|Corruption is a controversial political issue in the country. / Photo by Elle Aon via Shutterstock|
Corruption incidence has increased in Colombia as there has been widespread overcharging of medical supplies and food meant to help the country fight coronavirus spread, the country’s comptroller told Reuters.
Corruption in Colombia
Authorities have detected that while Colombians are under nationwide quarantine until April 27 and there are more than 2,800 confirmed Covid-19 cases, various cases of alleged corruption are also on the rise. Comptroller Carlos Felipe Cordoba said that there have been allegations of overcharging in contracts for biomedical equipment, gurneys, and food.
Corruption is a controversial political issue in the country. The country’s General Comptroller’s office, which acts as the highest form of fiscal control in the country, states that graft has cost Colombia an estimated $12.9 billion a year, only more than 4% of Colombia’s gross domestic product.
Can of tuna cost $5 from $1.50
The office has detected about $20.6 million overcharges in some of the 8,100 contracts signed by governors’ and mayors’ offices. Totaling the overruns, it would comprise 10% of contracts’ overall value. Cordoba added that in the eastern Arauca province near the Venezuela border, cans of tuna that were supposed to be given to vulnerable populations were purchased by the citizens for about $5 each. The usual price is about $1.50. Even the antibacterial soap is worth $8.50 in one contract. This price, though, is nearly five times the normal. The price of gurneys also nearly doubled.
Cordoba said that since there were alarms about overcharging, some officials “backpedaled” on the contracts. Some have been taking advantage of their position and think that they can bring Covid-19 tests, medical equipment, or ventilators from China to their country.
Even Procurator general Fernando Carrillo said that some governors and mayors have used grocery distributions meant for the poor populations for political gains. Carrillo posted on Twitter that they will not be allowing the “unscrupulous” corrupt people to turn the hunger of the vulnerable sectors of the society into a banquet for their advantage. He believes it would be inhumane and unconscionable on the part of the corrupt to take advantage of the pandemic.
Both Cordoba and Carrillo have suggested to the government of President Ivan Duque to centralize the tenders and purchases to prevent price gouging and corruption in the country.
|Corruption may thrive in times of crisis when public trust is low and oversight is weak. / Photo by KAMONRAT via Shutterstock|
Corruption perception index 2019
Germany-based nongovernmental organization Transparency International, which takes action to combat global corruption and prevent criminal activities arising from corruption, ranked Colombia 96 out of 180 nations in their 2019 ratings. It ranks countries and territories based on their perceived levels of public sector corruption according to business people and experts. The corruption perception index of Colombia last year was 37. A score of zero means “highly corrupt” and 100 means the country is “very clean.” Its corruption perception index was 37 in 2018 and 37 from 2015 to 2017.
Countries with the highest corruption perception index in 2019, which reflects less corruption, are New Zealand (87), Denmark (87), Finland (86), Switzerland (85), Singapore (85), Sweden (85), Norway (84), Netherlands (82), Luxembourg (80), and Germany (80).
On the other hand, countries with an index that reflect greater corruption are Somalia (9), South Sudan (12), Syria (13), Yemen (15), Afghanistan (16), Sudan (16), Equatorial Guinea (16), and Venezuela (16).
Preventing price gouging
Price gouging happens when the seller increases the prices of commodities, goods, and services to a level that is higher than what is considered fair and reasonable. Transparency International highlights how the coronavirus has put additional strain on a fragile procurement process because of the pandemic. To prevent price gouging, it is best to have a transparent and open contracting process because it will also mitigate the risks of corruption. Corrupt actors cannot practice price gouging if they have nowhere to hide. Thus, they will also be charging the governments at reasonable prices.
It is also helpful to have transparent information about which drugs int eh country may experience shortages so that the health system will have a better way to prepare other solutions, like searching for alternative manufacturers. It reminds the public that instead of protecting corporate interests, governments should make information on drug shortage available to the public to make sure they have access to lifesaving medicines.
Bribery, fraud, and corruption on the rise due to Covid-19
Another report by accounting and advisory firm Deloitte also paints the increasing corruption in Australia. When risk leaders are asked what they consider to be the top bribery and corruption risk faced by their organization, their common answers are undisclosed conflicts of interest (56%), receiving out-of-policy gifts, entertainment, and/or hospitality (38%), and favoritism in recruitment, procurement, or contracting (30%).
Hindrance to economic growth
Max Planck Institute for Research on Collective Goods’ Senior Research Fellow Anna Kochanova has mentioned that corruption is a “strong constraint” on the development and growth of an economy.
Corruption is also a popular topic in economic research. Nguyen Ngoc Thach from Banking University HCMC in Vietnam and colleagues conducted an empirical study on the effects of corruption on the economic growth in Asian countries. The results support the hypothesis that corruption hinders the economic growth in Asian countries although the impact is different in the low quantile of 0.1 to 0.5 as corruption impacts them positively. From 0.75 and 0.90, the impact is negative. A quantile is a statistical value of data that represents a given population and between low- and high-income countries.
Corruption perception index vs. share of people who have bribed
Scientific online publication Our World in Data shows that Colombia’s 2017 CPI was 37 and there were 30% of people who reported having paid a bribe to access public services in the country. Compared to other countries in South America, Colombia had among the lowest incidence of bribe requests in the private sector too in 2013. There was only 2.2% of firms that experienced at least one bribe payment request in transactions dealing with taxes, licenses, permits, and utility access. Ecuador also has a low incidence (1.7%) of bribe requests in the private sector in the same year as well as Chile (1.3%) and Uruguay (2.2%).
Countries that have a high level of corruption cannot function efficiently or prosper at an economic level and will cause suffering for society since the country resources are inefficiently allocated. Unfortunately, corruption may thrive in times of crisis when public trust is low and oversight is weak.