And according to the report the business sector continues to play “a very exposed role” as the supplier of corrupt payments to civil servants, members of government and political parties. These kickbacks, the report says, may be actively solicited, extorted or extorted proactively.
“The scale and scope of bribery in business is staggering. Nearly two in five polled business executives have been asked to pay a bribe when dealing with public institutions. Half estimated the corruption raised project costs by at least 10 per cent. One in five claimed to have lost business because of bribes paid by a competitor. More than a third felt that corruption is getting worse,” the Transparency International Report says.
Guyana is among a group of eight countries – that include Eritrea, Ethiopia, Honduras, Mozambique and Uganda – ranked at 126 among 180 countries listed in the Transparency International Report. Publication of the Report coincides with ongoing public debate arising out of revelations of corrupt practices that involve collusion between private sector entities and state agencies which involve the payment of bribes and kickbacks in transactions which are mostly designed to defraud the public treasury. These practices have seen fingers pointed mostly at the Guyana Revenue Authority and more particularly at the Customs and Trade Administration (CTA). The most recent scandal involving the alleged payment of hundreds of millions of dollars in bribes by a local company, Fidelity Investments, has been the subject of a public enquiry that has led to charges against some customs officials. The case against Fidelity was later discontinued without an explanation to the public.
Senior executives of local umbrella business organizations have conceded that the practice of importers paying bribes to Customs officials to reduce what is widely felt to be the hassle associated with the clearance of cargo has become commonplace and have publicly called for an end to the practice.
In the past the state tender process has also come under fire from some contractors who have claimed that the payment of bribes by competitors seeking state contracts have denied them business.
The Transparency International Report alludes to what is says are the debilitating effects of corruption on individual firms where the requirement of paying bribes for services offered by state institutions raises costs, makes access to capital more expensive and depresses company valuations. “In the broader market environment corruption undermines fair competition, leads to lost business opportunities and nurtures corrupt bureaucracies. Corruption in and by business hollows out the very basis on which its own existence and success depends, the functioning and sound governance of markets. Corrupt practices invalidate the social licence to operate, breaking the legitimacy and trust that business depends upon in society,” the Report adds.
While some local businessmen in the trading sector contend that the use of bribes and kickbacks ‘expedite’ their cargo clearance transactions thereby ensuring the continued viability of their businesses, the Transparency International Report challenges this view. “Strong internal governance and corporate integrity are found to pay integrity dividends, dispelling the claim that companies can ill-afford to abstain from corrupt practices without spoiling their business prospects”, the Report says. “Companies with anti-corruption programmes and ethical guidelines are found to suffer up to 60 per cent fewer incidents of corruption and to be less likely to lose business opportunities than companies without such programmes. Companies with superior performance as corporate citizens are shown not only to match but often to out-perform their peers. Better corporate governance in companies located in emerging economies is associated with better performance and market valuation,” the Report added.
Meanwhile, the Transparency International Report says that more emphasis needs to be placed on enforcing measures and that such measures must include greater resource allocation and more effective mechanisms for the measurement and performance of enforcement. “Governments and regulators need to make enforcement efficiency and effectiveness more transparent and accountable. They need to pay more attention to ensuring the adequate resources for regulators and enforcement activities are made available. In addition, those responsible for public oversight should report more fully on the money and staffing devoted to different types of enforcement action and the ‘outputs’ they produce in terms of investigation, cases brought and fines and other sanctions imposed.”
