Saturday, December 09, 2006

Western Governments Seen as More Corrupt Than Africa While the Rich Get Richer and the Poor Get Poorer

Public sees African anti-graft action as better than west's

By Tom Burgis in Brussels
December 8 2006 02:00

European and North American governments are seen to be more corrupt than their African counterparts, according to a worldwide survey of public perceptions of graft.

Research by Transparency International, the anti-corruption watchdog, found that one in five people in the US and Canada and almost as many in western Europe said their leaders were encouraging corruption rather than fighting it.

The same proportion across the eight African countries surveyed said their governments' anti-graft policies were "very effective", a sentiment shared by only 2 per cent of North Americans and 4 per cent of western Europeans.

Almost half of the western Europeans and North Americans questioned considered their governments' efforts to tackle corruption ineffectual, compared with only one-quarter of Africans.

"There's been in many countries in Africa a considerable increase in the focus on good governance," said David Nussbaum, Transparency International's chief executive, at the launch of the Global Corruption Barometer 2006 at the European parliament in Brussels yesterday.

"In western Europe and North America, there's been a recognition that the systems that operate are open to abuse by those in power."

The non-governmental organisation based its analysis on almost 60,000 interviews in 62 countries conducted by Gallup International, the pollster, between July and September - a period when the rich world was awash with corruption scandals.

May brought the conviction of Ken Lay and Jeff Skilling for the big fraud that ruined Enron, the energy giant they ran. Mr Lay, who died in July, had been a leading donor to the Republican party of George W. Bush, US president.

In a separate case, Jack Abramoff, a once-mighty lobbyist, pleaded guilty to fraud, tax evasion and -conspiracy to bribe public officials. In Britain, the Labour government has been bedevilled by allegations that it handed out peerages in return for undisclosed loans.

African governments, spurred in part by donors' insistence on better governance, had begun to turn anti-graft rhetoric into legislation, said Mr Nussbaum.

In Nigeria, a country perennially rooted to the foot of the Berlin-based group's annual corruption rankings, a finance ministry crackdown on fraud and money laundering appears to have convinced the public. More than half the Nigerians polled said anti-corruption efforts were either effective or very effective.

Observers cautioned that public perception might be a shaky foundation for -gauging corruption. A better measurement would be high on the agenda when -ministers from the 80 -countries that had ratified the United Nations' convention against corruption -convened in Jordan next week, said Stuart Gilman, head of the UN's anti-corruption programme.

Copyright The Financial Times Limited 2006

Richest 2% hold half the world’s assets

By Chris Giles, Economics Editor in London
December 5 2006 13:13

Personal wealth is distributed so unevenly across the world that the richest two per cent of adults own more than 50 per cent of the world’s assets while the poorest half hold only 1 per cent of wealth.

A survey released on Tuesday shows that middle-income countries with high growth rates still have a long way to go before they have a hope of catching up with the levels of prosperity of the richest.

Adults with more than $2,200 of assets were in the top half of the global wealth league table, while those with more than $61,000 were in the top 10 per cent, according to the data from the World Institute fpr Development Economics Research of the United Nations University (UNU-Wider).

To belong to the top 1 per cent of the world’s wealthiest adults you would need more than $500,000, something that 37m adults have achieved.

So much of the world’s wealth is concentrated in few hands that if all the world’s wealth was distributed evenly, each person would have $20,500 of assets to use.

Almost 90 per cent of the world’s wealth is held in North America, Europe and high-income Asian and Pacific countries, such as Japan and Australia.

While North America has 6 per cent of the world’s adult population, it accounts for 34 per cent of household wealth.

The concentration of wealth in different countries varies considerably, with the top 10 per cent in the US holding 70 per cent of the country’s wealth, compared with 61 per cent in France, 56 per cent in the UK, 44 per cent in Germany and 39 per cent in Japan.

According to Anthony Shorrocks, the director of UNU-Wider, the number of wealthy individuals in a country depends on the size of the population, the average wealth and its inequality.

“China fails to feature strongly among the super-rich because average wealth is modest and wealth is evenly spread by international standards”, he said.

As countries grow richer, their population changes how it holds wealth, according to the report.

In developing countries, property, particularly land and farm assets are important, while cash savings tend to dominate in middle-income counties.

Only in certain advanced countries such as the US and the UK with developed financial sectors is there a strong appetite for holding equities and other more sophisticated financial assets.

Debt is also low in poor countries because financial institutions do not exist to allow people to borrow.

In contrast, the authors say “many people in high-income countries have negative net worth and, somewhat paradoxically, are among the poorest people in the world in terms of household wealth.”

Wealth is difficult to measure even in the most advanced countries, so the research was based on painstaking compilation of aggregate and survey data for the 38 countries of the world where it exists and statistical models for the rest of the world.

Copyright The Financial Times Limited 2006

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