Victory Lap for Georgian Leader

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U.S. President Barack Obama with Georgian President Mikheil Saakashvili. / REUTERS
All and all, it’s been a great trip to Washington for the president of Georgia, Mikheil Saakashvili.

Not only did Saakashvili get an Oval office meeting in which President Obama pledged to explore a free trade pact between the United States and Georgia, but the World Bank also lavished praise on the country. A report the bank issued Tuesday showed that Georgia has made great strides in tackling sleaze at home.

The World Bank cited the country’s “unique success” in rooting out corruption, an effort that “destroys the myth that corruption is cultural and gives hope to reformers everywhere.”

Here are the stats: The bank’s “Doing Business” survey now puts Georgia in the 16th spot, up from 112th place in 2005.  One reason for the jump was the elimination of police corruption.  Saakashvili fired 16,000 cops, replaced them with a smaller force and then kept a close eye on them. Red tape was cut and tax collections modernized – eliminating the need to pay bribes.  Ditto for improvements to the energy sector. With reliable energy provided for the citizens, there was no need to pay bribes to keep the lights on.

The bottom line for Georgia may well be its own bottom line.  The country is hoping its cleaner image will attract foreign investment and put the country on track for a double-digit growth rate.

Sweep to The Georgian paradox

Another report painted a far less rosy picture for another part of the world.  PriceWaterhouseCooper’s annual Global Economic Crime Survey came up with a gloomy forecast for the Middle East.

More than 40 percent of the respondents to the survey from the region said they expect their companies or organizations to face bribery and corruption in the Middle East in the coming year.  This compares to fewer than 25 percent who said they expected to be shaken down in other parts of the world.  The kind of corruption that these business leaders anticipate in the Middle East includes accounting fraud and money laundering.

Those surveyed may know what they are talking about.  The crime survey polled 3,600  globally, and included interviews with 126 respondents who were C-suite executives (chief executive officers, chief financial officers and others with “chief” in their titles), senior vice presidents  and department heads who do business in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, United Arab Emirates and the West Bank.

Since many of these are “Arab Spring” countries, the findings suggest the road to a more open and accountable society may be a long one.

Sweep to Survey finds bribery, corruption in the Middle East increasing

Charles Cramb. / COMPANY PHOTO
It doesn’t look like Avon will be calling on Charles Cramb, its vice chairman, any time soon.  The beauty products company has fired Cramb over allegations of overseas bribery and possible improper disclosures to Wall Street analysts.

Cramb was the latest head to roll at the company, which sells its beauty products door-to-door. He is follows two top U.S. executives and three in China who have been ousted amid a long-running investigation into possible bribes in the company’s operations in China and elsewhere. In addition, another line of inquiry centers on whether the company’s disclosures to investors over the probes was adequate.

Until his ouster, Cramb was considered in the running to replace Andrea Jung, who is slated to step down as chief executive once a replacement for her is named.  Last month, Avon’s board told Jung she would be leaving, citing the company’s poor financial performance and continued bribery investigations.

Sweep to Avon executive Charles Cramb departs amid bribery probe

Leslie Wayne

Leslie Wayne

Leslie Wayne, former senior editor at 100Reporters, is an award-winning business reporter, formerly at The New York Times. Ms. Wayne joined The Times in 1981 and has covered Wall Street, banking industry regulatory reform, municipal finance scandals and, most recently, the aerospace and military industries. Ms. Wayne has an M.B.A. in finance from Columbia Business School and was also a Knight-Bagehot Fellow in Business and Economic Journalism.

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