The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

High levels of "petty" corruption are undermining trust in public services, the IDB said yesterday, drawing on findings that 20 percent of Bahamians have been solicited for bribes.

The Inter-American Development Bank (IDB), in its just-published 2018-2022 country strategy for The Bahamas, based its assertion on a 2014 study by US-based Vanderbilt University, which ranked this nation 12th out of 34 countries in Latin America and the Caribbean (LAC) for "corruption victimisation".

"A relatively high incidence of 'petty' corruption in the provision of public services jeopardises public confidence in the rule of law," the IDB report said of The Bahamas.

"According to the 2014 Vanderbilt University Latin America Public Opinion Survey (LAPOP), The Bahamas is 12th of 34 countries in the LAC region for corruption victimisation, with 19.9 percent of interviewees reporting having been asked to pay a bribe over the previous year."

The assertion is likely to provoke controversy, but the IDB/Vanderbilt University findings back up the results from Transparency International's recent Global Corruption Barometer survey of The Bahamas.

It found that despite "one in ten Bahamians" disclosing they had paid a bribe within the past year to obtain public services, just six per cent of such incidents were reported to law enforcement. And zero action was seemingly taken over this alleged corruption.

The Corruption Barometer findings, based on a survey of 1,000 Bahamians conducted in October 2017 by the Public Domain research firm, asked Bahamian adults whether they had paid a bribe within the past year to access six different types of public service - the police, ID documents, utility providers, the courts, healthcare and the courts.

The results showed that one in eight Bahamians, some 13 per cent, who had contact with the police in the year prior to October 2017 "had paid a bribe in order to get the services they need".

While 'rent seeking' was most prevalent in the public's dealings with the police, the Transparency International report found that illicit payments to agencies such as Immigration (work permits, residency permits), the Road Traffic Department (driver's licences) and Passport Office, plus publicly-owned utilities, were not far behind.

"Utility providers and the process of obtaining identity documents, such as passports and driver's licences, were also affected by bribery, with one in nine people who came into contact with these public service providers in the previous 12 months paying a bribe in order to get the services they needed (11 per cent for each)," the Corruption Barometer survey found.

"Bribery in the courts was also reported, with one in 10 people who came into contact with the courts having paid a bribe in the previous 12 months, demonstrating that there is still an acute corruption risk in this key law and order institution (10 per cent)."

Critics of the Corruption Barometer findings pointed to the Bahamas' relatively high 28th ranking in the earlier 2017 Corruption Perceptions Index produced by the same Transparency International, suggesting the latter was effectively contradicting itself and ignoring evidence that this nation was relatively 'clean'.

However, the IDB's revelation of the Vanderbilt University findings backs both the Corruption Barometer and Dr Hubert Minnis's concerns that such practices could be costing the Bahamian economy some $200 million per year - and possibly as much as $500 million, based on global average estimates.

The IDB's 'corruption' comments came as it identified 'enhancing public sector effectiveness' as one of the three key priorities, along with growth-enhancing infrastructure and an 'enabling environment' to boost private sector competitiveness, as its three key priorities in working with the Bahamas between 2018-2022.

Based on an average of the six key indicators used by the Worldwide Governance index to measure a country's performance, the IDB report said the Bahamas "has decreased its overall score by more than 25 per cent" in the decade to 2016.

"Governance indicators for the Bahamas indicate a decline in public sector performance during the past decade," the IDB country strategy found. "According to the World Governance Indicators, government effectiveness in the Bahamas - which among other things captures perceptions of the quality of public services, the quality of the civil service, and the degree of that service's independence from political pressures - fell from the 84th to the 74th percentile between 2006 and 2016, with significant rates of decline in the regulatory quality, rule of law, and control of corruption.

"Over the period 2006 to 2016, regulatory quality fell from the 81st to 63rd percentile; the rule of law declined from the 86th to 60th percentile; and control of corruption declined from the 90th to the 83rd percentile."

The IDB report blamed this decline on multiple deficiencies, including a still-inadequate fiscal framework and public financial management systems, coupled with the Government's continued reliance on paper-based mechanisms that feature a lack of information and communications technology (ICT) and absence of cross-departmental connections.

It warned that the planned centralisation of the Government's revenue and tax collection functions into the Department of Inland Revenue was no guarantee of success, adding: "Efforts are currently under way to centralise the functions of over 30 disparate revenue authorities and departments.

"However, many of the difficulties that existed prior to the establishment of a centralised revenue authority - such as long taxpayer waits, lack of tools for electronic filing and payment, difficulties in intra-revenue communication and human resources management, and poor enforcement or promotion of compliance - may still exist once centralisation is completed."

And, despite efforts to restrain spending, the IDB strategy warned that the taxpayer was receiving minimal value from government expenditure. "Public sector operation expenditures average between 20 per cent (15-year average) and 23 per cent of GDP (five-year average), but only account for 6 percent of gross value added in the economy," the report said.

"State-owned enterprises (SOEs) represent a significant portion of these expenditures, due to large workforces and inefficiencies, as they require transfers equivalent to 3 per cent of GDP to maintain their operational capacity."

Pointing out that the Bahamas "has lost some ground in recent years" on both the e-Government Development Index and the e-Participation Index, the IDB strategy added that the Government's systems need a complete overhaul.

"Information management across the public service shows limited levels of automation, with a large number of procedures and internal communications based on paper; outdated ICT infrastructure; and limited levels of interoperability among agencies and connectivity with the Family Islands," the report said.

"The absence of an ICT institutional framework to manage digital government, an ICT Roadmap for public sector transformation, and sufficient investment in ICT-related projects reduces the capacity for implementation of ICT policies and management of ICT projects; inhibits timely data-sharing, planning, co-ordination and innovation across government activities; and distances the government from dynamic, responsive, and productive engagement with citizens and the business community, particularly in the Family Islands.

"Many government branches, particularly in smaller Family Islands, lack the equipment and connectivity for digital government. These government branches continue to depend on centralised government offices in Nassau to provide critical and necessary government services. The unique geography and population displacement proves a clear case for the need to use ICT in offering government services to other islands in the Bahamas."