Corruption is the main factor that increases microeconomic risks in Bangladesh and also acts as a risk multiplier for other distortions, a joint UK and US study revealed recently as reported by this daily on Thursday. The study titled ‘The Inclusive Growth Diagnostic Study’ was jointly funded by UK Aid and US Agency for International Development [USAID]. The British government and the USAID produced the study surveying the investment climate in Bangladesh and identifying the importance of addressing energy availability and protecting property rights.
Corruption is one of the main obstacles to sustainable economic, political and social development, for developing, emerging and developed economies alike. Overall, corruption reduces efficiency and increases inequality. Estimates show that the cost of corruption equals more than 5% of global GDP (US$ 2.6 trillion, World Economic Forum) with over US$ 1 trillion paid in bribes each year (World Bank). It is not only a question of ethics; we simply cannot afford such waste. IMF research has also shown that investment in corrupt countries is almost 5% less than in countries that is relatively corruption free. The World Economic Forum estimates that corruption increases the cost of doing business by up to 10% on average.
Other international studies also indicate that money of most of official development assistance, is stolen through high level corruption from public budgets in developing countries and hidden overseas.
Using ordinary least squares estimations an economist finds that a 1.0 percent increase in the corruption level reduces growth about 0.72 percent, which translates to a one-unit increase in the CPI reducing the ECG rate by 0.545 percentage points. He argues that the most important channel through which corruption affects growth is political instability—accounting for about 53 percent of the total effect. The analysis also finds that corruption reduces the level of human capital and the share of private investment (Journal of Comparative Economics, March 2001).
All of the facts are universally known—then why doesn’t corruption stop? The answer is simple—the political and moral culture of developing countries like Bangladesh, among others, are completely apathetic towards the reduction of corruption. It is anathema for the parties which make up our political culture of kickbacks and palm greasing to do anything to reduce corruption, as it would be ultimately harmful to their interests. The fact that it would be harmful to the nation is completely lost on them. A culture of ‘only our pockets should be filled’ has emerged out in our power structure(s). Here, the politicians—who are in reality business persons engaged in politics to safe-guard their ill-gotten wealth—and the permanent government have formed a well-knitted interest group who acted in unison to amass more wealth. All state institutions have joined the state sponsored corruption for the purpose of personal gains.
We must have a corruption free government. With that aim, the Anti-Corruption Commission was given independence. But the Commission lacks guts and courage to keep the government corruption free.
