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EDEN BUILDING TO STOCK EXCHANGE https://dailyasianage.com/news/192454/can-you-escape-corruption Published: 12:37 AM, 25

EDEN BUILDING TO STOCK EXCHANGE

Published: 12:37 AM, 25 August 2019

Can you escape corruption?

M S Siddiqui

Bangladesh is highly regulated but enforcement is either poor or arbitrary. The laws and rules are either back dated or new laws are not formulated considering need of the time. Laws are full of procedure of punishments and authority & discretionary power of bureaucrats. The laws have well defined immunity for the bureaucrats without any liability both civil and criminal in disguise of professional protection.

The interaction of state authority with the citizen occurs in two ways. The first takes place when the state provides the citizen with some legitimate service, in the form of applying regulations that require permission or the issuing of a document. The citizens have no choice but the go for service or permission from different government offices. None can live in this country without "service" of the government departments.

The regulating departments conducted by the Government are the most corrupted sectors of the country. These are ridden with corruption of various dimensions and shades. Apart from bribery, rent-

seeking and misappropriation of funds, the performance of public organizations is adversely affected by

a host of other factors like excessive lobbying, delays in service provision, pilferage and larceny, irresponsible conduct of officials, bureaucratic intemperance, patronage and clientelism.

The common citizen other than business, have to visit government offices for birth certificate, marriage certificate, medical treatment, death certificate, Passport, Police clearance, Educational certificates, employment, character certificates, land registration, income tax, VAT, payment of land revenue, utilities services- water, gas, electricity, transportation, financial service, postal service and a number of permission and clearance from different departments. Most of these are free or for nominal fees but citizens are paying huge amount of bribe for those services.

A wide range of activities requires an official permit. According to Business Anticorruption Portal post :

According to all major ranking institutions, Bangladesh routinely finds itself among the most corrupt countries in the world.

Corruption is pervasive at all levels of society and companies have reported being subjected to costly and unnecessary license and permit requirements. Citizens are unaware of their rights to obtain the

permits and the officials' duties in rendering the service, and information is concealed for profit of the state officials.

The United Kingdom (UK) government has advices to the British business who are interested for

Business with Bangladesh that corruption affects many aspects of daily life in Bangladesh and is often cited as a barrier to private sector development. 'One of the biggest challenges facing UK companies in Bangladesh is how to avoid paying speed money,' it says in a guideline report published on Thursday highlighting the challenges in doing business in Bangladesh. The list of necessary permissions and documents for an Entrepreneur to start a business:

1)

Trade License (City Corporation, Municipal)

2)

Certificate of Incorporation (RJSC)

3)

TIN Certificate (NBR)

4)

VAT/ Registration Certificate (NBR)

5)

IRC (CCI & E)

6)

ERC (CCI & E)

7)

Certificate from Department of Environment (Department of Environment)

8)

Fire License (Fire Service & Civil Defense)

9)

BOI Registration Certificate (BOI)

10)

Factory Set up Registration Certificate (BOI)

11)

Listing and Renewal of RMG Unit (EPB)

12)

BSCIC Registration (BSCIC)

13)

GSP Certificate (EPB)

14)

Quality Certification Marks (BSTI)

15)

Bonded Warehouse License (NBR)

16)

Certificate of Origin (DCCI, MCCI, BGMEA, BKMEA)

17)

Patent Registration (Dept. of Patents, Design and Trademarks)

18)

Design Registration (Dept. of Patents, Design and Trademarks)

19)

Trade Marks (Dept. of Patents, Design and Trademarks)

20)

Others

After start of business, a great deal of time -more than half a person-year-is needed to deal with Government agencies such as customs, port authority, tax department, EPB, and various ministries.

Firms had to spend, on average, 7 percent of their sales revenue to overcome the import and export delays by government agencies. Most exporters (82 percent), employ a person specifically to deal with government agencies.

There was no basis for the argument that unethical business/bribery could increase efficiency by cutting down red-tapism. Enterprises paying bribes also spent a greater share of management times with bureaucrats for negotiations on the deals.

'Speed money' is unofficial, under the counter payments to minor officials to expedite business. Politicians, bureaucrats and law enforcement officials often wield significant discretionary power and there have been some abuses,' according to the guideline titled 'Doing business in Bangladesh:

Bangladesh trade and export guide'.

