EXPORTING CORRUPTION REPORT: A TIMELY ALERT FOR BANGLADESH
It’s no big news that corruption is a global issue that spares no nation. What made global headlines on 13 October, however, is that corruption is being indiscriminately exported by multinationals and the world’s leading exporting countries are brazenly failing to enforce action against foreign bribery.
Corruption in inward foreign trade worsens an already dire situation
Corruption is often most acutely felt in developing countries like Bangladesh which once ranked for five successive years (2001-2005) at the very bottom of the global Corruption Perception Index (CPI).
But too often we forget that corruption is an international problem which is systematically exacerbated by external actors through bribery in international trade and investment.
While the CPI score for Bangladesh has somewhat improved in recent years, corruption remains a key challenge that hinders development and social change in a country widely touted as a development dilemma.
According to many socio-economic indicators like GDP and HDI, Bangladesh has been performing commendably and steadily for over two decades, though corruption costs the country no less than two percent of GDP, according to A. M. A. Muhit, Former Finance Minister of Bangladesh, quoted in The Daily Star on 10 July 2015.
Bangladesh also performs poorly on nearly every governance indicator, including the Rule of Law Index, Regulatory Quality Index, Government effectiveness index, Political stability index, Voice and accountability index, Press Freedom Index, Political rights index and civil liberties index.
In addition, money laundering is a substantial concern for Bangladesh, as conservative estimates put the amount of annual illicit transfers out of the country at over US$10 billion, most of which is through improper invoicing in foreign trade.
Bad company for the country
The Exporting Corruption report sounds a timely alarm for Bangladesh. The country’s leading foreign trade partners are among those it categorized as dismally failing to enforce committed action against foreign bribery.
Notably, some of the biggest global exporters are showing the worst track records in compliance of their own pledges against foreign bribery.
The worst performers include China, Japan, India, Hong Kong, South Korea, Singapore, the Netherlands, Canada and Mexico, many of whom are Bangladesh’s largest trade and investment partners.
China, the world’s largest exporter and Bangladesh’s most important trade and investment partner, has failed to open a single investigation into foreign bribery between 2016 and 2019, though Chinese companies have been allegedly involved in multiple scandals and investigations by other countries.
This is also the case of two other non-OECD major exporters, Hong Kong and India, which are also among top trade partners of Bangladesh. Even countries ranking high in the CPI, such as Singapore, another important economic partner of Bangladesh, show little to no enforcement against foreign bribery.
The time to act is now
Bangladesh stands to lose the most by turning a blind eye to its commercial partners’ corrupt practices. Concrete actions against foreign bribery must be taken by exporting countries consistent with their commitments under the UN Convention against Corruption (UNCAC) and OECD Anti-Bribery Convention.
The deep-rooted corruption that already plagues the country has been and will likely continue to be further exacerbated by corrupt practices of foreign companies at a time when Bangladesh badly needs to expand both export and import as well as investment in order to increase employment and income.
Time is running out for the government and other stakeholders to mainstream rigorous anti-corruption practices in their business and investment dealings with foreign entities. Because it is a State Party to the UNCAC, Bangladesh can cooperate with other State Parties to fight against cross-border corruption, especially illicit financial transfers, most of which are related to international trade through misinvoicing.
Dr Iftekharuzzaman is Executive Director, Transparency International Bangladesh.