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Bangladesh - Corruption

Bangladesh improved dramaticly since 2004, from formerly the most perceived corruption in the region; while still at high levels of perceived corruption (score of only 26 in 2012), Bangladesh has shown the greatest improvement toward mitigating levels of perceived corruption in the region. However, the ease of doing business, as measured by the World Bank, has decreased.

Bangladesh consistently ranks at or near the bottom of all international indices of corruption, including Transparency International’s Corruptions Perception Index. The TI Corruption Perceptions index for 2014 was 145 out of 175. By one estimate, the prevalence of corruption costs Bangladesh’s economy 2% in growth each year. That missing 2% growth would be enough for Bangladesh to become a middle income country by 2021, a goal set by the Government of Bangladesh.

The current Awami League-led government has publicly underscored its commitment to anti-corruption efforts and reaffirmed the need for a strong ACC. However, efforts to ease public procurement rules and a recent constitutional amendment that reduced the independence of the ACC may undermine institutional safeguards against corruption. Bangladesh is a party to the UN Anticorruption Convention, but has still not joined the OECD Convention on Combating Bribery of Public Officials.

Corruption is common in public procurement, tax and customs collection, and regulatory authorities. Corruption, including bribery, raises the costs and risks of doing business. By some estimates, off-the-record payments by firms may result in an annual reduction of two to three percent of GDP. Corruption has a corrosive impact on the broader business climate market and opportunities for U.S. companies in Bangladesh. It also deters investment, stifles economic growth and development, distorts prices, and undermines the rule of law.

The challenge in Bangladesh is indigenous economic and political reform efforts that will build a stronger, more stable democratic government committed to free and fair elections, human rights, reducing corruption, and combating trafficking in persons. Bangladesh remains one of the most densely populated and poorest countries in the world. Many development indicators are low even by South Asian standards. The Government of Bangladesh is considered weak, corruption is pervasive and chronic, and the nation is vulnerable to recurrent droughts, floods, and cyclones. Intensifying political gridlock, paralyzing general strikes, deteriorating law and order, and a recent surge in extremist violence all create further obstacles to development and progress.

International attention focused on Bangladesh with the publication in 2001 of Transparency International’s Corruption Perceptions Index (CPI), which ranked Bangladesh as the country perceived to be the most corrupt of the 91 countries sampled. 9 This negative distinction was maintained in the 2002, 2003, 2004, and 2005 CPIs. The Dhaka media, particularly The Daily Star and New Age gave extensive coverage to the CPIs, and the CPIs became the subject of much defensive political discussion and questioning of its accuracy among government circles. Although the CPI has been debated because it records perceptions rather than experience, it is clear that corruption is a serious problem that denies the country and its people many of the benefits of development progress.

Corruption and a substantial backlog of cases hindered the court system, and trials were typically marked by extended continuances that effectively prevented many defendants from obtaining fair trials due to witness tampering, victim intimidation, and missing evidence. Human rights observers stated that magistrates, attorneys, and court officials demanded bribes from defendants in many cases filed.

The international community began to focus on corruption in Bangladesh in the early years of the new millennium. The United Kingdom’s Department for International Development (DFID) funded reforms in budgeting and expenditure controls and government audits through the Office of the Comptroller and Auditor General (CAG). These efforts were complemented by United Nations Development Program (UNDP) support. During this time, the World Bank introduced its governance indicators and Citizens Report Card to be used by non-governmental organizations (NGOs) and community-based organizations to evaluate and monitor service delivery by GOB agencies and local authorities. The Swedish International Development Agency (SIDA) and the Danish International Development Agency (DANIDA) also sponsored programs in Bangladesh to generate citizen awareness of corruption and transparency and integrity issues.

Between 2004 and 2008, the Asian Development Bank (ADB), in collaboration with the GOB Anti-Corruption Commission (ACC), invested in a mass public awareness program through a poster campaign. It also edited and distributed with the Islamic Foundation a book of homilies for use by imams at Friday prayers, referring to the Q’oran’s message on corruption. It also conducted a program on personal integrity that reached over 3,000 madrassas (Islamic schools); in each madrassa a team of nine top students developed personal integrity guidelines.

Some in civil society stated the government was not serious about fighting corruption and that it used the ACC for politically motivated prosecutions. Transparency International Bangladesh asserted that political interference in the ACC’s operations had rendered it a “toothless tiger.” A 2013 amendment to the ACC Law removed the ACC’s authority to sue public servants without prior government permission.

The GOB, during the administration of Prime Minister Khaleda Zía (2001–2006), responded to these international concerns by approving the Anti-Corruption Act of February 2004, which reorganized the longstanding but largely inactive Anti-Corruption Bureau into the ACC with greater independence and authority. Then, in February 2007, the military-backed interim GOB (the Caretaker Government) under Fakhruddin Ahmed agreed to accede to the United Nations Convention Against Corruption (UNCAC) and to accept a plan of action to come into compliance with its terms and conditions.

