February 19, 2010
By Richard Lu
Transparency International (TI) publishes an annual Corruption
Perceptions Index (CPI) according to “the degree to which
corruption is perceived to exist among public officials and
politicians”.
Corruption is best described as “the abuse of entrusted power for
private gain”. The maximum score or index is 10 and a country
with a high score is “perceived” as being least
corrupt. In 2009, Singapore was placed No. 3 after New
Zealand and Demark with an index of 9.2.
Just in case we go away with the notion that we have arrived,
readers must understand how the index is derived and why it is
controversial and not accepted as an accurate measure of
corruption.
Firstly, the CPI is derived from a compilation of surveys that ask
businessmen and analysts, both in and outside the countries they
are analyzing, their perceptions of how corrupt a country is.
The index therefore relies on third-party surveys that may be
potentially unreliable. Data vary widely because of the
different methodologies used, the completeness of the surveys and
different samples employed every year.
Secondly, the laws of each country vary and so is the enforcement
process. Therefore the actual number of corruption cases in
each country cannot be an accurate measure.
Thirdly, corruption happens behind the scenes and hence the
difficulty in its detection.
The survey is controversial although it does not lack
objectivity. TI receives criticisms over the years. The CPI
authors reply to criticisms by reminding the users of the data that
the CPI is meant to measure perception and not “reality”.
The results are therefore difficult to evaluate due to the constant
moving of the goal posts and yardsticks used. What is
important to note is that “perceptions matter in their own right,
since… firms and individuals take actions based on
perceptions”.
Statistics like the CPI in itself is not accurate. By looking
at the index over a few years, the year-to-year changes in a
country’s result and the samples and methodology used, a perception
of a country’s performance can be obtained. This means that a
change in perception of corruption of a country would only emerge
in the index over longer periods of time.
Although the CPI is put out by Transparency International it is an
irony that it does not measure the “transparency” of a government
or government-linked businesses and activities e.g. GLCs, sovereign
wealth funds, statutory boards. Singaporeans will never know
what goes on in say the GLCs, Temasek Holdings, GIC, People’s
Association, etc.
Thus we will never be told how Temasek Holdings’ CEO Ho Ching
appointed this “special adviser”, the former SGX CEO Mr. Hsieh Fu
Hua; why was he appointed, what are his terms of engagement, what
is his remuneration, etc.
Is this a retirement job or a reward for his faithful service as
CEO of SGX? Wasn’t there a head-hunt for the
appointment? What makes him so eminently qualified that
a position was created for him immediately after his stint as CEO
of SGX? Really, to be transparent and accountable, the
answers to these questions must be forthcoming and released
quickly.
Temasek Holdings must ultimately belong to the people of Singapore
and must be accountable to the people of Singapore. The
sooner the people in charge of Temasek Holding realize this, the
better. This is not a perception like the CPI but a
reality. Singaporeans want and demand transparency and
now. Will they (the people in charge) not see this?
By the way, we should not be shouting or crowing about the fact
that we are third after New Zealand and Demark on the TI list of
least corrupt countries. The Government must not bask in this
fact and feel that there is no need to be transparent or
accountable at all. Whilst we may least corrupt, we may also
be the least transparent of countries and this perception is not a
good one.
http://www.temasekreview.com/2010/02/19/temasek-holdings-transparency-a-perception/