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Former USSR: Corruption Ranks As World's Worst, Says EBRD

  • Stuart Parrott



London, 3 November 1997 (RFE/RL) -- A new report by the European Bank for Reconstruction and Development says corruption in the Commonwealth of Independent States (CIS) is higher than any other region in the world.

Azerbaijan, Kazakhstan, Russia, Ukraine and Uzbekistan scored the highest ratings for corrupt public officials.

The EBRD'S corruption ranking is based on estimates by the London-based Economist Intelligence Unit and the DRI/McGraw Hill Global Risk Service. Both organizations are consultants who evaluate investment risks for potential foreign investors.

The Economist Intelligence Unit asked country experts to assess the "degree to which public officials are involved in corrupt practices" on a scale of zero-to-four (very low to very high). Among the 97 countries surveyed, 18 were former communist states that are making the transition to market economics. The average corruption score of these transition economies was 3.35 -- "higher than any other region in the world."

The report says: "All five CIS countries included in the survey (Azerbajian, Kazakhstan, Russia, Ukraine and Uzbekistan) received the highest rating -- a score of four -- for corruption among public officials."

DRI/McGraw Hill studied 21 transition economies in its analysis of 33 risk factors across 106 countries.

For the 12 CIS countries included in that survey, the average corruption score was 64 percent, "a level only slightly exceeded by the countries of sub-Saharan Africa." However, DRI/McGraw Hill's corruption scores for the East European and Baltic countries were substantially lower.

A recent country-by-country survey asked more than 3,600 entrepreneurs in 69 countries to respond to the following statement: "It is common for firms in my line of business to have to pay some irregular 'additional payments' to get things done."

Within the 10 CIS countries studied, 65 percent of respondents said this was frequently, usually or always true.

In this study, the regional average for the CIS was 15 percentage points higher than the next highest region -- sub-Saharan Africa -- and 24 points higher than Latin America.

The entrepreneurs also were asked if they could predict in advance how much they would have to pay in bribes if they wanted "to get things done." The respondents in the CIS countries reported "a level of predictability of corruption nearly twice as high as any other region with the exception of Eastern Europe."

The entrepreneurs were asked to respond to a second statement: "If a firm pays the required additional payment, the service is usually delivered as agreed." More than 80 percent of the respondents in the CIS and Eastern European nations tended to agree this was the case.

The EBRD report suggests that the "remarkably high levels of corruption in transition economies" reflects a high degree of uncertainty about government policies towards the market.

It says: "Managers especially in the CIS appear to rely on corruption -- transactions they regard as relatively predictable and credible -- as a means of hedging against the risks associated with the instability of government policy, much as they did under central planning."

The EBRD says governments in transition countries need to improve the predictability of their policy decisions if they want to reduce the underlying causes of widespread corruption.
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