Dealing with financial corruption with zero tolerance

It is a matter of great concern that Bangladesh has been experiencing widespread corruption for many years at almost all levels, impacting the growth of the economy and the country as a whole. Unbelievable cost overruns for national projects, siphoning off of funds mercilessly, severe noncompliance with rules and regulations, the exercise of excessive powers and undue influence, lack of disciplinary action against wrongdoers, political patronisation, etc., have contributed to this frustrating situation. When vested interests, greed, and unhealthy competition for making money are involved, it is very difficult to curb corruption because the habit of corruption has already flowed into the veins. In a society where people's status is measured in terms of money rather than looking at the background of how that money was earned, it is again difficult to bring society back on the right track.

No doubt, large-scale and high-level corruption takes place in connivance with other associates, producing fake and unauthentic documents and records. Surprisingly, corrupt people tend to shift the blame to others under some pretext or otherwise. In this regard, a few basic questions are to be answered from the right perspective. Who violated rules and regulations? Who accorded the approval? What were the process lapses? Were any unauthorised powers exercised? And who were the ultimate beneficiaries of the transaction, directly or indirectly?

Universally, power and money have a close link. High levels of integrity, ethical standards, morality, accountability, freedom from greed, in some cases religious fear, enviable personal reputation, and so on help in reducing corruption. Prompt legal actions and bringing the culprits to task play an important role in minimising the level of corruption to a large extent, if not entirely.

Experience says the most common areas of corruption, among others, are procurement, public services, taxation, management of public properties, and financial fraud.

It is a common phenomenon that corruption is taking place in a visible manner, especially unearthed in media reports, but no actions are initiated instantly. Actions are usually taken and experts involved at a later stage when the damage is already done. In many cases, due to delayed initiatives for investigations and fraud examinations, vital evidence and records are destroyed or removed, putting the investigations in a challenging situation. Even because of the lengthy legal process, culprits get away from penalties, and in many cases, recovery outcomes become insignificant. Furthermore, the lack of competent and independent experts is also another important factor. The nature of crime and corruption has changed due to digitalisation and the use of technology. Hence, investigation processes, their tools and mechanisms, and approaches have to be changed as well.

Committing corruption and helping to commit corruption are the same. Whistleblowing is important and has to be built into the system. Whistleblowers must be protected by law as well. The role and knowledge of law enforcement authorities, especially the persons involved in fraud investigation, are very important.

Many times, the government has initiated measures to curb corruption without any visible success. Basic reasons for the repeated failures are attributable to delayed investigation, lack of sufficient and competent experts, political patronisation, corrupt instigation personnel, and so on. Political will and sincere efforts of the country's leadership are prerequisites in curbing corruption. When the top leadership in the country and his/her family members are free from corruption, more than 50 percent of corruption is gone. Then, if legal actions are initiated and culprits are brought to task, corruption is further reduced to a large extent.

There is no evidence in the world that a corrupt country has developed. Temporary or short-term economic development may be seen in a few cases as exceptions. Developed countries, among others, possess a corruption-free society, good governance, and penal actions against corruption, and in fact, this has a direct link with a low corruption index. We should continue to strengthen our efforts to adopt a policy of zero tolerance without any delay. Otherwise, all initiatives taken will not produce any favourable results, and ultimately the country's economic growth will remain at a low level.

The writer is a senior partner of Hoda Vasi Chowdhury & Co and past president of The Institute of Chartered Accountants of Bangladesh