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/
If the old one not willing what can the nation do