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Economic crisis boosts distrust of business

Distrust of business has risen in the wake of the financial crisis and about half those surveyed around the world see the private sector as corrupt, watchdog Transparency International said on Wednesday.

A survey by the Berlin-based group showed that 53% of respondents believe the private sector to be corrupt, up from 45% in 2004.

In roughly a fifth of the countries and territories surveyed, including financial hubs such as Hong Kong, Luxembourg and Switzerland, the private sector is seen as the most corrupt institution

“These results show a public sobered by a financial crisis precipitated by weak regulations and a lack of corporate accountability,” said TI Chair Huguette Labelle.

More than half the respondents in TI's 2009 Global Corruption Barometer, which surveyed over 73,000 people from 69 countries and territories, believe companies use bribes to influence public policy.

Private sector bribery of policy-makers is seen as a particularly serious problem in newly independent states such as Georgia and Armenia, but it is also seen as a major issue in North America.

“But we also see that the public is willing to actively support clean business,” said Labelle. “What is needed now is bold actions by companies ... to report more transparently on finances and interactions with government.”

Half the respondents said they were willing to pay a premium to buy from companies free of corruption.

Political parties, however, are still seen as the institution most tainted by corruption, closely followed by the civil service.

POOREST ARE HARDEST HIT

More than one in 10 respondents said they had paid a bribe in the past year, with the police seen as pocketing the most illegal money, Transparency International said.

Low-income households are the most likely to face demands for bribes, compounding their difficulties as jobs and incomes dwindle in the economic downturn, it said.

“As economic growth shifts into reverse, poor households are increasingly forced to make impossible choices in allocating scarce resources,” said Labelle. “Do parents pay a bribe so that a sick child can see the doctor or do they buy food for their family?”

Cameroon, Liberia, Sierra Leone and Uganda are the most affected countries, with more than 50% of their respondents saying they had paid a bribe in the past year.

Most of those polled felt that existing channels for reporting on corruption were ineffective, and fewer than one in four who paid a bribe in the past year lodged a formal complaint. (Reuters)