The journey towards fighting corruption

Debates on any global index and ranking where a country does not perform well are common almost everywhere. From politicians to experts to common citizens—all have distinctive and diverse views. This is of course a sign of a thoughtful and argumentative nation. While no ranking and indices are perfect since there is always some margin of error in estimations, and thus we should not get overwhelmed by these numbers, the importance of such indices cannot be undermined, however. It gives an indication on the achievements made by countries and reminds us to do better by addressing the concerns. So even if we discard the rankings, the underlying messages have to be taken seriously.

The Corruption Perception Index (CPI) 2020 published by Transparency International reveals that Bangladesh's position is 146th among the 180 countries that were included in the ranking on corruption. In terms of score, Bangladesh achieved 26 out of 100. In a scale of 0 to 100 used for scoring in the CPI exercise, 0 indicates a highly corrupt and 100 indicates a clean country. In 2020, both the position and rank have remained the same as that of 2019, in the case of Bangladesh. Within South Asia, Bangladesh is ranked the second lowest.

Whatever the CPI ranking may say, the prevalence of corruption and its negative role in the economy cannot be overlooked. The Global Competitiveness Report (GCR) 2019 also identified corruption as one of the top problematic factors in doing business in Bangladesh. The GCR found a number of malpractices, including the existence of unofficial transaction for awarding public contracts, and bribes in tax payments and export/import.

Of course, corruption is a global concern. Although it is historically more prevalent in the less advanced countries, the developed countries are not free from it either. That is why in the CPI 2020, no country could score 100.  However, more than the score, what is important is the effort to stamp out corruption from society. How a government perceives corruption, and how a society looks at corruption, are important to understand what measures are expected of the government.  

Studies have shown that corruption has not only economic costs, but also social and environmental costs. When infrastructure collapses due to the poor construction by a less qualified contractor who got the contract through bribes, then it is not only a waste of resources and loss of potential output of the economy, but also a loss of invaluable human lives. Corruption is also a disincentive to those who genuinely want to invest, but suffer from uncertainty over getting the necessary permissions. High facilitation fees may become less cost-effective for many businesses and reduce their competitiveness. An industry paying exorbitant "speed money" for a public service would be in a less advantageous situation than the one which gets it done by paying the regular price. A business paying existing interests for bank loans would struggle to compete with a business that enjoys frequent interest waivers or has defaulted with the bank. Such disincentives may discourage those who could add more to national output in terms of job creation, innovation and productivity through investments.               

The social cost of corruption is also high and has a distributional impact. If incompetent school teachers are employed at public schools through bribes, the quality of education suffers. These students may fall behind in accessing higher education and securing employment. This has a long-term implication on the overall human capital situation and the welfare of future generations. When the government cannot generate resources through taxation due to high tax evasion, there is inadequate resources for social protection for the poor. Hence, it hampers inclusive growth.

The environmental costs of corruption are no less important. When encroachers construct buildings by filling up rivers and lakes or cutting forests illegally, the environmental damage caused is irreparable. When unfit vehicles with high carbon emissions run on the road, getting away with paying bribes, the cost of that pollution is human health. This increases government expenditure on cleaning up the degraded environment. The pollution also reduces productivity and prosperity.

The reduction of corruption is connected with the improvement of overall governance in the country. There is no denying that over the last five decades, the Bangladesh economy has transformed into a promising one on many accounts. This is evident not only through higher economic growth, but also through less volatile economic growth.  Despite various external and internal shocks such as the global financial crisis, regular natural disasters and above all, the ongoing Covid-19 pandemic, the country has been able to show resilience and achieve better growth compared to most economies across the world. It has been predicted by various organisations that Bangladesh will recover better and faster than many countries from the fallout of the pandemic.

In Bangladesh, economic growth has so far been autonomous of governance to a large extent. However, to improve the efficiency of development efforts and to propel economic growth, corruption has to be rooted out. The reduction of corruption requires drastic measures. Digital governance can help this to a large extent. Technology has brought spectacular changes, not only in urban areas but also in rural areas. However, this is yet to be used in full force in the case of establishing transparency.

Institutional reform of the responsible bodies for overseeing corruption is also critically important. The first-generation economic reform measures in Bangladesh led to the opening up of its economy in the 1990s. But they were not coupled with reforms and the strengthening of institutions at that time. In the following decades, a few regulatory and institutional reforms were undertaken to accelerate economic growth, albeit on a limited scale. The banking sector is one of those institutions which underwent some reforms, but the reform initiatives did not result in much improvement in economic governance, as they were incomplete.

As part of establishing accountability, exemplary measures including reward and punishment in the system and practice of rule of law, can play a crucial role. Although the willingness to improve transparency and accountability in the public administration has been expressed by the government several times, substantive initiatives are yet to be undertaken. As a result, red tape and slow service delivery are experienced by common citizens. Strengthening the Anti-Corruption Commission is also extremely important. The autonomy of the organisation should be upheld so that it can perform its duty as a watchdog body with integrity.

However, the fight against corruption cannot be fully successful without involving people from all walks of life in the process. It has to be a collaborative effort between the government and all other stakeholders in society.

In the last 50 years, Bangladesh has set an example of turning its fate from a bottomless basket to a fast-paced economy. It can set another example by becoming a corruption free country in the next 50 years. This will be the best promise to make during the golden jubilee celebration of Bangladesh's independence.

Dr Fahmida Khatun is the Executive Director at the Centre for Policy Dialogue. Views expressed in this article are those of the author and do not necessarily reflect the position of the organisation she works for.