Assignment On

The impact of corruption on the economic

growth of Bangladesh
Course Name: Political Economy of Bangladesh.
Course Code - POL 3103

Submitted To
Moonmoon Mashrafy
Assistant Professor, Department of Political
Science, Jagannath University, Dhaka-1100

Submitted By
On behalf of group number-6
Alifa Jannath Mim
ID-B190402041, Session: 2019-2020
3rd year First semester

Date of Submission - 02 March, 2023

 Name Sub topic
Akib Jabed Abstract
B190402048

Anika Sharmila Soma Introduction

B190402045
Farjana Yeasmin Corruption and Economic growth:
B190402047
Farhana binta sohid Corruption in administrative
B190402042 sector and its impact on the
economic growth

Tanaya Biswas Corruption in health sector and its

B190402046 impact on economic growth
Alifa Jannath Mim Corruption in education sector and
B190402041 its impact on economic growth

Jannat Tasnim Corruption in tourism industry

B190402043

Mukta Akter Rumi Some measures to control

B190402044 corruption

Farhana binta sohid&Tanaya Conclusion

Biswas
Abstract: Corruption refers to misusing public power for personal gain. usually it
can be done by an unelected politician,civil servant, journalists etc.Corruption is thing
of great concern for any country.We can easily identify corruption in different sector
in Bangladesh like health sector,administrative sector and others.However,corruption
has adverse effect on the economy of our country. So we have to find out the impact
of corruption and to find out some measures to prevent and to protect our economy
also.This study is designed to determine the detrimental impact of corruption on the
economy of Bangladesh.

Introduction: The economy of Bangladesh is a major developing market economy.

As the second-largest economy in South Asia, Bangladesh's economy is the 35th
largest in the world in nominal terms, and 25th largest by purchasing power parity.
Bangladesh is seen by various financial institutions as one of the Next Eleven, an
emerging market, a middle income economy, and a frontier market. Bangladesh is a
member of the South Asian Free Trade Area and the World Trade Organization.
mainly from the Latin word, we get ''corruption'' which meaning is the decay of ethics,
ill behavior, lack of morality, etc. In the 2018 corruption perceptions index reported
by transparency international, out of 175 countries, the position of Bangladesh is 149,
which signified that Bangladesh is the least corrupt nation. generally, the reasons for
the corruption are a range of discretion; conflict; collusion between main decision-
makers; enforcement of inadequate rules and regulations, laws, poor institutional
capacities, lack of transparency, promotions, postings and transfers, lack of
monitoring and control mechanism (iftekharuzzaman, 2011).

Corruption and Economic growth:

February 2019,Economics of corruption deals with the misuse of public power for
private benefit and its economic impact on society. Economies that are afflicted by a
high level of corruption are not capable of prospering as fully as those with a low
level of corruption.When trade openness increases, corruption control decreases, thus
reducing economic growth in the impact direction of corruption control. Thus,
corruption control overwhelms the impacts of trade openness on economic growth,
the second objective is clarified.As per empirical research, a one-unit increase in
corruption reduces GDPpc by 0.15% to 1.5%. Improved investment and the level of
secondary education are known to cause a significant improvement in per capital GDP
and reduce the harmful effects of corruption on economic growth.Corruption diverts
talent and resources, including human resources, towards “lucrative” rent-seeking
activities, such as defence, rather than productive activities. business, ultimately
raising production costs and reducing the profitability of investments.

