Action needed against corruption in availing stimulus packages
South Asian Network on Economic Modeling (SANEM)’s in an assessment on the implementation of the pandemic-time economic recovery stimulus packages by the government, said the matter seemed very frustrating. SANEM assessed the situation after surveying 501 business organisations during April-June of this year.
The assessment report, published virtually on Saturday, said that 65 per cent of the target businesses were deprived of the government-announced stimulus while 14 per cent of businesses said they had no idea about the stimulus package. Only 21 per cent of the target organisations were benefited with the support.
The beneficiaries availing the loan have recovered from the Covid-induced financial crises easily. However, the successful companies are the minority. Among the pandemic-hit businesses, 65.7 per cent had to depend on their personal savings, 28.1 per cent borrowed money, 19 per cent cut workforce, 8.8 per cent cut staff salaries.
The SANEM survey also revealed that small and medium entrepreneurs were the most affected business people. They badly needed the stimulus. Ironically, they were the least to receive these funds.
The economic situation deteriorated in the April-June period compared to the previous quarter. As a result, businesses lost confidence. The overall business confidence declined to 41 per cent in the April-June from 58 per cent in the January-March. Around 64 per cent of the business community people opined that economic recovery in Bangladesh was weak while only 9 per cent said otherwise.
The government announced several stimulus packages worth Tk 727.5 billion in total to help Covid-hit business communities recover from their losses. Among the loan packages, Tk 300 billion was for industrial loan, Tk 200 billion for SMEs and Tk 50 billion for export-oriented workers’ salary.
The most worrisome finding is that the target businesses struggling in the pandemic had to bribe to avail the government-announced stimulus funds. According to SANEM, 29 per cent of the surveyed entrepreneurs, or their representatives, alleged that they were asked for bribes while 47 per cent remained silent. If we consider silence as the symbol of consent, we could find 76 per cent of the stimulus seekers either paid bribes or charged for bribes.
Allegations of financial irregularities and corruption against our financial institutions are not new. A section of bank officials too are responsible for the default loan problem. Fully aware of the consequences, they lend money to the defaulters. Meanwhile, honest entrepreneurs cannot avail bank loans as they refuse to bribe the bank officials.
The government has paid the lion share of the interest against the bank loans distributed among the entrepreneurs. The corrupt bank officials actually cheated the government and the entrepreneurs. The government should investigate the bribing allegations–what the SANEM survey found–and bring the corrupt people to book. In the difficult times of the Covid pandemic, bank officials’ irregularities and dishonesty with the government-announced stimulus cannot be accepted in any way.