Corruption in Balkans Hinders Investments

img65The 2009 corruption perception index released by the Berlin-based watchdog Transparency International shows that most countries in the Balkans have not improved their position in the global anti-corruption index.

With the exception of Montengro, there appears to have been little impact on the fight against corruption despite actions taken to tackle the problem and promises by heads of government to cut corruption in the run-up to EU membership, the survey shows.

The index showed that Croatia is considered as the least corrupt country in the region, ranked in 66th place, followed by Montenegro at 69th, Romania, Bulgaria and Macedonia tied at 71th, Serbia at 83th, Albania at 95th and Bosnia ranked 99th.

Last year’s index showed these countries at a comparable position, with some countries actually slipping. Only Montenegro increased its ranking by a margin of more than ten, rising from 85th place in the 2008 survey. Albania fell from 85th place, and Croatia slipped from 62nd place in 2008.

“Stemming corruption requires strong oversight by parliaments, a well performing judiciary, independent and properly resourced audit and anti-corruption agencies, vigorous law enforcement, transparency in public budgets, revenue and aid flows, as well as space for independent media and a vibrant civil society,” said Huguette Labelle, Chair of Transparency International in a statement released with the report on Tuesday.

The vast majority of the 180 countries included in the 2009 index score below five on a scale starting at zero, where zero is perceived to be highly corrupt, to 10 – where a country is perceived to have low levels of corruption. The CPI measures the perceived levels of public sector corruption in a given country and is a composite index, drawing on some of 13 different expert and business surveys.

Commenting on the report, Transparency International’s Bosnia representative Emir Djikic told journalists; “Bosnia enters the period of dangerous uncertainty, and corruption becomes a dominant problem that endangers implementation of overall reforms.”

“It is essential to implement necessary anti-corruption laws as soon as possible, and to begin with their implementation in order for Bosnia to be able to compete with other countries in the region,” Djikic said describing the current processing of corruption in Bosnia as “absolutely unsatisfactory”.

Another report released last week by the European Association of Chambers of Commerce and Industry on the Western Balkans also points out the lack of progress in the region, noting that failure to tackle corruption is hindering foreign direct investments.

“Two factors above all hinder the establishment of a healthy environment for FDI (foreign direct investment) in the region. The first one relates to existing corruption practices and the second to the uncertainty or unpredictability of the legal and regulatory framework,” notes the report, which is co-financed by the European Commission.

According to a survey presented in the report, 52 per cent of entrepreneurs in the region remain dissatisfied with the existing legal framework in their country, claiming that it does not prove a reliable tool for resolving disputes between their businesses and public authorities.

“In spite of an increasingly positive appraisal of the overall climate for FDI in the region, significant gaps remain between the current situation and the potential for investments,” the document stresses.

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