Multinationals fuel graft in poor states-watchdog

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BERLIN, Sep 26 (Reuters) Multinational companies and financial institutions that use bribery and tolerate illicitly gained wealth are helping fuel corruption in the world's poorest countries, a global corruption watchdog said today.

Berlin-based Transparency International (TI) said in its latest corruption perceptions report that while poorer countries should tackle their own graft problems, richer states are also responsible, and often to blame.

''Bribe money often stems from multinationals based in the world's richest countries. It can no longer be acceptable for these companies to regard bribery in export markets as a legitimate business strategy,'' the report said.

The survey, compiled from surveys covering 180 countries and territories, ranked them according to perceived levels of corruption among public officials and politicians.

Somalia and Myanmar shared the lowest score of 1.4. At the other end were Denmark, Finland and New Zealand, prized for fair judiciaries and transparent public finances, with 9.4.

Global financial centres play a central role in allowing corrupt officials hide and invest funds, TI said, citing the example of Nigeria and the Philippines, where officials looted millions of dollars.

''Criticism by rich countries of corruption in poor ones has little credibility while their financial institutions sit on wealth stolen from the world's poorest people,'' Akere Muna, TI Vice Chair, said.

Forty per cent of countries scoring below three, which indicates corruption is perceived as rampant, are classified by the World Bank as low income countries, TI said.

War-stricken countries such as Afghanistan, Iraq and Sudan have also deeply suffered from rampant corruption and are at the bottom of the table, TI Chair Huguette Labelle told Reuters.

She said even efforts to rebuild countries devastated by violence through large infrastructure projects also make them particularly vulnerable.

''This is a very ripe area for corruption as everybody tries to get these lucrative contracts and are more inclined to try to put money under the table,'' she said.

''Corruption manufactures poverty, it seeds violence and it destabilises countries dramatically.'' The report said significant progress had been made in some African countries including Namibia, Swaziland and 2010 World Cup host South Africa, thanks to genuine anti-corruption efforts and political reform.

The European Union accession process has also helped countries like Romania tackle corruption, TI said.

REUTERS JK RN1448

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