Bangladesh is ranked among the countries where informal payments and bribes in connection with public utilities occur the most (GCR 2015-2016). Almost sixty percent of firms expect to give gifts or pay informal payments when obtaining operating licenses or public utilities such as a water connection (ES

2013).

Facilitation payments given to public officials to get things done are very common (ES 2013). Regulations are often unclear or even conflicting and are insufficiently publicized (ICS 2015). Businesses should note that registration or regulatory processes are allegedly used as rent-seeking opportunities (ICS 2015). Starting a business costs the same as elsewhere in South Asia, but takes four days longer than the regional average (DB 2016).

The second circumstances of contact occur when the state, in exercising its normal regulatory function, sets fines for violations of regulations. Then the payment due to the state is turned into a private payment to the state official. The citizen does not know how to pay the state, which is presented as a complicated bureaucratic procedure, as opposed to a simple private payment that ends the matter.

Morality and the psychological climate in society affect the level of corruption. The majority of officials are sooner or later faced with circumstances in which they have to choose whether or not to benefit from decision. A decline in morality may be a response to a number of considerations - a feeling of social instability, a low salary not commensurate with the skills and the scope of responsibility of a public servant, injustice in promotion to higher posts, and boorishness or incompetence of superiors. Corruption is often viewed as compensation for losses suffered by an official in relation to his government service.

Corruption captures new offices and spheres of influence, promotes the formation of networks and groups, and allows policy making to be captured for private interest. As economic and political inequality within society increase, social tension increases as well. The very existence of constitutional order is put under threat. Corruption evolves into a problem threatening the country's national security.

At the same time, corruption, especially grassroots corruption, is considered''by default'' as a routine element of everyday life. Accusations of corruption become so routine that the division between the norm and an aberration gradually disappears.

A normal democracy allows some conversion of economic wealth into influence over the state, through

electoral mechanisms and the political influence of special interest groups. However, in its developed form, democracy is inconsistent with the conversion of political authority into economic wealth.

A feature of the transition is the combination of traditions and cultural stereotypes that allow the

personal freedom of virtually unhindered conversion of one form of capital into another. Public officials

consider their posts to be a continuation of the market. Democracy is seen as the freedom of conversion from the normal market into the market for corruption-based services.

Corruption appears to take place when it satisfies a certain formula. According to Robert Klitgaard (1998), monopoly of power, when combined with discretion and absence of accountability, integrity and transparency will result to corruption. Thus, the formula: C=M+D-A, where C is corruption, M is monopoly, D is discretion, A is accountability, I is integrity and T is transparency. This suggests that the absence of AIT (primarily as a consequence of weak governance) in addition to monopoly and discretion, results in corruption. This formula strengthens the theory that corruption is primarily a failure in governance.

Typical features of system prone to corruption are: (UNDP, 2004)

*

Concentration of powers in the executive and weak or non-existent checks and balances

*

Poor transparency surrounding executive decision combined with restricted access to information

*

Elaborate regulatory systems allowing for discretionary decision making

*

Weak systems of oversight and enforcement

8

Soft social control systems/high tolerance for corrupt activities

Corruption is a problem which all governments, at any level of development, have to deal with. The survey conducted by the Transparency International finds that corruption in the public sector takes the same form, whether one is dealing with a developed or developing country. The areas of government activities most vulnerable to corruption are: (TIB, 2000).

* Public procurement

* Rezoning of land

* Revenue collection

* Government appointments; and

* Local government and many others departments

Absence of opposition to the conditions creating corruption allows expansion in both horizontal and vertical directions.

If someone commit a mistake or a crime and not willing to come into arrangement with the official will face lengthy process of investigation and punishment and untold suffering as per sweet will of the regulators and law enforcers. He will be victim of bribery, nepotism, embezzlement, fraud and extortion.

Nevertheless, anti-corruption legislations are not appropriate for corruption situation in Bangladesh and is inadequately enforced or give protection to corrupts. Facilitation payments and gifts are illegal, but common in practice.

The attractiveness of grassroots corruption is explained by the mutual gain and minimal risk for the person accepting a bribe and the person who offers the bribe. A bribe helps to solve routine problems. Bribes can serve as a modest payment for minor violations of laws and regulations.

The writer is a Legal Economist. Email: mssiddiqui2035@gmail.com