Corrected: Corruption creating humanitarian disaster-watchdog

BERLIN Tue Sep 23, 2008 6:52am EDT

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BERLIN (Reuters) - Corruption in poor countries has created a humanitarian disaster which threatens to derail the global fight against poverty, Transparency International said.

Releasing its annual Corruption Perceptions Index (CPI) on Tuesday, the anti-corruption watchdog said donor countries should address the problem by carefully targeting aid.

The index ranks 180 countries according to perceived levels of public sector corruption. The CPI scores countries on a zero to 10 scale, with zero indicating high levels of corruption and 10, low levels.

For the second year running, Somalia, Myanmar and Iraq received the poorest marks, with Somalia scoring 1.0 and Myanmar and Iraq scoring 1.3 each.

Denmark defended its ranking as the world's least corrupt nation, alongside Sweden and New Zealand. All scored 9.3.

Transparency International (TI) chair Huguette Labelle called the high levels of corruption in low-income countries a "humanitarian disaster."

"Stemming corruption requires strong oversight through parliaments, law enforcement, independent media and a vibrant civil society," Labelle said in a statement.

"When these institutions are weak, corruption spirals out of control with horrendous consequences for ordinary people, and for justice and equality in societies more broadly."

The Berlin-based watchdog estimated that unchecked levels of corruption would add $50 billion -- or nearly half of annual global aid outlays -- to the cost of achieving the United Nations' Millennium Development Goals on combating poverty.

It urged a more focused and coordinated approach by the global donor community to ensure assistance strengthens institutions of governance and oversight in recipient countries.

TI also singled out the performance of some wealthy exporting countries which saw their scores decline from 2007, saying continued evidence of foreign bribery scandals suggested a broader failure by developed nations.

It said statistically significant declines were seen in 2008 in Bulgaria, Burundi, Maldives, Norway and the United Kingdom, which saw its score dip to 7.7 from 8.4.

TI said the UK's anti-corruption credentials had suffered a setback following the December 2006 decision to discontinue a criminal investigation of British defense firm BAE Systems in relation to a contract in Saudi Arabia.

Significant improvements were seen in Albania, Cyprus, Georgia, Mauritius, Nigeria, Oman, Qatar, South Korea, Tonga and Turkey.

(For a table of the best and worst ranked countries double-click on or go to the TI website at www.transparency.org).

(Writing by Noah Barkin; Editing by Janet Lawrence)

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