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Kuwait most corrupt GCC state: 2009 Corruption Index 17, November 2009

Posted by thegulfblog.com in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, The Emirates.
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(Saudi: Red. Kuwait: Purple. Bahrain: Green. Oman: Orange. UAE: White. Qatar: Blue)

2004 2005 2006 2007 2008 2009
Qatar 38 32 32 32 28 22
KAS 71 70 70 79 80 63
Bahrain 34 36 36 46 43 46
Kuwait 44 45 46 60 65 66
UAE 29 30 31 34 35 30
Oman 29 28 39 53 41 39

Transparency International have released their 2009 index of perceived corruption around the world. The above graph and table show how the GCC states fare on the latest rankings in comparison to previous years.

Whilst Saudi Arabia has made the largest improvement jumping up some 17 places, as it did this from such a low base I feel that Qatar’s 6 place improvement from 28th to 22nd is just as (and if not more) impressive. For Saudi Arabia, it is good to see them make such advances. As I have discussed before, their relatively good placing in the ‘East of Doing Business’ tables can only be maintained if they get a serious grip on their somewhat endemic corruption problems. A rise of 17 places suggests that someone in Riyadh is thinking much the same thing.

As for the other GCC states, the UAE improved a not enterily unimpressive 5 places to 30th place, Oman rose a negligable place to 39th, Bahrain dropped 3 places to 46th and Kuwait dropped a place to 66th leaving with them with the dubious title of the GCC’s most corrupt member state.

Improvements in the Emirates have taken them back to where they were back in 2005. The effect of the credit crunch is unlikely to have been fully appreciated in this survey so – either which way -I expect a sizable change next year too. Bahrain are now 10 places higher (in a bad way) than in 2005-6. Of all the GCC states, they can least afford to become some quasi-corrupt backwater: they need to address these difficulties quickly. Kuwait, as I have discussed on several occasions, currently operates under the false assumption that they do not need foreign investments. As such, they may well not really care too much about their poor score. Yet now that they are rock-bottom of the GCC table and are fully 20 places worse than they were 4-5 years ago, perhaps they may seek to redress this balance, yet, given their institutional/governmental paralysis, their anti-foreign investment mindset and their apparent belief that oil will last forever, I doubt this very much.

Relative competitiveness in the GCC 7, November 2009

Posted by thegulfblog.com in Bahrain, Oman, Qatar, Saudi Arabia, The Emirates, The Gulf.
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ppoint slide

Here’s a slide taken from a survey of business attitudes in the Middle East. As you can see, it shows what business men and women think about which country in the GCC is leading the way, in their opinion, in terms of 1) making government more business friendly, 2) strides being made in legal reform, and 3) strides being made in educational reform.

In such a poll I would have expected the UAE to be the number one, but not necessarily as far ahead as they are. I would also have expected to have seen Qatar a bit higher up. These results broadly follow what Transparency International with their corruption perception index and Doing Business with their ‘ease of doing business in…’ index conclude.

Country Ease of Doing Business in…Index 2008 Corruption Perception Index 2008
World Ranking GCC Ranking World Ranking GCC Ranking
Qatar 39 4 28 1
UAE 33 3 35 2
Saudi Arabia 13 1 80 6
Bahrain 20 2 43 4
Oman 65 6 41 3
Kuwait 61 5 65 5

Things to note about these statistics:

  • Qatar is well placed: highest in region for lack of corruption and moderately placed in terms of ease of doing business.
  • Saudi Arabia is (astonishingly) well placed, coming 13th in the world for ease of doing business. Surely it can’t possibly go any higher given its atrocious placing on the corruption perception index. How on earth do they overcome this low score, coming 80th? Surely corruption ‘that bad’ will eventually tell its toll…
  • I have written about Kuwait before. Long story short, their poor showings in these indexes are indicative of their overall lack of enthusiasm for foreign investment or cooperation.

The historical corruption data:

corruption percetions inced 2004-8

(Apologies it’s so small: save it as a picture file to zoom in on it. Qatar-bright red. KSA-Reddy-brown (at the top). Bahrain-green. UAE-light blue. Kuwait-puprle ascending line. Oman-the variable yellowy-orange line.)

A few more things to note:

  • The higher on the graph, the worse the corruption.
  • Saudi Arabia is getting more corrupt and endemic corruption is notoriously hard a trend to reverse.
  • Qatar have, since 2004 (the oldest data I have to hand) been on a consistently ‘less corrupt’ trajectory.
  • The Emirates’ boom years from 2004-2008 have also seen corruption rise a not insignificant 6 places from 29th to 35th.
  • Bahrain are yo-yoing around (though not as bad as Oman). They will have to get a hold of these trends and keep them under control and on a downward spiral now that their oil deposits are severely depleted. Saudi and Kuwait can afford high corruption scores: Bahrain cannot.
  • Kuwait – disparaging of their need for foreign investment as they are – must address their upward spiral (44th-65th in four years) joining the likes of Cuba and El Salvador (and heading towards Columbia) on the index. Yes, technically, they may not need foreign investment now, but by the time they realise that they are beginning to need it, their corruption and economy more generally may be in no fit state to receive it.