C for Covid – and corruption

Global evidence suggests that corruption and bribery risks multiply during a crisis. Covid-19 is no exception. It has a powerful accomplice: corruption.

There is emerging evidence across the globe that public servants and politicians are engaging in minor, moderate and grand corruption as emergency procurement processes are being put in place (or regular processes put aside) to expedite health response.

Only in the month of May, Brazilian Federal Police raided the residences of Rio de Janeiro's governor as part of a Covid-19 response related corruption probe. Colombia arrested two mayors and seeks arrest of eight more over Covid-19 corruption reports on the use of emergency aid. Lawyers from global Latin American firms identified corruption allegations related to public procurement and pandemic response in at least a dozen countries.

South Africa’s Special Investigations Unit (SIU) says it has received allegations of corruption and maladministration regarding relief funds related to Covid-19, as well as other procurement irregularities during the lockdown.

In this global backdrop, Pakistan currently stands a high risk of corruption. We already have a weak anti-corruption architecture. On the Transparency International Corruption Perception Index, we currently rank 120 amongst 180 countries and score 32/100 (0 being the lowest score). Over decades, our government responses have predominantly been politically motivated, post-event (not preventative) and driven by a heavy-handed law enforcement punch.

At an institutional level, we have not developed an integrity driven system that reduces the opportunities afforded to the corrupt operators. As a society, we have developed a certain level of acceptance to corruption and consider it ‘part of life’. As a consequence, facilitated by the dividends from corruption, we are heavily plagued with money laundering by the elite and are already on FATF’s grey list. Therefore, Pakistan should consider putting in place strong mitigation measures now that are proportionate, pragmatic and plausible.

Doing this is not easy but also not impossible. Just as we can’t offer a free pass to enable corrupt elements to mis-use ovid-19 funds, our policymakers and public servants also need to respond quickly to meet the populace needs and can’t slow down Covid-19. The anti-corruption policy responses for Covid-19 also need to keep in mind that their focus is not to address long-standing structural issues with Pakistan’s anti-corruption regime but to provide immediate mitigation for the crisis at hand. To this end, I would like to propose four policy responses to be debated and considered.

First, understand and minimise the risks of corruption through emergency public procurements. Just like the rest of the world, significant multi-million-dollar health procurements are currently taking place in Pakistan. Time is of the essence and therefore several otherwise mandatory requirements for procurement are being bypassed (and rightly so).

This is the bedrock of corruption. Given weak inherent compliance capacities of our responding institutions, padding of procurement contracts and leakages in distribution are expected. We need to reduce the risks of this happening.

There are some quick ways to mitigate potential risks here. We could consider PPRA, NDMA and NAB collaborating to: a) publicly announce the revised/expedited emergency procurement guidelines (PPRA); b) release data of the firms that are being awarded Covid-19 contracts on public websites with full disclosure (consolidated release on the NDMA website while relevant departments should release on their respective sites); and c) strengthen watchdog functions in particular to identify potential corruption caused by giving contracts to associates of politically exposed persons (PEPs) (NAB but also civil society).

Second, reduce the risks of money laundering during the crisis window. Globally, the risks of money laundering are going up during Covid-19. Pakistan is also an evidenced victim of this. To manage this, Pakistan’s Financial Management Unit (FMU) should conduct a quick risk analysis and put in place risk assessment strategies jointly with the State Bank of Pakistan.

They should monitor the outflow of funds and review the STRs and CTRs from a COVID-19 lens. The risks and findings of the FMU’s work in this regard should also be sensitively made public. If not managed well, we stand a risk of moving Pakistan’s wealth to safe havens abroad during the crisis window.

Third, setting the right tone and behaviour of senior management in our leading public institutions. Managers and employees take cues from their leadership. In the middle of the crisis, it is difficult to build a culture of compliance from scratch, but it is still possible for the top leadership to send the right messages to their teams engaged in massive procurements. As a bare minimum, we need to be careful about interaction with Politically Exposed Persons (PEPs) and their roles in procurements. These should be identified and monitored by our public institutions and encouraged by our anti-corruption architecture in the country through awareness raising.

And, fourth, engaging public and civil society organisations in reporting corruption cases. We should consider engaging the general public in finding risk areas for corruption across the country and report them. This could be led by civil society organisations (such as Transparency International in Pakistan) but also by the government's own watchdogs (such as NAB). Analysing the information coming from this data can tremendously inform our risk assessments at a time when government machinery is otherwise occupied with other competing priorities. This could lead to a corruption risk mapping and can build trust between government and the citizens.

To sum it up, thinking about these measures is not a luxury. It is fair to say that corruption is already affecting crisis response. Some countries, including developing countries like ours, are putting in place emergency corruption mitigation measures to reduce the incentives of misusing funds in the on-going crisis. For instance, Thailand’s office of National Accountability is leading by example and currently proposing preventive measures against corruption Covid-19. Sudan has also put in place strict punishments to deter corruption within Covid-19 responses.

For Pakistan, the consequences of not considering these factors include a potential but plausible huge escalation of costs (whether it is testing, treatment, quarantine facilities). We will (and probably already are) end up not just paying for the cost of the response but also for the cost of corruption – and that also at a lower quality.

The writer is a public policy analyst with interest in anti-corruption efforts, and the politics of economic development and water governance.

Twitter: @sanazia