Where the Bangladeshi PM should really be an ‘Iron Lady’

Zero tolerance for corruption and the guarantee of accountable and transparent administration are like music to our ears, though this tune has now been played for the umpteenth time to the extent that it has lost its credibility.

Mahfuz Anam

Mahfuz Anam

The Daily Star


Representational image provided by The Daily Star.

January 22, 2024

DHAKA – “I will not tolerate corruption and irregularity,” said the newly elected prime minister in her maiden cabinet meeting on January 15, as she began her fourth consecutive term as Bangladesh’s premier. She added that “transparency and accountability” must be ensured.

Zero tolerance for corruption and the guarantee of accountable and transparent administration are like music to our ears, though this tune has now been played for the umpteenth time to the extent that it has lost its credibility. We still want to hear this music in our never-ending and, according to some, utterly foolish hope that this time it will be for real.

Sheikh Hasina has been termed “South Asia’s iron lady” in the latest issue of The Economist. The reasons behind this could be the way she has run the country for the last 15 years, the way she conducted and won (for herself and her party) a fifth term in office, and/or the way she suppressed the opposition BNP, her critics, and dissent in general. But now, by turning her toughest face against corruption, she could truly be the Iron Lady that we need.

In an executive opinion survey titled Bangladesh Business Environment 2023, conducted by the Centre for Policy Dialogue (CPD) in partnership with the World Economic Forum (WEF) in May-July of 2023 and published on January 17, 2024, it was found that 67.6 percent of business leaders identified corruption as the main hurdle for doing business. A total of 71 senior officials of large, medium, and small companies from different sectors were surveyed. Although the survey showed a slight reduction in bribery, the overall impact of corruption on business remained the highest concern.

Broadly speaking, there are two types of corrupt people: those who are corrupt in spite of the system and those who are corrupt because of it. In today’s Bangladesh, the second category of people vastly outnumbers the first. The hard, and of course sad, truth is that most members of that group—people who have severely damaged our economy and have greatly harmed the country—are within the PM’s proximity. Some even enjoy official positions. If we consider the biggest loan defaulters, money launderers, and “Begum Para” inhabitants in Canada and Malaysia, we will find that these are mostly people we see hovering around the powers that be. In fact, many of these individuals flaunt their proximity to power to “tease the honest” and use it as protection against official investigations—should, God forbid, any of the institutions concerned become delusional enough to conduct one.

One of the first tasks the PM needs to undertake—to generate the crucial public confidence that her “zero tolerance” policy against corruption is genuine—is to draw a clear line between “wilful” and “non-wilful” loan defaulters, and go after the former most vigorously. These people are outright bank robbers of a sophisticated variety. What traditional robbers do in the dead of night, these wilful defaulters do in broad daylight. The latter also faces none of the risks of the former, as their actions have a veneer of legality. There is sufficient ground to assume that much of the money laundered abroad originates from these defaulted bank loans. These people borrow money with the intention, from the very outset, of not paying it back and instead sending the fund abroad through hundi. What has been appalling is that, instead of holding wilful defaulters responsible for breaking the law, the concerned laws have been amended, time and time again, to give more time and, worse still, more money from which to pay the requisite instalments. A part of that money was sent abroad, and the banks were left with a bigger loan defaulted. Unbelievable laxity was shown in the cases of these wilful defaulters, making those who actually repaid their loans feel stupid.

The other area in which the PM needs to take a deep look into, and from where a large share of the laundered money comes, is the extensions of deadlines and budgets during the implementation of big projects. According to a Bangladesh Institute of Development Studies (BIDS) study of 361 projects implemented by the Roads and Highways Department during the 2012-13 to 2021-22 period, 80.06 percent—289 projects—needed time extension while 55.68 percent—201 projects—required cost escalation. Of these, 179 projects needed both time extensions and cost escalation. The study also showed that a delay of one month resulted in a cost hike of nearly one percentage point. The delays are in land acquisition, work order placement, negotiations, consultant hiring, etc. All of this happens due to a lack of skilled human resources, said BIDS.

It is our assumption that the continuation of projects exceeding cost and time limits over the past decades as well as our failure to address these issues are not by chance. There is quite a bit of incentive to continue this practice, which drains the public exchequer but fattens personal wallets.

We suggest an immediate setting of a high-powered official body, headed by the PM, to recommend the necessary reforms, the implementation of which should be supervised personally by the PM. If we can implement some megaprojects on time, we can also implement most—if not all other—projects on time. There is a vested interest group that benefits from delays and it is this same group that is preventing positive reforms.

Additionally, we should consider strengthening the Office of the Comptroller and Auditor General (OCAG) and give it more staff and power. To start, the OCAG’s recent reports should be looked at to identify the most damaging irregularities. At the moment, these reports are submitted to the president and parliament, whose Standing Committee on Public Accounts examines them and does some accountability exercises. But, to the best of our knowledge, no tough actions have been taken against corrupt departments and officials for committing gross irregularities. Due to the low priority given to OCAG reports, the overall importance of this vital accountability institution has fallen by the wayside.

A productive and crucial method of ensuring the proper use of resources given to ministries is to strengthen the department-level auditing mechanism, which currently exists more as a formality. If this body can be headed by a powerful chief who will be directly answerable to the minister, a sea of change is likely to occur in the running of the administration.

The Implementation Monitoring and Evaluation Division (IMED), under the Ministry of Planning, brings out very important and well-researched reports on project implementation, especially regarding project cost enhancement and time extensions. These reports give a superb, though limited, picture of how most of our projects suffer both cost and time overruns. Strengthening this body could also serve well to turn it into an effective authority in terms of project supervision. Setting up regional IMED bodies has long been a demand which we believe should be realised in order to improve project monitoring.

The functioning of the Anti-Corruption Commission (ACC) also deserves an in-depth look. Often, the ACC has been described as a toothless tiger. How we can make it effective in fighting corruption deserves immediate attention. One approach could be to amend laws and add more staff and resources to the ACC. Most importantly, its autonomous capabilities and ability to investigate must be improved.

The point we are making is that the practice of auditing and monitoring must be made an integral part of administrative culture in Bangladesh. This is the most difficult of the tasks which PM Hasina will face as, over the decades, the utter lack of auditing and monitoring has been the order of the day.

Corruption today stands as the most dangerous and debilitating barrier to Bangladesh’s advancement. It has greatly corroded general confidence in public institutions. Service-providing officials need to be paid extra “fees” in order for the public to benefit from their services. There is hardly any public institution where anything can be done without speed money. Corruption is far more seriously affecting our future growth than we even remotely realise. The “zero tolerance” should, thus, be implemented with “zero delay.”

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