SOMETIME ago, a World Bank study calculated that corruption in public expenditures or procurement activities shaves off over 2.0 per cent of the GDP growth in Bangladesh. This has been estimated at about $3.0 billion annually. Thus, it was expertly observed that the country's GDP can increase substantially if the government's procurement system can be made even partially free from corruption. It was reported sometime ago that the government of Bangladesh (GOB) was under pressure from the donors to enact a new law at the fastest to curb such corruption in the public procurement processes and that it had drafted the law or the proposed guidelines to govern procurement procedures. The donors are linking the disbursement of their pledged aid money with the introduction and implementation of this legislation when the economy is suffering badly from non-disbursement or significantly slow disbursement of aid funds due to this factor. But the adoption of the law to deal with procurement would be seen as satisfactory only after it is finally adopted in an effective form. For there are powerful beneficiaries of the present system within the government itself and they remain as determined and keen as ever to try and reverse or amend the proposed guidelines to serve their needs. The obstructionism posed by these interest groups were highlighted in a report in this paper last Sunday.
The private sector has grown substantially in this country. But notwithstanding this growth, the public sector is still, by far, the biggest spender. The government spends over 60 per cent of its development budget in public procurement. It mobilises huge resources through its taxation or fiscal measures and then spends the same in a myriad of ways for developmental activities or for discharging various services. If such resources are utilised efficiently without corruption, then the same can be very helpful for the economy. For example, if public sector funds for road building and development are well spent, the same can lead to conservation of resources as frequent repairing needs of roads would fall and the saved resources can be channeled to other areas in need of funds. Another example can be an equipment of poor quality purchased by a government department that needs frequent repairs due to breakdowns. If the equipment purchased at the outset is of the desired quality, then much saving can be expected as frequent repairs of it will not be necessary. Thus, a very long list can be made of the areas where the procurement activities of the government, properly managed, can effect significant saving of resources and yield substantially higher value from their use. But this is not possible, at present, because of the corruption-infested procurement processes.
The government's tendering system -- for procurement -- at present is such that suppliers can manipulate it to their advantage defeating grossly the stated objectives of official procurement policies such as buying at competitive prices the best commodities or services. The tendering rule of giving the procurement order to the lowest bidder is abused too frequently to supply poor quality or inferior products. This principle elbows out producers or suppliers of reputed and standard products. The supply of sub-standard goods could be deterred if there existed proper inspection procedures to discriminate between standard goods and sub-standard ones. But bureaucratic and other vested interests are keen to keep alive such inefficiencies or incapacities in the various procurement processes to gratify their rent-seeking instincts. In this context, it has become imperative to move speedily for putting in place a transparent public procurement policy at the earliest. Actions to free the procurement activities of the government from the clutches of the vested interests will make it possible for the process to be made efficient, honest and transparent. For this purpose, political resolve and hard actions will be of utmost importance.