Corruption: A Legacy Not Easy To Give Up For Bangladesh – Analysis


By Kazi Mukitul*

Corruption, an infamous and recognised evil, remains a major challenge to socio-economic development in Bangladesh. From the title of champion in corruption in the early 2000s, the country’s progress in fighting the evil is still mediocre, compared to pompous claims by the policy makers.

Bribe given to different government sectors is equivalent to more than one-tenth of the country’s national budget and around 2.4 per cent of GDP, which is more than the expenditure in education and health sector. The International Anti-Corruption Day on December 9 comes to remind us of our pledge against corruption in the coming New Year.

The Bengali translation of corruption is ‘durniti’, which literally means ‘ill practice’. The popular definition of corruption is ‘the use of public power for personal gain’. However, corruption can and does exist equally in private sector in the form of syndicate, bribe and nepotism etc.

The literature on corruption provides a range of typologies depending on size and nature of corruption, e.g. petty and grand corruption ( Frederick Stapenhurst and Petter Langseth), decentralised and centralised corruption (William Easterly) and, predictable and unpredictable corruption (Akbar Ali Khan).

When corruption involves major officers and large sum of money, then it is a grand corruption, and its opposite is called petty corruption. On the other hand, under decentralised corruption, there are many bribe-takers with no coordination while under centralised corruption, a government leader organises all corruption activities and distributes the gains to each official.

According to Easterly, decentralised corruption creates worse incentives for growth and is more damaging than centralised corruption. Similarly, corruption is predictable when the briber knows that his act of bribery will pay off the objective, while corruption is unpredictable when completion of the work is uncertain even after paying the bribe. Generally, corruption is predictable in autocracy or overly centralised government than in a decentralised one.

The act of corruption is not a recent phenomenon in human history. From Aristotle’s Greece in 300 BC to Mobutu Sese Seko’s Zaire in 20th century, corruption has been evident across time and place.

In South Asia also, evidence of corruption dates back thousands of years. In his book, Akbar Ali Khan pointed out contemporaneous examples of corruption that existed 2,000 years ago through the writings of Manu and Kautilya. It was thus widespread that Kautilya remarked: “It is impossible for one dealing with government funds not to taste, at least a little bit, of the King’s wealth.” Similarly, in Bengal, trace of unpredictable corruption is found in 16th century poems and folksongs.

However, historical evidences show no antagonism between corruption and political and economic development. Even some policy-makers considered corruption to be favourable for economic expansion. For instance, Samuel Huntington (1968) prescribed bribe-taking bureaucrats than honest bureaucrats in overly centralised bureaucracy (to overcome the red tape problem).

As a result, corruption, or ‘a growth killing incentive’ as William Easterly calls it, did not attract much attention of the development economists up until the 1990s. In 1995, Roper Starch Worldwide conducted a poll among citizens of 19 developing countries and corruption was ranked fourth among 15 national concerns of the citizens after crime, inflation and recession.

The most common drawbacks of corruption pointed out in recent studies include a) macro-economic instability, b) environmental degradation, c) socio-economic inequality and d) discouragement for foreign investment etc.

Besides, corruption is not only inversely related to growth but also associated with large budget deficit. The average budget deficit for the most corrupt countries is 6.7 percent of the GDP (Easterly, 2002).

Hence corruption became a hot topic in the development arena in the early 1990s and the World Bank, Transparency International (TI) and PRS groups came up with different measures to access level corruption, but mostly based on perception.

In a survey of the Credit Risk Guide in 1990, Bangladesh scored 1 (out of 6) on the quality of bureaucracy and 0 on corruption. Referring to this, William Easterly sarcastically stated: “In Dhaka, you can wait for a cold front in hell to get your business permit, or you can pay a bribe.”

Since then, however, Bangladesh has made great strides, especially in the field of education and gender parity to become a role model for other developing nations.

