If they are really serious about improving their foreign direct investment stature, the GCC countries cannot overlook the recent Corruption Perceptions Index in which their rankings have come down considerably.
All Gulf Cooperation Council (GCC) countries except for the UAE suffered a drop in ranking in the 2012 version of the Corruption Perceptions Index (CPI). Berlin-based Transparency International issues the annual report by ranking countries, this time a total of 174 nations, based on perceived corruption.
The index is produced based on data generated from numerous surveys and assessments, in turn carried out by some 13 internationally renowned establishments, the World Bank, the World Economic Forum and The Economist Intelligence Unit, to name a few. These surveys and assessments look into matters such as bribery of public officials, kickbacks in public procurement and embezzlement of public funds – certainly serious matters.
Reviewed economies earn points on the basis of perceptions expressed by business and academic professionals concerning ways of doing business in various countries. The respondents, who include local and expatriate residents, provide views about possible corruptive practices involving public officials about winning business preferences such as contracts. This suggests that the report is not entirely objective as respondents express their perceptions subjectively.
The CPI boasts a scale from zero to 100 points; as such, countries scoring below 70 marks are required to assume actions to help bring integrity in the dealings of public officials. Against this assessment, all GCC countries need to carry out reforms. However, Qatar and the UAE, the best performers, scored 68 points, just below the differentiation line. Notably, the UAE managed to advance by a single to clinch a global ranking of 27, a position shared with fellow GCC state of Qatar. However, this meant Qatar conceding five notches in a single year, a considerable contraction. This puts Qatar and the UAE ahead of some European Union (EU) members, including Spain and Portugal.
In effect, the UAE’s performance is indicative of the appreciation of entities doing the surveys and assessments of government efforts in combating wrong practices. The authorities seem determined to stamp out improper financial and administrative practices, thanks in part to increasingly relying on e-government services. Unfortunately, Bahrain saw its ranking fall by seven notches to position No 53 globally, thereby more than reversing gains made in the 2011 report. In fact, this level of performance is one of the worst in record for Bahrain, having secured ranking 27 in the year 2003 at the height of comprehensive reforms initiated by the authorities. True, Bahrain maintained its status as the third best performer in the GCC, having overtaking this position from Oman in 2011. However, the retreat represents a setback to the country’s efforts in streamlining its image following the outbreak of the socio-political crisis in February 2011.
Yet, Saudi Arabia, Oman and Kuwait experienced considerable drops in their rankings. For its part, Oman dropped by 11 notches to ranking
No 61, certainly a cause of concern for the authorities. Kuwait saw its position plummet by 12 positions, the worst among GCC countries. One can hope that new parliament, only elected last week, would address the challenge of shaking up the image of misuse of public office.
Likewise, Saudi Arabia needs to overcome its image headache, having dropped by nine notches, and thus sharing with Kuwait the 66th global ranking. Undoubtedly, this kind of standing does not fit the largest economy among the GCC and Arab economies at large. Certainly, GCC states cannot overlook the significance of CPI while seeking to attract foreign direct investment.