India among most corrupt nations

Corruption has become as way of life across the world, costing global economies billions of dollars every year.

Transparency International's (TI) Global Corruption Report 2009 shows how bribery, price-fixing cartels and undue influence on public policy undermine fair competition, stifle economic growth and ultimately undercut a business's own existence.

About half of international business executives polled by TI estimated that corruption escalated project costs by at least 10 per cent.

The report reveals that consumers around the world were overcharged approximately $300 billion through almost 300 private international cartels discovered from 1990 to 2005.

In developing countries alone, companies colluding with corrupt politicians and government officials have supplied bribes estimated at up to $40 billion annually, according to TI.

Companies with anti-corruption programmes and ethical guidelines are found to suffer up to 50 per cent fewer incidents of corruption and are less likely to lose business opportunities than companies without such programmes.

Check out what Infosys chairman N R Narayana Murthy has to say on corruption. . .

Infosys chairman N R Narayana Murthy's take on corruption

'Corruption erodes the pillars of business success: it means cutting corners and shirking honest competition rather than producing real, competitive value for clients; it means compromising corporate and individual integrity, deterring and demotivating the brightest and most innovative entrepreneurs and scientists from signing on; and it means consenting to, and propping up, a business environment in which complicity is for sale, entrusted public power is routinely abused for the sake of private gain, and public trust in the beneficial partnership between business and society is gradually undone.

Infosys, the company that I founded with little more than $250 in seed capital, has always taken a strong and principled position to resist the temptation of corruption.

We passionately believed that our commitment to both customers and communities meant that illegal short cuts were never an option. We were confident that our values would prevail and, indeed, help us excel in the marketplace. Our hopes proved justified.

Today, Infosys is one of the largest, most respected and most trusted players in the global information technology and services arena. Far from disadvantaging us, our anti-corruption stance has been a driver for sustainable growth and performance.'

Let us now take a look at India's standing in the world vis-a-vis corruption.

India

India is ranked 19th in the Bribe Payers' Index with a score of 6.8, out of 10. The higher the score for a country, the lower the likelihood of companies from that country engaging in bribery when doing business abroad.

In terms of degree of corruption the score 10 is 'highly clean', while score 0 is 'highly corrupt'.

Respondents ranked companies from India, Russia Mexico and China as those most likely to engage in foreign bribery.

About 30 per cent of respondents indicated that companies from India are likely to bribe low-level public officials to 'speed things up'.

India ranks 85th out of 180 countries in the Corruption Perception Index, with a low score of 3.4.

Now, take a look at the least corrupt countries in the world. . .

Belgium and Canada are the least bribe payers according to the Bribery Index.

Both have a score of 8.8 in the Bribe Payers' Index. So companies from Belgium and Canada are regarded as the least likely to engage in bribery while doing business abroad.

About 16 per cent of respondents considered that Belgian companies 'often', or 'almost always', use familiar or personal relationships to win public contracts.

About 10 per cent reported that the use of familiar or personal relationships is 'often' engaged in by Canadian companies when operating abroad.

In the Corruption Index (as opposed to the Bribe Payers' Index), Belgium is ranked 18th with a score of 7.3, while Canada is ranked 9th with a score of 8.7.

Netherlands and Switzerland with a score of 8.7 are next on the Bribe Payers' Index.

About 7 per cent of respondents reported that companies headquartered in the Netherlands 'often' engage in bribery to low-level public officials to 'speed things up' when operating abroad.

In the Corruption Index, Netherlands is ranked 7th with a score of 8.9, while Switzerland is ranked at 5th position with a score of 9.

Germany with a score of 8.6 is next in the Bribe Payers' Index.

The findings of the 2008 BPI show that many of the world's most influential economies continue to be viewed as greatly compromised by foreign corruption.

Japan and the United Kingdom share the same rank with a score of 8.6 in the Bribe Payers' Index.

Japan is ranked 18th with a score of 7.3 in the Corruption Index, while the UK is ranked 16th with a score of 7.7.

Australia comes next with a score of 8.5 in the Bribe Payers' Index. In the Corruption Index, Australia is ranked 9th with a score of 8.7.

The different types of bribery include:

• Bribery of high-ranking politicians or political parties;
• Bribery of low-level public officials to 'speed things up'; and
• The use of personal or familiar relationships to win public contracts.

TI therefore calls on governments and the private sector to renew their efforts to curb the supply side of corruption.

The United States, France and Singapore have the same score of 8.1. They are followed by Spain with a score of 7.9 on the BPI.

The US (score 7.3) is ranked 18th in the Corruption Index, France (score 6.9) is ranked 23rd and Singapore (9.2) is ranked 4th in the Index.