Thursday | 16 January 2025 | Reg No- 06
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Thursday | 16 January 2025 | Epaper

Corruption: The worst enemy of growth and development

Published : Saturday, 13 February, 2021 at 12:00 AM  Count : 670
Md Zillur Rahaman
Md Zillur Rahaman

Md Zillur Rahaman

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 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.

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. 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 is a key challenge against development and social transformation. It exists in all countries of the world, which is exactly why the UN Convention against Corruption was adopted on December 9, 2003. 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. According to Transparency International Bangladesh (TIB), Bangladesh's position in curbing corruption is disappointing. It means that there is no progress in corruption in Bangladesh.

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. Despite the zero tolerance against corruption, this menace still exists in the country. Bangladesh could have achieved at least 2-3 per cent higher annual GDP growth if corruption could be moderately controlled. 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 had labelled 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.
The writer is a banker and freelance contributor









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