Combating corruption

29 April 2013 06:30 pm - 0     - {{hitsCtrl.values.hits}}


That corruption is widespread in Sri Lanka is an accepted fact.  That it has become so much a part of the fabric of our society as to be unquestioned and unassailable is also an accepted fact.  Corruption in our country comes in many forms. It may be nepotism, bribery, and extortion. Nepotism takes the form of the appointment of relatives, friends or political associates to public offices regardless of their merits and the consequences on the public weal. Bribery is the act of accepting gifts or favours offered, the objective being to induce the person to give special consideration to the interests of the donor.  Extortion can take the form of either gifts or favours as a condition to the execution of public duty or the abuse of public funds for one’s own benefit.

Both in the private and public sectors, the shadow of corruption is preventing transparency in competitive bids, and in the end, consumers are not getting the best possible product or service. So business decisions are not always done with the most cost-effective, quality offering because sometimes corruption gets in the way and distorts the laws of the market of supply and demand and healthy competition for business.

How can we overcome these challenges? There is no easy answer.

However, in the case of the private sector, one of the possible ways to assist them is to insist very robust and publicly available anti-corruption policies in their vision/mission statements. Private organisations that publicly disclose their anti-corruption policies will have societal goodwill and, in a proactive, forthcoming manner, let all of their partners and end-customers (potential and existent) know that they will not participate in under-the-table schemes and pay-outs.

Approaches to curbing corruption in the private sector should follow dual principles of enforcement and partnership. On the one hand, Government should impose standards for company management, transparency rules, reporting obligations and auditing requirements; The Governments should also provide for effective supervision and mechanisms to enforce compliance with these rules. Equally important, on the other hand, are the Government’s efforts to foster and strengthen the private sector’s own initiatives to enhance internal control mechanisms and to establish and promote corporate ethics and compliance systems`

In the public sector, tangled regulations and weak rule of law provide ample opportunities for public officials to engage in corrupt practices without punishment. Those two factors push some people to do business informally as a means to profit far more than they would if the possibility of corruption did not exist. The result is an increasingly unequal society, in terms of the opportunity to create wealth and improve living standards.

To fight corruption, it is essential to understand that corruption is a symptom of over-regulation, lack of rule of law, and a large public sector - not the root of the problem. The real problem is the government action/regulations causing undesired behaviour of the private sector. The optimal solution would be to eliminate burdensome regulations so that unethical behaviour does not occur.

The Government must advance economic freedom in all possible areas of the economy, with particular emphasis on regulations affecting small and medium business, in order to decrease corruption. The global Index of Economic Freedom is an excellent guide to identify what is obstructing economic activity and, therefore, perpetuating poverty. Sri Lanka’s economic freedom score is 60.7, making its economy the 81st freest in the 2013 Index. Sri Lanka’s score is above the world and regional averages. However, Sri Lanka continues to score below the world average in freedom from corruption (score of 33.0), and marginal reforms have failed to generate much improvement.

The Government must also preserve the independence and effectiveness of the judiciary to punish corrupt actions. Economic freedom with a strong rule of law will foster a culture of investment, job creation, and institutional respect--all essential factors in massively improving the living standards of ordinary people.

Corruption thrives on systemic weaknesses. Efforts to prevent corruption should, therefore, aim at eliminating these weaknesses and enhancing integrity and transparency. This goal is common to corruption prevention in the key sectors – public administrations, the political sphere and the business sector. The means of putting this objective into practice, however, differ among these sectors, due to the variety of regulatory frameworks and operational environments.

Most countries that have endorsed the Anti-Corruption Action Plan, for example, attribute an important role to administrative reform. The various strategies to prevent corruption address integrity, effective procedures and transparent rules. The demand for the accountability of political leaders and the transparency of political parties has begun to trigger reform in those areas. Private business has also become a focus of anti-corruption reform: besides being object of state oversight, this sector has started its own initiatives to curb corruption. Administrative rules and procedures and the overall management and oversight of public administration are also under review, with a particular focus on the reform of public procurement. Corruption prevention in the political sphere also seems to draw growing attention these days.
It is time, we-Sri Lankans too, endorse an Anti-Corruption Action Plan. The integrity and competence of our public officials are fundamental prerequisites for a reliable and efficient public administration. We therefore have to adopt measures that aim to ensure integrity in the hiring and promoting of staff, provide adequate remuneration and set and implement clear rules of conduct for public officials. These measures will address the integrity and competence of the public service at the level of the individual public servant. In addition, we should strive to immunise the public administration against undue interference at the institutional level. The measures taken should aim at harmonising and clarifying procedures and at reducing discretion. Where this is impossible or impractical, ways of controlling or varying the contacts between public officials and citizens should be employed to prevent corruption. Particularly corruption-prone sectors, such as public procurement, should be brought under independent bodies and strict procedures that assure oversight and transparency. Audit and other forms of scrutiny and survey will add to the efforts to increase accountability of the public service.

A clear and unambiguous regulatory environment is another key element for an effective, transparent and honest public administration, since clear and verifiable rules and procedures leave less room for corrupt practices. Discretion and fuzziness in statutes regulating private economic activities are particularly problematic.

Extortion and acceptance of bribes are by no means limited to public officials. On the contrary, numerous corruption scandals that were uncovered over the last decade involved high-ranking politicians and often seriously undermined political and social stability in the country. We have to react to these incidents by setting up regulations that strive for the transparency and integrity of political parties, politicians and elected senior officials.

Bribes paid to influential decision makers are often disguised as donations to political parties or electoral campaigns. Disclosing, controlling, restricting and auditing the funds of political parties and electoral campaigns are thus crucial means of detecting and preventing high-level corruption and avoiding inappropriate practices in the political arena. A number of countries subject budgets of political parties and the funding of electoral campaigns to reporting obligations and, in some cases, public scrutiny. We can also adapt similar measures in our legal system.

Regulations on dismissal and disciplinary measures applicable to public officials do not apply to elected politicians in Sri Lanka.  Therefore, Codes of Conduct and other measures need to be developed for our politicians and any conviction proven for serious breaches of the leadership code should result in dismissal from office and disqualification standing for election or being appointed to certain senior positions for specified years.

Corruption – whether in public or Private sector-  not only raises moral concerns; it also runs counter to the long-term interest of the country, because it increases costs and risks, undermines efficiency, lowers country credit rankings, and deters investors. It is time we sit back and take a hard look at this serious problem!

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