Corruption puts democracies at risk, says report

Corruption is tightening its hold around the world with little sign that governments are doing enough to defeat it, according to a report yesterday.

Finland was first out of 102 countries for clean government, followed by Denmark, New Zealand, Iceland and Singapore. Britain came 13th, while the worst score went to Bangladesh in the report by Transparency International, the corruption watchdog.

The only bright spot was evidence of improvement in Slovenia and, to a less extent, Russia. The watchdog also argued that the Enron and WorldCom scandals in the United States were helping to focus attention on the need to address fraud and corruption in business.

The Berlin-based organisation gave countries marks out of 10 for quashing corruption and 70 per cent of those surveyed scored five or under. The picture looks especially bleak in Latin America, the former Soviet states and much of Africa.

"In the past year, we have seen setbacks to the credibility of democratic rule," said the group's chairman, Peter Eigen. "In parts of South America, the graft and misrule of political elites have drained confidence in the democratic structures that emerged after the end of military rule". The report is especially hard on Argentina, which has suffered an economic and political crisis. It says the former presidents Carlos Menem and Fernando de la Rua allowed the state to be "captured by a network of leaders which misuse it in the service of their business and political interests".

Among European Union countries, Greece ranked the worst at number 44 and Italy was ranked 31st, with Germany 20th, followed by Japan, Spain, France, Belgium and Portugal.

The corporate scandals in the US should be an incentive for countries and the UN to reinforce business ethics, Mr Eigen said. The collapse of Enron and WorldCom and the fraud involved exposed the "abuse of the power entrusted to executives by shareholders, employees and customers".