Transparency and Anti-Corruption Efforts in Emerging Markets are “Pathetic,” According to New Study

In a new study released Monday, Transparency International (TI) assessed anti-corruption transparency in 100 of the fastest-growing multinationals in emerging economies. Emerging markets contribute to the majority of global economic growth, which can be stunted if overseas investors and consumers perceive these markets have significant levels of corruption.

Transparency International assigned companies under review an average score of 3.4 out of 10, revealing a declining trend from previous years. Chinese companies fared worse, with an average score of 1.6. According to Reuters, TI Chair Jose Ugaz feels that levels of transparency in emerging market companies are “pathetic.”

Main issues that emerged from the study were tax avoidance and corporate secrecy, which TI recommends that companies address in the following ways: report anti-corruption policies, disclose company structures and holdings, and disclose financial information in each country of operation. Specific examples include creating policies that ban bribes, any type of facilitation gifts, as well as disclosing tax payments. Such information should be made publicly available via company websites, and reported to entities, such as those that publish anti-corruption indices.

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