Corruption in administrative sector and its impact on the economic

growth in Bangladesh.
Administrative corruption is the abuse of roles, power or resources found within
public bureaucracies. Bribery, Rent-seeking and inappropriate use of government
funds, excessive lobbing ,long time delay in service performance, irresponsible
conduct from the government officials, bureaucratic intemperance have made public
sector department the most corrupt sector of Bangladesh .
Berlin based Transparency International (TI) released annual corruption perception
index (CPI) 2021 on January 25, 2022 Bangladesh got a score of 26 out of 100, equal
to 2020.Transparency International's 2021 corruption perception index ranks
Bangladesh 147 th place out of 180 countries in the index where the public sector is
perceived to be most corrupt department. The public sector conducted by the
government are the most corrupt sectors in the country. Bangladesh is ranked as 2nd
most corrupt country in South Asia.According to a survey by the transparency
International in Bangladesh,2021’the law enforcement agencies of the country
specially the police and RAB are considered the most corrupt sectors.Some 24.4% of
surveyed households were victims of corruption by law enforcement agencies-
'according to national households survey 2021'.The most visible form of corruption is
bribery with 40.1% of those surveyed said the paid bribes or were forced to make
illegitimate payment at some point.However the corruption of administrative sectors
hinder the economic growth of Bangladesh in many ways.For instance when jobs are
given to people who often bribes or share a personal connection. This occurs to the
detriment of competition. The result is that more qualified candidates and firm are
turned down. The more widespread such practices are, the more inefficient the
economy becomes. On the other hand Corruption increased income inequality and
poverty through lower economic growth.

Here are some examples of corruption that hinder the economic growth of
Bangladesh-
In 2020, there were reports of widespread corruption in the distribution of covid-19
relief funds. This led to a loss of public trust in the government and further created
social and political unrest , making it difficult for the government to attract
investment . Thus corruption hinders the economic growth in Bangladesh.In
2021,there were reports of corruption in the procurement of equipment and supplies
for the ministry of agriculture. The led to a reduction in availability of essential
supplies for farmer and a decrease in agricultural productivity affecting the countries
food security and economic growth.In 2022,The Bangladesh Public Service
Commission (BPSC) was criticized for corruption in the selection of candidates for
the civil service making it difficult for the government to attract and retrain top talent
and undermining its ability to promote eco growth and stability.So, in order to
accelerate the economic growth of the country , first of all the administrative sector of
the country should be made free of corruption.

Corruption in health sector and its impact on economic growth

Corruption is prevalent in all sector of the economy. From mis-invoicing the price of
medical equipment to pretending to be doctors, corrupt individuals have adopted
many methods to use public resources for their private gain.The pervasive nature of
corruption tends to reduce the effectiveness of government spending healthcare.If
public health care services are dispensed through a government official,the
government deprived of the revenue from the sales of health care services.The
effectiveness of government expenditure in healthcare reduced since fewer people
benefits from these treatment in the presence.

Corruption during the time of Covid-19 in Bangladesh

The Covid-19 outbreak has exposed the inefficiency,
mismanagement and deep-rooted corruption in the health sector. It is estimated that
over 500 USD billion are lost yearly due to corruption. Research has shown that
corruption can reduce the returns to investment in healthcare.'Bangladesh on March-8
confirmed the first Covid-19 cases & the country so far tallied 3.27 lakh cases with
over 4,500 deaths.With the deteriorating Covid-19 situation in Bangladesh, corruption
surged.As a great initiative PM Sheikh Hasina promptly declared 19 incentive
packages of USD 12.13 billion to ameliorate people sufferings & vaccination.'
A few notable examples of corruption in the health sector during covid-19 Pandemic.

Corruption Specific Details

Medical equipment for The proposed expenditure was USD 20.70 million
Tajuddin Medical college that was at least 10 times higher than actual
expenditure. The products were of poor quality
Website Development The proposed expenditure was USD 1.18 million, the
original expenditure was USD 9438.
Computer Software The proposed expenditure was USD 59/piece, the
market price was USD 12/piece.
Personal protective The proposed expenditure was USD 52/piece, the
Equipment (PPE) market price was USD 23/piece.
Regent Hospital Scam Hospital owned by Shahed (42) carried out 10,500
Covid-19 test of which 6300 were fake report.
JKG Health care scam Approved by Directorate General of health services,
JKG health care set up 44 booth for sample collection.
The workers collected 500 samples, providing fake
test reports to the public, they earns USD 0.94million.
[Sources: Media reports published in March 10, 2020 - July 30, 2020]

