Festering corruption

An impediment to development and a dis-incentive for foreign direct investment, corruption is affecting economic performance as well as poverty reduction. It is also being generally recognised that corruption is retarding economic growth by nearly 4 percent every year. Its all pervasive existence is now a sad commentary not only on the state of governance in successive governments but also on the absence of necessary political will to combat this pestilence.

A roundtable was recently organised by the Bangladesh Anti Corruption Commission (ACC) to discuss 'Corruption, Nature, Causes and Remedies'. Professor M. Yunus of the Grameen Bank participated in this meeting and came up with certain new approaches. In his own way, he tried to break down a complex problem into small manageable units -- each of which could be addressed separately and comprehensively.

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Some of his observations were interesting. It included focussing on activities associated with certain areas and departments of the government -- the Chittagong Port, the Tax Department and the Airport. He however left out, quite inexplicably, the corrupt elements that roam the offices of the water, gas and electricity supply departments, the Ministry of Works, the Ministry of Education, Land Administration, the Ministry of Communications and the Ministry of Health.

He also suggested the need for greater involvement of journalists and the civil society. This was good. His other proposals however left me sceptical. This was about the creation of 'sufferers groups', the publication of market rates of corruption and the identifying of a corruption index for different government agencies and ministries. These smacked of being idealistic and impractical.

He appears to have forgotten that doing business with different government departments is always on a less than level playing field. He also seems to have overlooked the axiom of socio-metric overlays. In this context, it is most unlikely that local businessmen will agree to identify themselves as 'sufferers' or participate in a survey to peg corruption indicators in a ministry. They would be blacklisted land could kiss their chances good-bye for departments which rely on tenders for public work or for purchases.

He has, however, made two important points -- a) that of identifying corruption within the ACC itself and b) that corruption breeds in the selling of power pertaining to rules, regulations, laws and licences. In this regard, he also pointed out that transparency and e-governance could greatly reduce the prospect of mis-governance and corruption. This is a useful format that has already worked in the Scandinavian countries and in Singapore. There are demarcated time limits in these countries with regard to the expected processing of business. That makes the system operable. This also stops all officials, at all levels, from extracting money through delay or threat of delay in decision-making.

Implementing such a scenario would be desirable, but most difficult given the nexus between politics and business in this country. Here, most unfortunately, most of the members in the responsible positions in the government (including the Cabinet) are directly or indirectly (through members of their families) involved in business.

Nevertheless, Yunus's interest is praiseworthy. The government should seriously consider taking him up on his proposals and appointing him as Special Adviser to the Chairman of the ACC. It would indeed be revealing to see how the head of a large, successful NGO, now a significant business corporation, handles the complex factors that guide corruption in this country. He has an international image and would probably try harder than most to safeguard his reputation.

In Bangladesh, the close relationship between business and politics has however not led to business-friendly public policies all the time. It has only contributed towards indirect corruption based on 'distribution of patronage in the form of import licences, public procurements and contracts, loan from NCBs and DFIs like the BSB and BSRS'.

It has also been noticed that election has in its own way become a business. Candidates 'see their expenditures on election as an investment, expecting to double the return whatever the cost' (Mashiur Rahman, 'Corruption: Economic and Political Parspectives'). This process has probably assisted in capital formation through 'kleptocracy' (as some economists like to term it), but this has also meant deterioration in terms of ethical as well as social standards. In fact, few will deny, that in contemporary Bangladesh, politics has been a significant factor associated with criminalisation of society. Black money and mastaans have eroded values and spurred ambition and greed. This has to stop.

Any discussion on corruption also requires a mention about the methodology to be employed in this regard. Like many others I do not agree with the system used by Transparency International in ranking countries in terms of corruption. This is a controversial and debatable exercise particularly because corruption is present in varying degrees in all countries of world. To quantify it, and to put relative numbers on assessments, will not necessarily always be correct. There are also the other factors -- that almost eighty percent of our population live in the rural areas and that our economic base is rather limited. Yes, corruption is pervasive in Bangladesh but how is it more serious than Nigeria?

Our corruption is probably reflected in the visible informal urban economy -- in the surfeit of reconditioned cars, in real estate and also in the construction sector. Like the past few years, the government has again made arrangements to whitewash black money in the budget for 2005-06. Unfortunately, this malaise has not stopped. This was not the right thing to do. Our finance minister should have stuck to his guns. He has gone back on his own words and also refused to honour the views of the Anti Corruption Commission in this regard. Past experience indicated that most of the untaxed money worth Taka 1,775 crore (that came into the formal economy through this method between July 2002 and December 2004) ended up, according to economists, in the non-production, non-profitable real estate sector. In a manner of speaking, this policy will help to prolong for another year, the growth of corruption.

Under pressure from the donor community, the government has also taken the significant step of constituting the ACC and doing away with the Anti-Corruption Bureau. It now has to ensure that the ACC does not degenerate into a mechanism for personal and political vendetta. The ACC, after several months, has been able to adopt a draft organogram with proposed 70 offices all over the country. Nevertheless, the public perception about ACC continues to be negative. It is still considered to be non-functional, not totally independent and without adequate financial support.

The World Bank, the IMF and the ADB have all urged that ACC be made effective and have also offered financial support for this purpose. They have done so because they believe that development support from the donor community would not be meaningful unless the widespread corruption prevailing in the country is curbed. The government should not only take advantage of such support but also ascertain from such international agencies how corruption arising out of interfacing of the public and private sectors can be suitably tackled.

What we definitely need today is large scale awareness building among the citizens. Having an ombudsman, a de-politicised judiciary and civil service will also contribute significantly to the anti-corruption effort. This disease can only be contained through sustained groundswell support from ordinary people and active assistance from a pro-active, bi-partisan political leadership which believes in transparency and disclosure of personal wealth.

I strongly believe that reducing the cost of doing business in Dhaka will promote economic growth and poverty reduction. There is no other option.

Muhammad Zamir is a former Secretary and Ambassador -- any response to mzamir@dhaka.net