Professional Documents
Culture Documents
Bangladesh
Towsif Ahmed
Department Of International Business
University of Dhaka
Email- towsifturan@yahoo.com
Abstract
Bribe is a common phenomenon throughout the world from developed countries to least
developed countries. "Bribery is a global phenomenon, and people engage in this type of
behavior all over the world," Serafeim says. "There are different magnitudes and different
extents of bribery, but everywhere in the world you can find it. The idea that bribery doesn't exist
in the developed world is a myth."From US, Canada, UK, Australia to Bangladesh, India, Chad,
Congo bribe exits everywhere. Bribery in international business transactions can be seen as a
function of not only the demand for such bribes in different countries, but the supply, or
willingness to provide bribes by multinational firms and their representatives. Bribe is a
hindrance to move business smoothly. This bribery has become a notorious problem both for the
businesses as well as in the country where they operate their business. It hampers the successful
performance and the growth by creating obstacle during the execution of the business processes.
ECGD(UK Export Credits Guarantee Department (ECGD) recognizes that bribery and
corruption distorts competition and investment, hinders free and fair trade, and represents an
unacceptable cost to business. Bribery is curse for Bangladesh when we are approaching from
lower middle income country to middle income country. This paper is discussed about the bribe
impact for Bangladesh in international business.
Introduction
Bribe exists in every sector, in every part in our country. People are used to pay bribe as it is
their regular transaction. The amount of bribe varies depending on the nature of work and the
designation or reputation of individual or party. According to Transparency International
Bangladesh 2015, People need to pay 100 taka to 100000 taka to perform any govt. official
work as bribe. The most affected sector for bribe is business and in international business its
impact is tremendous. In international business, bribery takes place during demands from tax
authority, official processing of business license and renews it, customs officers offering to
expedite the clearance of goods through customs, and police officers threatening bogus fines. In
case of Bangladesh, bribe demand most for issuing license and clearing customs goods.
The recent sufferer for this bribery impact is Mustafa Centre, a Singapore based largest retail
outlet. They have invested more than 150 million dollar and within 6 months of starting business
operations, they want to shut down their business operations. So, the impact of bribery in
international business is tentoria.
Bribe Meaning
Bribe can be defined as the illicit transaction of money or monetary value item in order to
perform ones duty. Sometimes persuasion to perform job can be done through bribe. The most
basic from of bribery is the practice of giving gifts of monetary value to a client or potential
customer to persuade their decision. According to Black Laws Dictionary The offering, giving,
receiving, or soliciting of any item of value to influence the actions of an official or other person
in charge of a public or legal duty is bribery. The UK government defines bribery as "the
receiving or offering/giving of any benefit (in cash or in kind) by or to any public servant or
office holder or to a director or employee of a private company in order to induce that person to
give improper assistance in breach of their duty to the government or company which has
appointed them." (Foreign and Commonwealth Office, UK Bribery and Corruption Law, May
2006). As Control Risks points Bribery is a widespread phenomenon in international business
transactions, including trade and investment, which undermines good governance and economic
development and distorts international competitive conditions.
Bribe can reduce the tariffs charges during the customs clearing. Customs officers often threat to
business people to seize product to earn extra money from them. Through negotiation, business
people offers bribe to corrupt officials in order to pay less tariff charges. Officials will not levy
the actual import duty on inbound materials which consequences is the govt. loss the price.
Another way to charge bribe is making delay to shipment the product. Delay shipment cause to
damage product quality and delay delivery to customer.
Bribe is a regular cash flow for firms and it has no productive use for firms. So it is opportunity
cost for firms. Firms cover the bribe cost from customers through charging on products. This
process distort the market includes distribution channels, product quality and competitiveness.
Webber and Getz go on to say bribery leads to distortion in multiplier effects, competitiveness,
fiscal functions, debt effects, and investment.
Bribe is a hindrance for FDI (foreign direct investment). Multinational firms focus on less
corrupted country because bribery creates disincentives to investment by increasing risk and
uncertainty for firms through assisting in closing deals, making poor relationship with other
countries firms and creating an obstacle to step ahead for competition with other countries firms.
Once India was the most corrupted country for bribery, and now their low corruption attract
many foreign investors.
Bibliography
1. Hamra, Wayne (01 October, 2000) Bribery in International Business Transactions and
the OECD Convention: Benefits and Limitations Vol. 35. PP. 3-7.
2. Cynthia Schoeman (November, 1997), Combating Bribery of Foreign Public Officials
in International Business Transactions.
3. Control Risks, International Business Attitudes to Corruption Survey 2006.
4. Olufemi Adekoya, To bribe or not to bribe: What are the effects of bribery in international
Business Transaction PP. 10-14