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Somalia listed as world's most corrupt country

Somalia remains rooted to the bottom of a global corruption index that also features Iraq and Afghanistan among the world's most corrupt countries, an international watchdog's annual report said Tuesday.

Rich European countries such as Britain and Italy also have slipped, Transparency International's annual Corruption Perceptions Index said. The report said Denmark, Sweden and New Zealand share the honor of being the world's least corrupt countries.

There was little change at the bottom from last year - with Somalia closely followed, as in 2007, by Myanmar, Iraq and Haiti. Just ahead of them was Afghanistan, which slipped to 176th place from 172nd.

Berlin-based Transparency said the index "highlights the fatal link between poverty, failed institutions and graft." The ranking measures perceived levels of public sector corruption in 180 countries and draws on surveys of businesses and experts.

"In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play," Transparency chairwoman Huguette Labelle said in a statement, describing the combination of corruption and poverty as "an ongoing humanitarian disaster."

Somalia has lacked an effective central government since 1991, leaving the country in the grip of violence and anarchy.

There were some bright spots in the new report - the report showed African powerhouse Nigeria improving to 121st place from 147th last year, reflecting increasingly positive perceptions of the country's new government.

Georgia rose to 67th place from 79th, showing that the government's "early reform efforts were highly effective in earning public confidence and improving the country's international image," the report said. But it added that, while petty corruption is generally agreed to have declined, grand corruption is a "persistent concern."

Labelle stressed that "even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed."

The report pointed to worsening performances by Britain, which slipped to 16th from 12th, and Italy, down to 55th from 41st.

It said Britain's perceived anti-corruption credentials suffered from a decision by its anti-fraud agency to halt an inquiry into whether one of the world's largest arms dealers offered bribes in exchange for lucrative contracts in Saudi Arabia; while fraud and corruption cases in the public health system weighed on Italy.

Another decliner in the European Union was Bulgaria - described as "still wary of tackling political corruption" - which slipped to 72nd from 64th. Finland, tied for first place last year, slid to fifth because of "a lack of transparency in election campaign finance."

The U.S. was in 18th place, compared with 20th last year. The report noted that it remains among the lowest-ranked leading industrial countries.

"Contributing factors may include a widespread sense that political finance is in need of reform, with lobbyists and special interest groups perceived to have an unfair hold on political decision-making," the report said.

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