Nevertheless, the ghost of corruption kept haunting the very fabric of the country’s socio-economic development. From 2001 to 2005, Bangladesh was champion in corruption for five successive years in the Corruption Perception Index (CPI) by Transparency International.

According to the recent report, Bangladesh ranks 139th among 168 countries. Similar disappointing picture is noticeable in Worldwide Governance Indicator (WGI) 2015 of the World Bank. In WGI, Control of Corruption is one of the six indicators of governance and Bangladesh scored only 18 out of 100, which is lower than India (44), Pakistan (24), South Asia (38) and even of Sub-Saharan Africa (31).

Similarly in other indicators of WGI, e.g. Rule of Law, Regulatory Quality and Government Effectiveness, Bangladesh falls behind the lowest of the standards (i.e. South Asia and Sub-Saharan Africa), let alone those of the OECD countries (whose average score is above 80 in all the 6 indicators). (Source: The World Bank)

Beside international indices, national reports and studies give deeper impression of the extent of corruption in Bangladesh today. A report published in Prothom Alo earlier this year (March 27) shows that different private and public institutes have embezzled TK 30,000 crore in just the last seven years.

The high profile corruption scandals include Basic Bank, Destiny Group, Hallmark Group and reserve theft from Bangladesh Bank lately. Furthermore, Mother textile, Madaripur textile mill, Rupali Bank, Benetex Limited, Farmers Bank and Moon Group are also charged with embezzlement of thousands of taka which, however, got less media exposure than the former cases.

On the other hand, National Household Survey (conducted by TIB) shows that 63.7 per cent of the households experienced some form of corruption from different sectors. The level of corruption was highest in labour migration (77 per cent) followed by law enforcement (76 per cent) and land administration (59 per cent). Bangladeshi citizens were forced to pay TK 219.5 billion (13.4 per cent of national budget and 2.4 per cent of GDP) annually in the surveyed sectors as unauthorized payment. For instance, for service in law enforcing agency, people paid bribe of TK 7,080 on an average. However, besides direct financial losses, corruption led to the loss of hundreds of human lives (e.g. Rana Plaza collapse) and threats to environmental degradation (e.g. irregularities in Rampal and Matabari Power projects).

Establishment of Anti-Corruption Commission, Right to Information Act 2009, and Whistleblower Protection Act 2011 are some key steps taken by the government to fight corruption. However, the abuse of power, loopholes in laws and lack of sincerity by the government deters anti-corruption initiatives. For instance, none of the six big scandal groups cited in Prothom Alo news (March 27) has received any court penalty/sentence so far (even no case was filed against two of them).

Kleptocracy is a threat to democratic values of any country. Over the years, policy-makers and academicians have proposed a number of initiatives to curb the practice of corruption in both public and private sectors of Bangladesh. These are, for instance, reduction of the size of the government, monitoring cell in the ministry and in the banks, more access to RTI, strengthening governance, and assigning candidates in key posts based on honesty and meritocracy, not for political affiliation etc.

Examples from other countries show that legal punishment and institutional reforms are difficult but not impossible. The resignation of Dr. Atiur Rahman, former Governor of Bangladesh Bank, is an exemplary step in our legacy of responsibility renunciation. Beside institutional reforms, elimination of incentives for corruption is essential to stop the vicious circle in corruption.

In addition, education can lend an important edge to the fight against corruption in Bangladesh. TIB’s National Survey report shows that the illiterate people in rural areas are more victim of corruption than their urban counterpart.

Therefore, literacy campaign and increasing awareness (through curriculum and teaching) among students will have better return in the long run than many short-term futile initiatives. Along with moral education, exemplary role models in the family, community and in the government can become the source of motivation for younger generation of Bangladesh against corruption, not only of capital but also of the mind that produces events like Holey Artisan Bakery.

*Kazi Mukitul is an Asia Fellow, Yayasan Khazanah Foundation, doing his Masters at the Department of Development Studies, University of Malaya. Comments and suggestions on this article can be sent to [email protected]

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