SHAFAQNA- Turkey’s perceived corruption level has worsened the most out of all the countries in a global perceived corruption index in 2014, dropping by five points to 45, according to Transparency International (TI) on Wednesday.
Along with China and Angola, Turkey is perceived as increasingly corrupt, despite strong economic growth in recent years, according to TI, which on Wednesday called for closer international cooperation to root out graft and abuses of power. The Berlin-based organization published its 2014 Corruption Perceptions Index of 175 countries on Wednesday.
Underlining that perception of corruption is directly linked to the credibility, risk premiums and investment appetite of a market, observers on Wednesday warned that Turkey is increasingly becoming associated with graft and this bodes ill for future investments in the country.
“… the once great economic hope of many — Turkey — suffered one of the biggest drops in score …. Images of gold bars and millions of dollars stuffed in shoeboxes, coupled with incriminating videos, the firing or resignation of government ministers, multiple arrests and sadly, a number of suicides, topped the list of stories this year involving endemic corruption at the highest levels of Turkey’s business and government,” the TI report read.
“Too bad the government response was a crackdown on political enemies as well as thousands of police officers, prosecutors and regulators who were sacked or “reassigned”, and not the corrupt,” the report continued. TI said corruption and the mining disasters this year “has taken the shine off Turkey with its nearly double-digit growth rate now suffering a similar decline to its Corruption Perceptions Index score”.
Turkey’s Justice and Development Party (AK Party) was rocked by two sweeping graft investigations that went public on Dec. 17 and 25 of last year. Four then-Cabinet ministers lost their posts following the publicizing of the probes. The sons of three of the four ministers, including then-prime minister, now President Recep Tayyip Erdoğan’s son Bilal, were also allegedly implicated in the corruption investigations. However, shortly after the two probes went public, all the prosecutors and police officers on the investigations were removed from their posts. Both corruption investigations were dropped by the new prosecutors who were assigned to take charge in the place of those fired, raising concerns that the probes are being glossed over. Market experts say those outside of the country are much more aware of what is going regarding corruption in Turkey than locals are. This, they add, is because the government-controlled media has successfully managed to manipulate the Turkish public’s perception of corruption so far.
Turkish Finance Minister Mehmet Şimşek and Economy Minister Nihat Zeybekçi, along with the deputy prime minister responsible for economy, Ali Babacan, all avoided any comments on the survey on Wednesday. A Chinese government spokesperson, speaking on the same day, referred to the survey as “out of kilter” with her government’s achievements in their fight against graft.
TI issues an annual report measuring perceptions of corruption rather than actual levels, given the secrecy surrounding most corrupt dealings. It uses a scale where 100 stands for the most clean and 0 for the most corrupt.
Turkey likely to feel the heat further
According to Atilla Yeşilada, an economist with the New York-based Global Source Partners, serious corruption allegations at the highest bureaucratic levels and the government’s response risks Turkey being the subject of even more international condemnations regarding graft and dents the country’s global image further. “Corruption has heightened perceptions of political risk in Turkey remarkably over the past year and we should be more concerned about the political risk in the New Year, and foreign investors’ approach to Turkey than anything else,” Yeşilada commented. He asserted that the ongoing deterioration in Turkey’s image as an investment-friendly market will have adverse impacts on the economy in the medium term. “This [corruption] eats away at an economy like high blood pressure does to a patient. … it does not kill you in one day but makes you suffer for an extended period of your life,” Yeşilada opined.
Countries with increased corruption are perceived as threats to global economic growth and international institutions are trying to raise awareness on this issue, Professor Mehmet Altan at İstanbul University told Today’s Zaman, adding that Turkey should be prepared for more bleak reports by global monitors in the months to follow. “Corruption hinders healthy and free circulation of goods and services elsewhere in the world markets, and Turkey is not giving a good image here; attention is focused on us,” Altan said.
Both Yeşilada and Altan underlined that the Turkish government could manage the situation better and fight relatively more effectively with corruption had they been able to ward off a growing authoritarianism under the shadow of President Erdoğan.
An HSBC report back in January of this year said increased political risk premium may mean Turkey will have to live with a combination of higher interest rates and weaker lira than previously assumed. Separate global agencies have earlier said Turkey will remain a country with a steady growth potential, but also subject to volatility given its external and political vulnerabilities.
The Turkish Industrialists and Businessmen’s Association (TÜSİAD), often critical of government, said a survey released on Tuesday showed nearly half the business world expects corruption to increase. Prime Minister Davutoğlu’s chief adviser said late on Tuesday a majority of people believed corruption existed but the ruling AK Party had retained support because voters also believed the government was the victim of a plot. “To escape from the danger of a coup, people accepted putting up with corruption for some time more,” Etyen Mahçupyan said in an interview with broadcaster CNN Turk. “There were two evils and they had to choose. They made a rational choice.”
‘Corruption tantamount to risk of terror for many’
Increased corruption in a market has to be taken seriously, and many investors would believe graft is comparable to terrorism in terms of risks to future investments in a country, a Turkish daily quoted the chairwoman of Transparency International Turkey (TI Turkey) on Wednesday.
Oya Özarslan, the president of the board of directors of TI Turkey, told the Cumhuriyet daily on Wednesday that global investors follow developments regarding corruption in different markets very closely, adding that the latest TI index will serve as critical data for foreign entrepreneurs seeking to invest in Turkey.
Özarslan, speaking ahead of the release of the corruption index, said she quite often faces criticism and questions regarding the government’s social media bans (like those on Twitter and YouTube), media censorship and pressure in other fields whenever she travels abroad.
Despite the government’s prior cooperation with TI Turkey in terms of sharing relevant data on issues such as public spending, the office has complained of restrictions to its access to such information over the past year.
TI Turkey says the government is now less inclined to cooperate with the office in terms of information needed for public transparency reports. The frustration has grown so much that TI Turkey filed a lawsuit on Tuesday against a court order banning press coverage of a corruption investigation.
Last week a Turkish court banned media from reporting on a parliamentary investigation into corruption allegations against four ex-ministers, a move the opposition says amounts to protecting thieves. The ruling said the ban was imposed to “prevent damage to the individual rights” of the former economy, interior, EU affairs and environment ministers.
Officials hiding ill-gotten gains undermine corruption fight
Efforts to end corruption will be undermined as long as corrupt officials are able to hide their ill-gotten gains in other countries, Reuters quoted TI as saying on Wednesday upon the release of its annual corruption rankings.
TI said countries with lower rates of corruption in the public sector could help stop it elsewhere by doing more to prevent money laundering and the creation of secret companies, the Reuters report said. More than two-thirds of the 175 countries TI surveyed performed poorly, scoring less than 50 percent on its 2014 Corruption Perceptions Index.
The index — which is based on levels of public sector corruption as perceived by business people and country experts — rates countries from zero to 100 percent, zero being the most corrupt. TI Chairman José Ugaz said the index showed that economic growth and efforts to stop graft were undermined when leaders and officials abused their power by appropriating public funds for personal gain.
“Corrupt officials smuggle ill-gotten assets into safe havens through offshore companies with absolute impunity,” Ugaz said in a statement.
Denmark is seen as the least corrupt country in the world, topping the index for the third successive year, followed by New Zealand, Finland, Sweden and Norway. North Korea and Somalia came last, faring worse than Sudan, Afghanistan and South Sudan.
“Grand corruption in big economies not only blocks basic human rights for the poorest but also creates governance problems and instability. Fast-growing economies whose governments refuse to be transparent and tolerate corruption, create a culture of impunity in which corruption thrives,” said Ugaz.