A World Bank report on governance indicators sees Cyprus losing ground on five out of six categories verifying a feeling among Cypriots that there is institutional corrosion.
Cyprus has slipped behind on indicators regarding control on corruption, the rule of law, government effectiveness, regulatory quality and political stability during 2017.
Cyprus exhibited some progress on the voice and accountability indicator, reaching the levels it was 10 years ago.
The values of the World Bank’s six indicators are identified via a survey, which takes into consideration answers given by citizens and national institutions dealing with social and economic development of a country.
The final value of each indicator is derived from the synthesis of the responses to surveys of specialist opinion polls or large research institutes. The final values are between -2.5 and 2.5.
That means that the higher the value of the indicator, the higher the confidence of the public towards the specific area of governance in their country.
One of the most striking findings of the survey is the public finds that authorities are performing worse than in previous years when it comes to control on corruption. In the fight against corruption, the Cyprus rating fell to 0.78 from 1.25 in 2012 and 1.08 in 2007.
Cypriots gave the government a lower grade regarding its effectiveness as it dropped to 0.92 from 1.39 in 2012 and 1.43 in 2007.
A disquieting find of the World Bank's survey is that the rule of law in Cyprus is showing a significant decline, from 1.12 in 2007 to 1.10 in 2012 and 0.88 in 2017.
Cyprus has recorded a small drop in the Regulatory Quality.
The former Governor of the Central Bank, Panicos Demetriades, in comments made to newsite Stockwatch, said the ratings are worrying as “these indicators are decisive not only for sustainable development but also for the general prosperity of a country”.
He said it was no coincidence that countries like Finland, Denmark and Norway, which occupy the top ranks in the World Happiness Index, have the best institution quality, according to the World Bank.
“In the case of Cyprus, it is particularly worrying that the country is receding in indicators such as control on corruption and rule of law, which are considered to be the most important for economic growth in the long run,” said Demetriades.
“At the same time, Cyprus has one of the biggest declines in the Happiness index, ranking it in position 130 from 141 countries in the table," he added.
Demetriades said that it is no surprise that the decline in the governance indicators of the World Bank is in line with a number of other negative developments that began with the erosion of the Central Bank’s independence in 2013.
“Since then we have seen efforts by the Anastasiades administration to control other independent institutions, as well as the media,” said the former banker.
He added: “We had the collapse of the Co-op bank and the government's insistence on introducing the naturalization program that creates a cocktail of economic and political risks (for example, the boom in high rise constructions for foreign millionaires, which is not sustainable development but, possibly, signs of a bubble) while ignoring prudent warnings from the Fiscal Council and other economists.”
