Combating corruption: Ensuring transparency, good governance  

Muhammad Zamir     | Published: February 10, 2019 21:30:32 | Updated: February 10, 2019 21:45:10

We might not like it but Bangladesh once again has found itself in the list of the most corrupt countries of the world. According to the latest Transparency International Bangladesh (TIB) report, we have moved downward in the Transparency International Perception Index (TIPI), 2018 released on January 29, 2019. According to TI, Bangladesh has scored 26 out of 100-- two points lower than in 2017, which means the country now ranks 149th among 180 countries. It was in the 143rd position in 2017. Bhutan, India, Sri Lanka, Pakistan and Maldives from South Asia have been shown as ahead of us in this regard.

This assessment has created a furor inside Bangladesh. The BNP and some other parties allied with the Opposition have started using this report as vindication of their views about lack of good governance by the ruling party, Awami League. The party in power, on the other hand, quite justifiably, has conveyed its dissatisfaction with various aspects of the report.

The Information Minister, the Finance Minister and the Chairman of the Anti-Corruption Commission have drawn attention to the fact the method in determining the TIPI in the report was unclear. They have also stated that the questions asked and the answers received by the TI needed to be made more transparent and more cohesive. The Chairman of ACC has also suggested that the TIB should have consulted the relevant agencies, and asked them to give their opinion before rushing to exercise their judgment and giving publicity to their findings.   

Analysts generally agree that bribery, rent-seeking and inappropriate use of government funds, excessive lobbying, long time delays in service performance, pilferage, irresponsible conduct from government officials and excessive bureaucratic intemperance and mindset have made public sector departments associated with law enforcement, water supply, electricity, gas supply, education, waste disposal, health, transportation, issuing of passports and maintenance of land records etc susceptible to corruption. Lack of proper accountability appears to have also been a cause for such a development.

The Asian Human Rights Commission at times has also gone to the extent of alleging that due to the abuse of governance some of the branches of our law enforcement agencies benefit from corruption, political patronage and the culture of impunity. Consequently, at times, cases involving serious criminal offences like extortion, homicide, abduction and forcible occupation of property remain unresolved and become examples of rampant human rights abuse.

It would also be interesting to recall here that investigative media reports have suggested that there is a great deal of irregularities in public hospitals. Doctors, nurses and other professionals working in government-run public hospitals do not always follow the laid-down rules with regard to conducting pathological investigations, providing required medicines or sleeping facilities expected during treatment in a public hospital. There have also been accusations of demanding of bribes for services which are supposed to be provided free of cost.

Similarly, many of the hospitals, clinics and pathological laboratories in the private sector also suffer from the same malaise. Medical practitioners in both public and private sectors allegedly earn money by raising healthcare costs through commission agreements with diagnostic centers. There have been reports in this regard by patients that, even in emergency situations, they were unable to access services unless a bribe was paid first. 

These allegations have been rejected by the relevant authorities but they clearly underline the need for more stringent monitoring of applicable regulations.

Another issue added to the existing practices of corruption has been the outflow of illicit money to different financial points in various countries of the world. Apparently, this process has involved the use of 'over-invoicing and under-invoicing'. Analysts have pointed out that such illegal transfer of funds abroad by the private sector might be stemming from lack of confidence within the trading community and the corporate sector pertaining to financial security and accountability in governance.

Another area affected by corrupt practices is the lack of compliance in respect of legal regulatory requirements within the private sector. We come across reports on a regular basis where it is pointed out that business owners have not been consistent with proper safety codes that needs to exist in the buildings that are being used as workplaces. Recent drives by the government and careful investigations by inspection teams have led to a degree of improvement but the situation is still not fully satisfactory.  As in other parts of South Asia, efforts are sometimes undermined due to the use of kickbacks in closed-door negotiations.

These elements have at times led to international media reports identifying Bangladesh as a nation with great promise, but held back from moving faster because of mis-governance, manipulation and corruption within the public sectors. The Economic Freedom Index- 2019 recently published by the US-based Heritage Foundation has noted in this regard that despite progress in streamlining business regulations, entrepreneurial activity is being hampered by an uncertain regulatory environment and the absence of effective long-term institutional support for private sector development. Their observations also include mention of fragile rule of law, corruption and weak enforcement of property rights that is affecting small businesses and moving them towards informal economy.

Many have claimed that the Anti Corruption Commission constituted through an Act promulgated on February 23, 2004 (that came into force on May 9, 2004) has not been able to function properly as had been anticipated due to lack of proactive investigations aimed at preventing corruption at the upper as well as the lower levels. In this context, the media has recently revealed that the rate of conviction in graft cases lodged by the ACC dropped in 2018 after a steady rise in the previous three years. The punishment rate was 60.64 per cent last year, down from 67.93 per cent in 2017.

One has to remember that Bangladesh, despite serious odds, has been able to move forward because of the initiatives taken by this government over the last few years. In 2005, Bangladesh's GDP was around US$ 87 billion. Over the last ten years, our per capita income has crossed US$ 1,750 and the GDP has climbed to nearly US$ 300 billion. The private sector has contributed to this growth in a major way.

Alongside the Anti-Corruption Commission, there is perhaps the need to create another exclusive independent institution under the Ministry of Finance to tackle the issue of illicit money transactions. It should include representatives trained in cyber security from the ACC, the NBR and the Bangladesh Bank. We should also set up Special Courts for speedy disposal of corruption cases. They should not be allowed to get stuck in the quagmire of legal technicalities. Also, there has to be the political will for not only tackling corruption among all stakeholders but also rising above partisan interests. We need to be more effective in overcoming the existing challenges as is being done in Singapore.

Findings made public by the Global Financial Integrity institution in its 2015 Report have indicated siphoning off of big sums of money from Bangladesh. This has apparently been going on for some time. Over the past decade it appears to have increased. It has also been estimated that on an average every year such illicit flow of money from Bangladesh has exceeded USD 5.0 billion. Bangladesh in terms of illegal money laundering is now among the top forty countries in the world.

Investigative journalists at different times have also revealed that "about 88 per cent of illegal money outflow takes place through importers making illicit arrangements with their foreign suppliers where they pay more money for goods imported and the suppliers pass the extra amount to foreign accounts of such importers. This illegal process is, to a great extent, facilitated by corrupt bankers who provide additional loans to such importers who claim that they need additional loans to meet higher import costs of raw materials or capital goods and machineries. Subsequently, the same bankers re-do the repayment schedules and this process leads to non-performing loans (NPLs).  It is also found that the financial institution from where the importer borrowed money against spurious collaterals does not have sufficient back-up and the bank ends up losing the loan content. The net loser at the end of the day turns out to be the depositors and the State, if it is a public bank.

However, illicit money outflow from the country cannot be stopped overnight. It can probably be reduced over time by overcoming the challenges existing at the grassroots level. One measure would be to deny the facility of whitening black money which indirectly sanctions the right to make money through illegal means.

A recent report on corruption released by the International Monetary Fund (IMF) has mentioned that bribery and the informal economy "sucks up between US $ 1.5 and US$ 2.0 trillion annually around the world, dragging down economies and worsening social services for the poor".  The economic impact of corruption might be hard to quantify. But the contention of the report "that corruption perpetuates economic inefficiency, undermines public policy and exacerbates inequality" is a timely warning.

In this context, the latest initiative of the Prime Minister and her new government to combat corruption deserves special mention. The government has declared that it would not only show zero tolerance towards corruption  that might be prevailing in different sectors but would also ensure transparency in decision making that will ensure accountability and good governance.

Muhammad Zamir, a former Ambassador, is an analyst specialised in foreign affairs, right to information

and good governance. 


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