The impact of corruption in health sector

Health sector are particularly suspectable to corruption due to the large amount of
resources, information asymmetry, the large number of actor in vaccination, system
complexity and fragmentation & globalized nature of supply chain for drugs and
medical service. A number of international initiatives have been created for
pharmaceutical sub-sector & health related procurement as well as specific risk areas.
According to CPI report 2021,analyzing data from 178 countries estimated that the
deaths of approximately 140,000 children per year could be indirectly attributed to
corruption.In Southeast Asian countries, Thefts,embezzlement and bribery also affect
access to needed medicines, equipment and supplies.According to WHO, 6.2 million
unnecessary Caesarean sections are performed every year ;2 million of them occur in
South-East Asian countries.Good quality medicines may be unavailable due to drug
thefts,stock out or extortion.Profiteer use corrupt schemes to avoid government
regulations of drugs.

Corruption in education sector and its impact on economic growth

Education is a fundamental human right enshrined in the Universal Declaration of
Human Rights (1948). All children of the world are entitled to free quality education,
and must have equitable access to education.The education sector is expected to be
particularly exemplary,and schooling to be fair. However, the reality is very different
from that expectation in Bangladesh.In Bangladesh, the main forms of corruption
identified in the education sector include more obvious forms such as bribery in
admissions and in the disbursement of stipends; nepotism in the recruitment of
teachers; and corruption in procurement.The primary and secondary education
sector of Bangladesh has been going through various regimes of improvisation as
the country has transited from underdeveloped to a developing country.The drop-
out rate has declined over time; nonetheless, the quality of education is noticeably
poor that is reflected in the persisting high dropout rate (approx. 20% in primary level
as shown in graph below), high repetition rate and transition rate across various levels
of education (World Bank, 2013).According to public, based on Transparency
International Bangladesh’s most recent survey in 2013, almost 12% of Bangladeshi
people perceive education system as corrupt or extremely corrupt (Mulcahy, 2015).
The most common form of corruption in education sector involves, illegal bidding
during procurement of education projects. As of corruption in education,
Transparency International Bangladesh (TIB) has evidenced education sector as
third most frequent sector for corruption.

Source: TIB. (2012, December). Corruption in Service Sectors: National Household Survey 2012

Corruption in education has far reaching consequences on social and economic

development, resulting in poorly trained doctors, judges or engineers or under
qualified leaders running the economy. Corrupt education systems produce lower
quality, less qualified employees and raises the costs (due to competition) of attracting
and retaining skilled workers.Corruption in education can also stifle creativity and
innovation in businesses, affecting the growth of businesses.In higher education,
undue influence from government and private sector not only undermines academic
freedom but can also skew research agendas and damage the credibility of academic
research findings

