Sunday, July 15, 2012

The Perception of Corruption and the Ease of Doing Business in Syria

Since the situation in Syria does not seem to be improving, I thought I'd take a look at an aspect of the country that  might be of interest but doesn't receive a lot of mainstream media coverage; the perception of corruption among public officials and processes and the ease of doing business in the Syrian Arab Republic.

First, let's look at the perception of corruption in Syria.  Transparency International, a politically non-partisan organization that was formed in 1993 to take a stance against corruption around the world in an effort to see that the daily lives of people are free of government and business corruption, publishes an annual Corruption Perceptions Index.  This index ranks countries based on their perceived levels of public sector corruption.  Data is gathered using surveys and assessments including questions about bribery of public officials, kickbacks in public procurement, the embezzlement of public funds and looks at the efficacy of government anti-corruption efforts. 

Transparency International's Corruption Perceptions Index is a score out of ten, with ten being a perfect score (i.e. very little corruption in the public sector) and a country rated at zero being perceived as having a highly corrupt public sector.

The top three scores (the least corrupt nations) in the world are:

1.) New Zealand (9.5)
2.) Denmark (9.4)
3.) Finland (9.4)

The bottom three scores (the most corrupt nations) in the world are:

182.) Somalia (1.0)
181.) North Korea (1.0)
180.) Myanmar (1.5)

As a frame of reference, Australia comes in tied for 8th place with a score of 8.8, Canada comes in 10th place with a score of 8.7, the United Kingdom comes in  tied for 16th place with a score of 7.8 and the United States comes in 24th place with a score of 7.1.

Now, back to Syria.  Syria comes in 129th place out of 182 nations with a score of 2.6.  How does this compare to its Middle East and North African neighbours?  Here is a graphic showing the continuum from Qatar (the best in the area coming in 22nd place with a score of 7.2) to Iraq (the worst in the area coming in 175th place with a score of 1.8):

Among Middle Eastern and North African countries, Syria comes in ahead of the aforementioned Iraq as well as Libya (168th place at 2.0) and Yemen (164th place at 2.1) but scores slightly lower than Iran (120th place at 2.7) and Egypt (112th place at 2.9).  Saudi Arabia, the major economy in the area, scores a relatively respectable 4.4 (57th place).

Here is a screen capture of part of Transparency International's world map showing the Corruption Perceptions Index with the darker red nations being the most corrupt and the yellow-coloured nations being perceived as less corrupt:

The International Finance Corporation, part of the World Bank, ranks doing business in Syria as follows:

Note that the ranking is out of 183 economies around the world.  Notice that the issue of enforcing contracts, an issue that always concerns international traders, comes in at 175th place out of 183.  It takes an average of 872 days from filing of a sale of goods dispute lawsuit until actual payment is received as shown here:

Notice that this is nearly 360 days or one year longer than what a similar action would take in an OECD economy and over 200 days longer than it would take, on average, in other Middle East and North African nations.

Let's close with one last graphic.  Here is a bar graph showing the ease of doing business in Syria compared to other economies in the area with the lowest scores being the most business-friendly economies:

In light of the recent conflict in Syria, my suspicion is that during 2012, it has become even more difficult and far riskier for anyone interested in doing business in the Syrian Arab Republic.  It will be interesting to see how dramatically the situation changes if, and when, the Assad clan is unseated.

1 comment:

  1. Thanks for the good collection of resources on this business ethics topic.