Frequently Asked Questions in order to understand exactly what its index represents. FAQ No 6 states that: “The CPI is an indicator of public sector corruption i.e. administrative and political sector corruption.” The CPI is accordingly not an indicator of how corrupt a country is perceived to be as a whole, taking both the public and private sectors into account. This is however how the TI index for Myanmar is likely to be interpreted by many who do not read the explanatory notes.

The latest detailed study of Myanmar by TI which I can find is dated March 23, 2009: “Overview of Corruption in Myanmar”. In this study, liberally sprinkled with US State Department references and which may still be the basis for its latest ranking, it says it has little information about the nature and levels of corruption in the country, but asserts on page two that “all sources and observers agree that rampant corruption pervades all levels of the political and administrative systems”. This absolutism is hardly consistent with what other responsible observers have noted.

As chairman of the Beta Mekong Fund, which in the 1990s completed a number of pilot investments in Myanmar through Asian principals, on no occasion was corruption an issue in any context. Nor have signs of corruption arisen in any accounts of current negotiations on investment and business contracts, including those of Myanmar-dedicated investment and advisory company, Bagan Capital, of which I am an adviser. TI has clearly been talking to the wrong people. I wrote to the authors of the report about a year ago, inviting them to study the reality on the ground in a rapidly developing situation. I received no response.