Malaysia has climbed up three places in the Corruption Perceptions Index (CPI) table for 2014. It was ranked 50th out of 175 countries, while in 2013, it was ranked 53rd out of 177 countries. Malaysia scored 52 points in the CPI score, two more points better than they did in 2013.

The worldwide launch of the 2015 CPI will be on Jan 27, 2016 simultaneously in over 120 countries.

This index of measurement in essence calculates the level of perception of corruption in the public sector and therefore relates the perception on the abuse of power in the public sector for personal gain. Such perception enhances our understanding of real levels of corruption from one country to another.

The CPI is a composite index which makes use of surveys done by business people from around the world, including experts living and analysts working in the countries evaluated.

The indexing is done by independent, reputable institutions via credible sources using diverse sampling frames and different methodologies. The following sources are used to calculate CPI for Malaysia:

1. Bertelsmann Foundation’s Transformation Index

The Bertelsmann Foundation’s Transformation Index is based on expert assessments on the state of transformation management performance and economic system in the surveyed countries. In relation to corruption, the experts are asked to assess to what extent are public officeholders prevented from abusing their position for private interests and does the government successfully prosecute, penalise and prevent corruption?

2. Economist Intelligence Unit’s Country Risk Rating

This is a global research and advisory firm that produces business intelligence and financial exposure for policy-makers worldwide. On assessing corruption, it uses these following questions:

  • Are there any clear procedures and accountability governing the allocation and use of public funds?
  • Are public funds misappropriated by ministers/public officials for private or political party uses?
  • Are there special funds for which there is no accountability?
  • Are there general abuses of public resources?
  • Is there a professional civil service or are large numbers of officials directly appointed by the government?
  • Is there an independent body auditing the management of public finances?
  • Is there an independent judiciary with the power to try ministers and public officials for abuses?
  • Is there a tradition of paying bribes to secure contracts and gain favours?

3. IMD’s World Competitiveness Year Book

The International Institute for Management Development (IMD) is a top-ranked business school with headquarters in Geneva and bases around the world. It has a survey that measures the competitiveness of nations, rank and examines how a nation’s socio-political and economic climate affects corporate competitiveness. For corruption, survey respondents are asked as follows, “Bribing and corruption: Exist or do not exist.”

4. Political and Economic Risk Consultancy Asian Intelligence (PERC)

PERC is a consulting firm involved in strategic business information and analysis for companies doing business in East and Southeast Asia. Local and expatriate business respondents were asked whether they perceive corruption as being a problem in certain positions or institutions.

5. World Bank - Country Performance and Institutional Assessment

This survey is the assessment of the bank’s staff on economic management, structural policies, social inclusion and public sector management of countries eligible for aid from the International Development Association. They assess transparency, accountability and corruption in the public sector.

6. World Justice Project’s Rule of Law Index

The World Justice Project is a non-profit organisation committed to promoting the rule of law, opportunity and equity around the world. As for corruption, the local experts are asked to assess whether government officials in the executive, judicial branch, the legislature, the police and the military misuse public office for private gain.

7. World Economic Forum’s (WEF) Executive Opinion Survey

The WEF is an independent non-profit organisation which engages businesses, leaders and academics to shape global agendas. The survey is an annual survey of business executives.

For corruption, respondents are asked to rate how common the diversion of public funds are to companies, individuals, or groups due to corruption connected to the following: Imports and exports, public utilities, annual tax payments, awarding of public contracts and licensing and obtaining favorable judicial decisions

8. Global Insight’s Country Risk Ratings

This rating is a global information company providing services covering macroeconomics, country risk and individual sector analysis in 30 countries. The ratings assess a broad range of corruption - from petty bribe-paying to higher-level political corruption - and the scores assigned to each country are based on a qualitative assessment of corruption in each country.

As for corruption questions, experts are asked to assess whether corruption exists and whether it affects operational activities for businesses such as obtaining business permits and favourable policy and planning decisions.

Studies showed that CPI can influence the rate of investment and the economic growth of a country as more and more investors recognise the evils of corruption. Indeed, the CPI is a helpful tool to measure corruption and tell us whether it continues to plague the country.

And how we respond to a poor CPI rating also indicates whether a government is serious about dealing with this social and political disease.

AKHBAR SATAR is president of Transparency International-Malaysia (TI-M).