Page last updated at 23:12 GMT, Wednesday, 29 July 2009 00:12 UK

Corruption still haunts Bangladesh

By James Melik
Business reporter, BBC World Service, Bangladesh

Sheik Hasina
Corruption charges against Sheikh Hasina were later withdrawn

At the end of 2008, voters in Bangladesh hoped the new government would continue the fight against corruption.

Four years earlier the country had been languishing at the bottom of the Transparency International list of the most corrupt in the world.

Sheikh Hasina's Awami league was returned to power in December 2008 after pledges that they would stamp out corruption.

But in spite of this, one entrepreneurial group of friends think little has changed.

Frustrated entrepreneurs

Last year when they wanted to start an export company, they were constantly frustrated by the bureaucracy involved in setting up their enterprise.

The licence they required before they could begin trading took a year to come through. And it did not come cheap.

"We had to return to the government offices time and time again," says Mr Ahsham, one of the budding entrepreneurs. "And each time we had to pay a bribe to a different person."

Bangladesh is not a poor country but a poorly-managed country
Syed Ershad Ahmed

American Chamber of Commerce

There is no fixed amount when money changes hands.

"It depends on the circumstances and who you are dealing with," Mr Ahsham explains, insisting that Sheikh Hasina's government is returning to the "old system".

"She says good words, but does not put them into practice," he says.

He believes Sheikh Hasina has the desire to change things, but that "others are corrupting her".

Government complicity

"We are part of a financial environment which is less than perfect," says Syed Ershad Ahmed, president of the American Chamber of Commerce in Dhaka.

He bemoans the fact that companies in Bangladesh can grow without being efficient - a contradiction he believes is due to flaws in the system.

Man holding Nigerian banknotes
2008: Ranked 147 out of 180
2007: Ranked 167 out of 179
2006: Ranked 156 out of 163
2005: Ranked 158 out of 158
2004: Ranked 145 out of 145
Source: Transparency International

"If you can achieve success and profit, what incentive is there for a businessman to follow more disciplined procedures?" he asks.

"Corruption is a big problem across the world and in Bangladesh too," he asserts. "But we haven't the leadership or the system which will bring it down."

Mr Ahmed would like to see political influence removed from the process of awarding government contracts.

"Local companies have an opportunity to pay money under the table, but foreign companies try to maintain transparency as much as possible and that actually puts them at a disadvantage," he says.

Many construction projects such as new roads and bridges are funded by money from organisations such as the World Bank and the Asia Development Bank, but that money is not paid directory to the contractors.

Instead, the cash is channelled through the government and so it is left to civil servants to decide which local companies get the work.

He asserts that there is inefficiency and wastage when government agencies are involved.

"Bangladesh is not a poor country but a poorly-managed country," he says.

Financial reporting

Soon after taking power in October 2006, the military-imposed interim government in Dhaka began an anti-corruption drive that led to hundreds of arrests, with some politicians and business people being given long prison sentences for offering or taking bribes.

Things have improved since then and Transparency International, the body which monitors corruption throughout the world, is confident that when the next league tables are published, Bangladesh will show even further improvements.

In an effort to introduce more transparent accounting, the World Bank funded a course organised by the International Chamber of Chartered Accountants in London.

Shawkat Waresi from the Ministry of Commerce attended the course and admits that accounting procedures in Bangladesh are not up to international standards.

"As a result, foreign investors are hesitant about putting money into the country," he says.

One of the government's main aims is to encourage international and local investment in the private sector, which it hopes will open up more employment opportunities.

However, the young entrepreneurs feel particularly aggrieved because, without the bureaucracy they have had to face to start their export company, they could have been offering employment to a dozen people months ago.

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