The High Cost of Corruption
The high cost of Corruption
“More than any other Caribbean society, with the possible exception of Cuba, Barbados has arrived at a place where its uniqueness represents a model of governance, political economy, way of life, and social order which invites emulation elsewhere in the Caribbean and further afield, albeit with appropriate amendments. Barbados’ high quality of governance and level of human development have been a marvel to objective observers, including reputable international agencies.”
– Dr. Ralph E. Gonsalves, Prime Minister of St Vincent and the Grenadines.
Corruption hurting our prosperity.
OVER THE YEARS, Barbados has rightly earned international recognition and praise for its many accomplishments notwithstanding its relatively small size. However, Barbadians must jealously protect that reputation by putting regulations and legislation in place to forestall eventualities that could ruin this golden reputation.
Once such area has to do with guidelines to protect, where possible, practices like political corruption that have threatened to dismantle this progress or ruin developing countries.
In light of the impact that the island’s continued economic difficulties can have on legitimate access to personal wealth growth and the attainment of material goods by people of influence in particular, corrupt deals can be tempting.
But there is a price that the entire country pays when corrupt officials get their way, undermining social and economic prosperity. This is borne out by a report by the Organisation for Economic Cooperation and Development (OECD) which puts the cost of corruption to developing countries at approximately 5% of Gross Domestic Product. Hypothetically, assuming that Barbados is at the OECD average, that cost would be 1/2 a billion BBD per annum.
With historically high taxation and the challenges Government faces in adequately supporting social assistance and developmental programmes, the possible loss of 1/2 Billion BBD through corruption is a price tag Barbadians can least afford. Judge the loss by examining the theoretical statistics in this chart:
Contextualizing what 1/2 a Billion BBD could get Barbadians per annum.
| Initiative | Cost |
| Reinstate the non-payment of tuition fees for UWI students | 42 Million BBD |
| Reduce VAT from 17.5% – 15% | 124 Million BBD |
| Reinstate Tax Free Allowances | 25 Million BBD |
| Reinstate cuts made to QEH | 35 Million BBD |
| 10% increase in public sector wages | 80 Million BBD |
| Reduce government’s NIS Debt by 75 % | 200 Million BBD |
This number, totaling $496 million, speaks for itself, telling a strong story about the price of leakages though corruption.
Corruption more common than Barbadians think
There is a fallacy that Barbados has always been free from corruption because it is not clothed in the garb of excesses or blatant displays of flamboyancy or ostentatious living by beneficiaries.
By ignoring the corruption reality in our midst, Barbadians could easily fail to reap these potential developmental benefits that stolen funds should have been directed towards. Since average Barbadians are not a part of high level business and political dealings, many of us are unaware of the extent of political corruption and how ominously it presents itself.
An important undertaking therefore, is to ensure citizens, particularly those who pay taxes, know what corrupt political dealings may look like.
How corrupt officials can exploit taxpayers
All Government ministries and departments require goods and services from private companies, on island and overseas, through procurement, better known as tendering. It is during this offering procedure where the integrity, fairness and transparency of the process would likely be compromised by corruption to favour a particular tenderer.
It is at various stages of this process where, for instance, a corrupt businessperson and a zealous minister could conspire to their mutual advantage.
To gain access to the millions of dollars offered in contracts, this businessperson could bribe or attempt to bribe a minister with the aim of soliciting political interference by exploiting that minister’s discretionary powers since contracts can sometimes be authorised directly by him or her.
This interference would then allow a corrupt contractor to by-pass department boards, regulatory planning offices, environmental impact assessments and even a tenders committee, while the minister could benefit to the tune of hundreds of thousands or millions of dollars, depending on the size and importance of the contract.
Establishing anti-corruption agencies
Because some countries refuse to bury their heads in the sand, they have set up anti-corruption agencies – countries like Ghana, Botswana and Indonesia. But such can only be established if first of all there is acknowledgement of corruption.
Their mandate is to identify shortcomings in the tendering and other processes where large government payments are involved, and to scrutinise all documents that support the tendering for goods or services.
They also build civil service strength from within by establishing ethical codes for all staff while securing the most comprehensive internal procedures in each government ministry.
All procurement processes where contracts above a certain amount – say $200,000 BBD – ought to be put out to tender and bids considered by a tenders committee.
These are simple safeguards we should examine for Barbados.
More taxpayer’s money could be extorted
The Barbadian system could be abused by corrupt businesspersons buying additional political influence to have higher unforeseen or varying costs approved above the amount estimated without adequate justification; rrupt business person art of potentially pocketing millions.
The evidence of a desire by public officials to obtain personal benefit from deals is often revealed when a negotiating official hints to prospective businesspersons that their prices are lower than anticipated. Some bite at the bait, honest ones don’t.
Buying off political party officials
A corrupt entity could also create unethical networks through “buying off” political parties, through lawful but undeclared political campaign financing. In these instances, large and undisclosed sums of money would be poured into a political party with the expectation that the investment will mature through valuable tax-payer funded contracts.
This type of collusion often becomes apparent when Government contracts spanning multiple projects, favour one or two firms when capable alternatives exist and there is criticism for a failure to spread the wealth.
Fighting corruption for strong national development
If corrupt private and public officials engage in unethical profiteering of government, it poses a serious threat to the well being of Barbadians. Unnecessary and expensive taxpayer funded projects, with inadequate justification for cost increases and failure to proceed through the correct regulatory guidelines, can cost Barbadians billions over time, jeopardising our national development.
It is incumbent upon Barbadians therefore, to ask themselves what future do they wish for Barbados?
A Barbados where Dr. Gonsalves’ statement remains true, or a Barbados where such a statement is reflective of a time long gone by.