Corruption and growth
Transparency to help tackle unemployment
Korea was placed 43rd of 183 countries in the Corruption Perception Index (CPI) released by Transparency International (TI), the world’s largest anti-corruption watchdog, late last year. The ranking represented a drop of four notches from that of a year ago with the index being 5.4 out of a possible 10. Korea’s index rose from 3.8 in 1999 to 5.6 in 2008 before falling back to 5.4 last year.
TI announces the corruption index every year where 0 is the most corrupt and 10 is the most transparent.
Of the 34 OECD (Organization for Economic Cooperation and Development) countries, Korea ranked 27th in the CPI. A survey of corruption levels in Asia, announced by the Anti-Corruption and Civil Rights Commission (ACRC) this year, placed Korea 11th among 16 countries.
It’s a shame considering that Korea is the world’s 11th largest economy and its export ranking places it ninth in the world. In this respect, a report analyzing the relationship between corruption and economic growth may have profound implications for Korea.
The report, released by the Hyundai Research Institute Sunday, says Korea’s economic growth could increase by another 0.65 percentage points if it achieves a level of transparency commensurate with the OECD average by uprooting corruption. This means that our economic growth would have reached 4.2 percent last year, given that last year’s growth was 3.6 percent.
According to the report, each 1-percent improvement in the corruption index has led to 0.029 percent increase in per-capita GDP.
It’s regrettable to see our economy hobbled by corruption at a time when unemployment, especially of youngsters, has become a serious social problem due to the sharp fall in the country’s potential growth rate. And we hopefully imagine that should Korea remove influence peddling scandals that traditionally erupt in the run-up to the end of a government, there will be major improvements in our employment situation.
What is clear is that corruption should be rooted out because it distorts decision-making processes and hurts the corporate urge to invest, thereby causing a negative impact to the country’s international competitiveness. Foreign investors won’t come to a country where corruption is rampant and transparency is not ensured.
Against this backdrop, the government should take necessary measures to boost our transparency across the board. First, the function of the anti-corruption agency should be reinforced significantly. At present, the ACRC as well as police and the prosecution has been addressing corruption problems in the public sector but its role has been restricted. The anti-corruption unit must be empowered to keep track of irregularities involving those in power around the clock.
Punishment of criminals involved in corruption and bribery cases should be strengthened as well and people must be reminded through education that corruption is not just a singular incident but a pervasive social evil. Of course, the 19th National Assembly that opens today will have to actively cooperate with the government’s plan to legislate anti-corruption laws.