Corruption can take money away from hospitals in places like Iraq, says TI
Iraq has been ranked by Transparency International(TI) as one of the world's most corrupt countries, just above Somalia as the "least clean" state.
The index is based on perceptions of public sector corruption in 180 countries and territories.
The high levels of corruption amount to a humanitarian disaster said Huguette Labelle, chair of the watchdog.
At the bottom of the transparency table, along with Somalia and Iraq, are Burma, Haiti, Afghanistan and Sudan.
While Iraq remains in the same bottom-three position in the table as last year, the level of perceived corruption in the country collated by the Berlin-based organisation has increased.
TEN MOST CORRUPT STATES
Source: Transparency International
The score is based on perceptions of the degree of corruption as seen by business people and country analysts.
'Tougher approach needed'
"In the poorest countries, corruption levels can mean the difference between life and death, when money for hospitals or clean water is in play," said Ms Labelle.
She added: "But even in more privileged countries, with enforcement disturbingly uneven, a tougher approach to tackling corruption is needed."
Sweden jumped up to join Denmark and New Zealand at the top of the table, while Finland slipped back from the top to fifth place.
Among those countries whose corruption score had worsened over the past year were Bulgaria, Burundi, Maldives, Norway and the UK, said TI.
The UK has dropped from 12th position down to 16th and the watchdog blames what it claims to be the UK's "engrained complacency over its failure to take international corruption seriously."
TEN LEAST CORRUPT STATES
Chairman of the UK branch of TI, Laurence Cockcroft, said: "Many developed and developing countries find the UK's attitude inexplicable.
"Is it really so difficult to pass a proper anti-corruption law in 11 years since one was required and recommended?"
In the 2008 index, Qatar, South Korea and Turkey made significant progress in the fight against corruption.
Somalia is at the bottom of the table for a second year. The country has been without an effective central government since a military regime collapsed in 1991.