The Financial Express

Graft raises cost of doing business

| Updated: October 24, 2017 17:12:01

Graft raises cost of doing business
There is no denying that corruption is rampant in Bangladesh in almost every sphere of life. It is pervasive at all levels of society. However, a series of high-profile corruption scandals, such as the Hall-Mark Group, Destiny and the much-publicised share market scam that involved high-profile government officials and dignitaries has brought the credibility of the government under the scanner. 
The development partners of the country also expressed concern over the slowdown of anti-corruption drive and implementation of development projects, and low level of investment. According to major ranking institutions, Bangladesh finds itself among the most corrupt countries in the world. 
Analysts say the reasons behind such widespread corruption include low salaries and weak institutional capacities of the government. The government has recently hiked salaries and perks of its employees. Nevertheless, what is true about the situation is that the anti-corruption legislation is inadequately enforced in the country. Facilitation payments and gifts are illegal, but very much common in practice. 
In a situation of continuous political strife, a series of corruption scams of such magnitude has led the general public to question the credibility of the government in taking firm action against corruption. Added to this, the dismissive and defensive stance of the government has belatedly worsened its position.
In Bangladesh, with politics getting intertwined with corruption, the blame game starts with every change of  government. The continuous political bickering over corruption issues has been constant over the years, with each party in power probing scandals that involved party leaders of the opposition and in turn getting rid of their own cases that were being pursued by the past government.
Institutionally, the Anti-Corruption Commission (ACC) was established in 2004 as a neutral, independent institution to enact preventative and retributive policies to fight corruption in a variety of entities -- both governmental and non-governmental. However, in the latest report on Bangladesh brought out by the International Crisis Group, the ACC was termed as a "toothless tiger" by the then chairman of ACC. 
However, there is no denying the fact that the government has had credible success on many fronts like in dismantling terrorist networks functioning in the country, jailing extremists and stopping foreign funding of terrorist organisations operating from its soil. In the domain of foreign policy, it has taken constructive strides, especially in improving relations with India, mainly by addressing its security concerns and making efforts to find solutions to long standing issues between the two countries. 
Additionally, the economy has grown at an impressive rate of 6.4 per cent as well as progress made in education, healthcare and women upliftment under Sheikh Hasina's leadership has been much appreciated. However, in spite of all the positive steps, there is a rising discontentment and disillusionment about the government. A series of corruption allegations involving government functionaries among others has tainted its image.
Cases of corruption in the financial sector like the illegal disbursement of a loan of Tk 35.47 billion to Hall-Mark Group and five other companies since 2010 by Sonali Bank, in which a top government functionary was allegedly involved, are still lying pending. In addition, the share market scam in which about Tk 200 billion were swindled and the Destiny group scam have all affected the popularity of the government seriously.
Transparency International's (TI) latest report on 'Positive and Negative Roles of the Members of the 9th Parliament: A Review' stated that around 97 per cent of the MPs are involved in 'negative activities and 70 per cent were involved in criminal activities. Many ministers from the ruling party, however, questioned the motive as well as the timing of the report saying it was 'ill motivated" and considered it a conspiracy to bring non-elected people to power as well as to damage the image of the elected MPs. However, the fact remains that Bangladesh is not new to corruption rather it has struggled to keep a clean image. 
The United States said Bangladesh offers opportunities for investment but corruption remains a serious impediment to investment and economic growth. The US made the observation in its Investment Climate Statement 2015 on Bangladesh. While the government has established legislation to combat bribery, embezzlement and other forms of corruption, enforcement is inconsistent, it said. 
The present government is committed to curb corruption and strengthen the ACC. However, moves to ease public procurement rules and a recent constitutional amendment that reduced the independence of the ACC may undermine institutional safeguards against corruption.
Corruption, including bribery, raises the costs and risks of doing business. By some estimates, off-the-record payments by firms may result in an annual reduction of two to three per cent of GDP (gross domestic product)`. Graft and corruption have a corrosive impact on the broader business climate. It also deters investment, stifles economic growth and development, distorts prices and undermines the rule of law.

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