10-30% of cost in capital investment projects consumed by corruption


KUALA LUMPUR: Rampant global corruption in the public procurement sector with multiple entry point estimates that 10 per cent to 30 per cent of the cost of capital investment projects had been consumed by corruption, according to the World Bank Group.

Its lead public sector specialist Rajni Bajpai said more than one-half of the cases relating to foreign bribery involves public procurement, while the surveys of business owners consistently identify corruption in public procurement as among the major constraints to doing business worldwide.

“Often placed at the epicentre of discussions of corruption, public procurement has wide-ranging ramifications for the economy and delivery of public services,” she said at the virtual East Asia and Pacific (EAP) regional launch of the global report: ‘Enhancing Government Effectiveness and Transparency – The Fight Against Corruption’.

As such, she said, it accounts for between 10 per cent and 25 per cent of public spending globally.

“Having said that, the corruption in procurement creates the wrong incentives for firms and distorts competition and economic growth,” she explained.

The global report highlights the importance of complimenting the traditional methods of dealing with corruption with advanced methods such as govtech, new procurement reforms, asset and income disclosure, and beneficiary ownership

On customs corruption, she said that with the business and investment decisions by multinational companies increasingly subject to international competition, the presence of widespread corruption in customs acts as a major disincentive to foreign investors.

Moreover, Rajni said corruption in customs takes on new significance in the current environment of heightened concern about national security and international terrorism.

In tackling the issues, World Bank Group EAP vice-president Victoria Kwakwa said the bank would be developing data analytics to enhance the analysis and measurement of corruption to develop a stronger evidence base for policy reform.

She said the data would provide insights that reflect the nature of corruption problems and impacts across different levels of government, sectors and contexts. – Bernama

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