BRAC University’s Institute of Governance Studies (IGS) concluded in a state of governance report that political parties, whichever may be in power at a given time, are the primary vehicles for the aggregation of societal interests and the provision of safety nets, based on patron-client relationships for large parts of the population, instead of an effective state. That report attributes the breakdown in political governance, and thus of transparency, accountability, and integrity, to a) the design of the state and its institutions, b) the clientelistic nature of politics fuelled by greed, and c) the nature of confrontational politics.

The caretaker government detained prominent business leaders using the Special Powers Act, which permitted preventive detention. Most of those persons were then tried under existing anticorruption legislation. Most high-profile cases were handled under the EPR, which initially denied suspects both the right to bail and the right to appeal their cases during the course of the trial. A supreme court ruling restored some forms of bail and the court exercised its authority to consider bail petitions.

The release of many corruption suspects continued to draw comment from some members of civil society, who stated the government was not serious about fighting corruption. Government leaders argued that the government and the ACC would continue to pursue corruption cases despite release of some suspects on bail. In September 2009 the president granted clemency to a fugitive convicted of corruption, Shahadab Akbar, son of deputy leader of parliament Sajeda Chowdhury. The special courts had sentenced Akbar to 18 years' imprisonment for several corruption cases and fined him 15 million taka ($220,000). Some legal experts questioned the granting of clemency to a fugitive and noted that the constitution authorizes clemency only for those convicts who surrender to a court of law.

On 16 March 2008, the ACC filed a money laundering case against Arafat "Koko" Rahman, son of BNP leader Khaleda Zia. Separately, the ACC also filed a money laundering case against Tarique Rahman and his associate Giasuddin Al Mamun. On August 5, the ACC filed charges against Khaleda Zia and others for allegedly embezzling funds from the Zia Orphanage Trust.

Gholam Rahman, the former chair of the Bangladesh Energy Regulatory Commission, was appointed as the new chairman of the Anti-Corruption Commission (ACC) in May 2009. As in prior years, the ACC focused its efforts during the year on developing cases involving public persons who failed to disclose income.

In previous years, the ACC filed more than 1,000 cases related to the endemic corruption that marked previous governments. As the ACC has lost much of its influence, most of these cases have been withdrawn. In 2009 under its new chairman, the ACC filed a money-laundering case against Koko Rahman, the son of BNP leader Khaleda Zia. A separate money-laundering case was also filed against Koko Rahman and Khaleda Zia's other son, Tarique Rahman. Both were living outside the country on bail at the end of 2010.

According to a World Bank Country Assistance Strategy, the government is trying to undercut the authority of the ACC and is severely hampering the prosecution of corruption throughout the country. The reports states that the current government has filed far fewer corruption cases than the caretaker government, and a government commission has recommended that the ACC drop thousands of corruption cases, mostly involving AL members. The report acknowledged that the government has stated a commitment to countering corruption through preventive measures.

According to Transparency International Bangladesh, the government has approved an amendment that would significantly cripple the ACC. One provision of the amendment would require the ACC to obtain governmental approval before bringing proceedings against an individual. The proposed amendment was approved by the cabinet but was not brought to a vote in parliament by the end of 2010.

A review committee headed by the state minister for law, justice, and parliamentary affairs recommended the withdrawal of politically motivated cases that the government and ACC filed prior to 2009. The committee recommended the withdrawal of approximately 1,817 cases, filed mostly against AL leaders, including all the cases filed against Sheikh Hasina. Other cases recommended for withdrawal included one case against BNP leader Khaleda Zia's son, Tarique Rahman; one against BNP leader and former law minister Moudud Ahmed; and one against Jatiya Party secretary general Ruhul Amin Howlader. Ahmed refused the government's offer to withdraw all cases against him and demanded the withdrawal of all politically motivated cases against BNP leaders, including Khaleda Zia and her sons.

The release of many corruption suspects continued to draw comment from some members of civil society, who stated that the government was not serious about fighting corruption. Government leaders argued that the government and the ACC would continue to pursue corruption cases despite the release of some suspects on bail.

The government took steps to address widespread police corruption. The inspector general of police continued to implement a new strategy, partially funded by international donors, for training police, addressing corruption, and creating a more responsive police force.

The judiciary was subject to political pressure from the government. In several cases, the appellate division overturned decisions granting bail to high-level corruption suspects who were leaders of opposition parties. Corruption remained a serious problem within the judiciary. Corruption was a factor in lengthy delays of trials, which were subject to witness tampering and intimidation of victims. Human rights observers contended that magistrates, attorneys, and court officials demanded bribes from defendants in many cases.

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Page last modified: 17-08-2016 17:23:26 ZULU