Dear Editor,
Allow me to add a perspective on your report of Feb. 16: “One-point rise on corruption index no cause for celebration – Goolsarran”. The former Auditor General made two important conclusions: (a) The CPI does nor “reflect lived reality” and (b) Guyana is still languishing in the CPI “basement”. This letter shows why he’s factually correct on both, but, more important, its main purpose is to examine why governments must not dismiss this index that contains tremendous information value.
Public corruption usually involving illegal and hidden activities that are notoriously hard to uncover and verify with objective data, and, for this reason, the index is designed to capture perceptions of actual corruption. No index is perfect and the CPI is a blunt instrument to measure actual corruption. But even a blunt knife is better than none, and can cut through hard butter or a tough steak. Tracked over time, the index serves as a useful indicator of evolving corruption and as a powerful tool to highlight institutional reforms (this point becomes clearer later),
Let’s start with point (a). Guyana CPI has been inching up, its fastest pace during 2015-2020 followed by a stall out, even some worsening, and this period coincides with a dramatic change in government after the PPP/C had been in power for 33 years. Certain actions by the new government, in fulfillment of “anti-corruption”, and “strong governance” messaging, seem to have improved public perception. This pattern is not unique to Guyana as one can find many examples such as Malaysia (2018); Indonesia (1998), Armenia (1998), Georgia (post-2003) and so on. It is no coincidence that Guyana stopped advancing after 2020 when it became a petrostate, which created new governance issues that did not exist pre-2020. Against this backdrop, let’s see why Mr. Goolsarran makes a valid point. Any one-year change in the CPI doesn’t say much (same for any index). It’s the long-run that matters and the CPI is very faithful in rewarding long-run institutional credibility (emphasis on credibility). Clearly, the noticeable improvement in perception proved short-lived, indicating that the “facts on the ground” did not match up, which may have led to some severe discounting in perceptions after 2020.
Now, point (b). Why is it that Barbados (and Bahamas) are in the 60-70 range, whilst Guyana (and Trinidad) are essentially at the 40 mark. No accident. These island economies rely on their international financial centres for growth, so that successive governments have, as their core economic policy, that of keeping the country “clean”, although there have been lapses, to be fair. Whereas, Guyana and Trinidad rely on natural resources (oil and gas) for which reputational risk like “clean” public sector is less important, at least for taking immediate government corrective actions. After 100 years of producing oil and gas, Trinidad is still at the 40 mark, whilst facing an uncertain economic future with O&G almost depleted.
It is often claimed that the CPI is biased, favouring Western countries compared to developing countries. False claim: many rich western countries have fallen or scored lower than expected (USA, Italy, Greece, etc.). But many developing countries have improved dramatically (Botswana, Rwanda, Bhutan, Georgia, etc.)
I circle back to Barbados because it has lessons for Guyana. Barbados benefits from a reputation of long-standing “clean governance”. Lacking natural resources but reliant on services and human capital, Barbados has no choice. So it makes deliberate and methodical efforts to achieve and hold on to that brand. CPI reflects institutional reputation built up steadily over decades. Once a country is perceived as “clean”, it takes major scandals to shift perception downward. But once a country is perceived as “higher risk”, it takes sustained reforms to move perception upward. That perception also attracts the “wrong” types of economic actors, investors and investments.