Published:  12:26 PM, 09 March 2021

Corruption-the worst enemy of growth and development

Corruption-the worst enemy of growth and development
 
Corruption is regarded as a big hurdle of economic progress because it has an adverse impact on the way to growth and development of any country, especially the developing countries. Defining corruption can be a big challenge but it has many forms and perpetrators are skilled in developing new techniques to be corrupt and cover their tracks. Corruption may be defined as the abuse of entrusted power for private gain. Berlin based Transparency International which deals with worldwide corruption uses the three elements of corruption. Firstly, corruption occurs in both the public and private sectors. This includes media and civil society actors. Actors can be individuals, companies, or organisations such as a political parties. Secondly, it also involves in abusing power held in a state institution or a private organisation. Thirdly, both sides involved in the corrupt act benefit, either in terms of money or undue advantage.

Corruption is considered a strong foe on growth and development. The academic literature, however, finds different effects of corruption on economic indicators. In this view, corruption helps to overcome cumbersome bureaucratic constraints, inefficient provision of public services, and rigid laws, especially when countries' institutions are weak and function poorly.

Economies that are afflicted by a high level of corruption-which involves the misuse of power in the form of money or authority to achieve certain goals in illegal, dishonest or unfair ways-are not capable of prospering as fully as those with a low level of corruption. Corrupted economies are not able to function properly because corruption prevents the natural laws of the economy from functioning freely. As a result, corruption in a nation's political and economic operations causes its entire society to suffer entirely in growth and development.

The World Bank has identified corruption as "the single greatest enemy to economic and social development" and more than US$ 1 trillion is paid off for bribes over the world as a whole each year. The average income in countries with a high level of corruption is about a third of that of countries with a low level of corruption. Also, the infant mortality rate in such countries is about three times higher and the literacy rate is 25% lower. No country has been able to completely eliminate corruption, but studies show that the level of corruption in countries with emerging market economies is much higher than it is in developed countries.

A working paper of the International Monetary Fund (IMF) shows that corruption has an adverse impact on the quality of education and healthcare provided in countries with emerging economies. Corruption increases the cost of education in countries where kickback and connections play an important role in the recruitment and promotion of teachers. As a result, the quality of education decreases.

Many countries with emerging economies suffer from a high level of corruption that slows their overall development. The entire society is affected as a result of the inefficient allocation of resources, the presence of a shadow economy, and low-quality education and healthcare. Corruption thus makes these societies worse off and lowers the living standards of most of their populations.

Corruption is also pervasive in Bangladesh, a key challenge against development and social transformation. Corruption is so deep and wide at both micro and micro levels that it threatens to become a way of normal life. It is not a local but global problem. It exists in all countries of the world-big or small, developed or developing- which is exactly why the UN Convention against Corruption was adopted on December 9, 2003. The Government of Bangladesh has also set a great precedence for other Member States of the UN by deciding to officially observe the International Anti- Corruption Day.

According to 'Human Development Index and Indicator' published in 2018, the life expectancy of Bangladesh's people has increased. Bangladesh has fulfilled the criteria of developing countries in the last 10 years. And from the purchasing power side, Bangladesh is the 37th largest economy in the world. According to the US-based international organization Price Water Cooper House, within 2030, Bangladesh will be the 28th largest economy in the world. According to the Center for Economics & Business Research Report 2019, by 2032, Bangladesh will be one of the world's 25 biggest economies of the world. In 2033, Bangladesh will be behind the countries like Malaysia, Sweden, Switzerland, Singapore, Vietnam and South Africa as far as development is concerned.

Recently Berlin-based Transparency International's (TI) unveiled a report titled 'Corruption Perceptions Index (CPI) 2020' where Bangladesh ranks 12th among the most corrupt countries in the world and its scores was 26 out of 100. Bangladesh ranked 14th in 2019 and the score was same in both 2016 and 2019. According to Transparency International Bangladesh (TIB), Bangladesh's position in curbing corruption is disappointing. Out of the eight countries in South Asia, Bangladesh is ahead of only war-torn Afghanistan, meaning Bangladesh ranks second in South Asia, it indicates that there is no progress in corruption in Bangladesh. A score of zero means the most corrupt and a score close to 100 means the least corrupt country.

The report is basically based on the data on various issues including kickback in the public sector, nepotism in public sector employment, and the tendency to occupy the state power. Various issues including democratic accountability, the rule of law, the courage and practice to bring high-level corrupt individuals to justice, and the freedom of the media have helped in formulating the report. TIB pointed out that in case of Bangladesh, certain factors including the abuse of power, suppression of accountability of democracy, culture of impunity have inflicted the anti-corruption image of the country.

Now, if corruption could be prevented, the country's development would be more dynamic. Peace in the country will be established and values of the people would be strengthened. The incumbent government has adopted the policy of zero tolerance against corruption. Prior to this, the government has campaigned against terrorism, operation against drugs. After this, zero tolerance policy has declared against corruption." After being sworn in as prime minister, a meeting with senior officials, the incumbent prime minister mentioned, "Although it is not possible to eradicate completely corruption from the country, our government has a responsibility to prevent corruption as much as possible so that it does not impede the development of the country and let all our success fade."

Bangladesh could have achieved at least 2-3 percent higher annual GDP growth if corruption could be moderately controlled. This is according to a credible research and referred by the former finance minister. The other dimension of cost of corruption is that while its burden falls upon everyone it is substantially higher for households in lower income category than those with higher income. Transparency International brandished Bangladesh the most corrupted country in several times, now the situation has been upgraded but not to the satisfactory level. More focus need to be more developed the situation.

Corruption increases the cost of investment and entrepreneurship. It lowers the quality and effectiveness of public expenditures; reduces revenue collection and promotes rent-seeking. In a nutshell, corruption has detrimental effect on economic prosperity and sustainable development of a country through several transmission mechanisms.

Md. Zillur Rahaman is a banker and freelance contributor.




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