Corruption in tourism industry

The tourism industry has become an increasingly significant part of the economic
growth and was still on the rise because of higher disposable incomes and populations.
In 21st century tourism is the most advantageous and up-to-date business all over the
world. It has become one of the major national and international trade categories.
Moreover, Bangladesh has Archaeological, natural, ecological, cultural and other
tourism products to attract tourists. Therefore, Bangladesh has ample opportunity of
become as a tourist nation. Tourism, mostly a service industry, is more labor oriented
than other sectors of production.Tourism is a globalized business sector impacting the
livelihood of millions of people in all parts of the world. In Bangladesh the direct
contribution of Travel & Tourism to GDP was BDT 193.0bn (2.1% of total GDP) in
2012, and is forecast to rise by 7.7% in 2013, and to rise by 6.4% pa, from 2013-2023,
to BDT 384.7bn in 2023 (in constant 2012 prices). However, over the last twenty
years, the tourism sector in Bangladesh has not made enough progress. The lack of
infrastructure and promotional activities through media are the main reason behind
it.Compared to the past two decades, recently the government and private companies
have invested more money for the development of tourism sector. According to
Bangladesh Parjatan Corporation (BPCx) report in 2007, the government of
Bangladesh promised to spend around Tk. 5.7 billion ($ 81.1 million) for the tourism
sector, which is 2.1% of the total government expenditure. In 2012, government also
committed to spend 50 crore taka for the development of this sector .As any other
“big business”, where significant circuits of capital and information, and power
imbalances exist, tourism is fertile ground for corruption and economic crime. The
globalized scope of the tourism industry renders it into a very challenging field of
action for national legislators and law enforcement agencies. Different stakeholders in
tourism said many limitations like this get in the way of tapping the potentials of the
sector, and this is why Bangladesh is falling far behind other countries. They added it
is unfortunate that Bangladesh still does not have a master plan for tourism, even after
51 years of its independence. such a grim scenario, the country observes World
Tourism Day today under the slogan “Rethinking Tourism”.The government
announced the waiver of all kinds of restrictions, mostly imposed during the Covid-19
pandemic, on foreigners visiting Bangladesh.Md Rafiuzzaman, chairman of Tour
Operators Association of Bangladesh (TOAB), a leading tourism organization, said
the sector has not been able to reap much benefit despite huge prospects. “The main
obstacles are corruption on the bureaucratic tangles, inadequate infrastructure
facilities, backward communications, and a lack of decent accommodation, safety and
security, professionalism and skilled manpower. After all obstacles Bangladesh is
now considered as one of the leading countries having a GDP growth which has been
acclaimed internationally because of exports from Bangladesh including garments,
manpower etc. This economic growth will spur the growth of tourism Industry.

Some measures to control corruption

According to Section 17 of the Anti-Corruption Commission Act 2004, the Anti-
Corruption Commission conducts prevention research and public awareness activities
through which anti-corruption measures are taken in Bangladesh which are
recommended to be effective.

 Introduction of ethics,code of conduct Prevention and strategies are mainly as

follows:
 Introduction of ethics,code of conduct
 Create an area of transparency and accountability
 Other measures to prevent corruption
 Assessment of corruption risk.
To create an anti-corruption culture :
1. Re-evaluation of existing anti-corruption measures
2. Formation of new anti corruption committee and efficiency of existing
anti corruption committee undertake development activities
3. Providing various suggestions to Satta Sangh for increasing morale.
4. Anti corruption committee:
This committee is made to increase public awareness.
 Also organizations with constant monitoring, prioritization, coordination and
capacity building of anti corruption committees.
 Receive complaints of corruption
 causes and effects of corruption is government jobs and public make aware
of.
  Create positive view of government employees to help.
 Engaging local leaders :
 Anti corruption information is local population areas to distribute.
 Distribution of poster leaflets and other propaganda materials to remote areas
through local leaders.
 Prevention category is short-term and long-term interested in participation
 Short-term partnerships included providing specific advice and counsel
 Long-term participate partnership M,OU Otherwise prevention department
and gives more importance to long-term partnership.

Conclusion
Corruption is a major silence in Bangladesh and has a negative impact on the
economic growth of Bangladesh. The government must take strong measures to
combat corruption and increase transparency and accountability in all areas related
to our economy. This includes strengthening the legal and regulatory framework ,
increasing the independence of regulatory bodies and promoting a culture of
accountability and transparency . By addressing corruption, Bangladesh can create
more stable and predictable business environment as well as promote economic
growth in Bangladesh.

References
1. mo, P.H. (2001, corruption and economic growth. Journal of comparative economics.
2. Pulok m.H (2012), The Impact of corruption Economic development of Bangladesh.
3. Rahman A. (2016) Estimating the effects of corruption Implication for Bangladesh.
4. miah. m.m (2021), The impact of Corruption on economic growth in BD.