Egyptians continue to pay a high price for corruption and an absence of accountability, reports Sherine Nasr A recently launched Transparency International (TI) National Integrity System (NIS) report poses worrying questions about governance systems in four Arab countries, namely Egypt, Morocco, Lebanon and Palestine. Key institutions and actors in these countries were examined. These included the executive, legislature, judiciary and the other governmental institutions along with non-state actors -- such as civil society -- and the business sector. In each of the four countries governance systems were found to exhibit major defects, and they all ranked "very weak" in terms of their integrity. "In Egypt, accountability remains a significant challenge across all branches of government, as well as in other social sectors, including business, the media and civil society," said the Good Governance Challenge report launched Sunday. According to Christian Poortman, director of the global programme at TI, governance systems in all four countries can be described as ineffectual. "A key obstacle is unchecked executive power that overrides attempts to introduce the kinds of checks and balances that put integrity and accountability at the heart of good governance," he said. Although each of the four countries are different in political and social set up, all share a common problem, namely "extremely underdeveloped public accountability systems and uneven enforcement of existing anti-corruption laws," according to the report. The problem of corruption was also classified as significant, with anti-corruption efforts facing tremendous challenges across the region. Typically, corrupt practices -- such as nepotism, bribery and patronage -- are accepted as facts of life in the countries in focus. According to Omnia Nabil Hussein, Egypt programme coordinator for TI, the recent report is based on four comprehensive country-specific studies. "In all these studies, we can trace some common features: corruption is deeply rooted in everyday life; anti-corruption concepts are poorly understood among institutions as well as citizens; reporting mechanisms are absent and so are laws to protect those who report on corrupt practices. A higher anti-corruption body is still absent and the newly introduced mechanisms to fight corruption are not functioning properly because of the conflict of interest." Hussein added that these studies are based on the National Integrity System (NIS) that assesses the performance of 16 pillars that contribute to integrity, transparency and accountability in society, including the executive, legislature, political parties, the electoral management body, the public sector and public contracting system, to name some. "NIS now provides a benchmark for measuring further developments in society and a basis for comparison among other countries." The NIS is also an important measurement tool for TI's global surveys and indices. Looking at the business sector, as examined by Egypt's NIS 2009, the report underlines that no company in Egypt has policies that address corruption in a direct way. "The business sector does not have any voluntary anti-corruption initiatives and there are no general rules to deal with corruption," the report said. Nevertheless, many Egyptian companies are now actively involved in Corporate Social Responsibility (CSR) initiatives to promote their public image and to help in doing business abroad. A 2004 World Bank (WB) assessment of the implementation of corporate governance in Egypt revealed that shareholders' rights are largely protected. "Secure methods of ownership registration are present, listed shares are freely transferable, shareholders can obtain relevant information on corporations on a timely and regular basis and shareholders have the right to participate and vote at general meetings," indicated the WB's Corporate Governance Country Assessment for Egypt. Nevertheless, the NIS underlined that anti-corruption measures do not figure in the corporate governance agenda of the private sector directly. "There is no sector or business association in Egypt that has mandatory anti-corruption rules. They only adhere to and apply the laws issued by the government in this respect." Small- and medium-sized enterprises (SMEs), in particular, suffer from corruption as they often have to deal with obstacles that can only be overcome with bribes. WB's Egypt Enterprise Survey of 2007 stated that almost 59 per cent of SMEs identified corruption as a major constraint on their business. The report further stressed that the conflict of interest of parliamentarians who are prominent figures in the business community is a major obstacle to integrity mechanisms that govern the relationship between legislative power, on the one hand, and the executive and private sector on the other. According to Hussein, discussion with key stakeholders in focus groups has produced a number of significant recommendations aimed at combating corruption. "There is a need to enhance public awareness of how to fight corruption by using existing mechanisms. Transparency mechanisms should be enforced and integrity mechanisms governing officials, including laws and regulations, need to be effectively implemented," noted the report. Other important recommendations include the urgent need to issue a law on freedom of the access to information, to establish rules for businessmen with legislative and executive positions to prevent conflicts of interest, and to introduce a structural change in the wages and incentives system for public employees in Egypt.
