Pandemics and Corruption Risks

News | Good Governance | Pressing Issues | Article 7 April 2020

 

Due to the new coronavirus (COVID-19) outbreak, state of emergency was declared in Georgia on March 21, 2020.[1]  According to the Article 1 of the presidential decree, the purpose of the state of emergency is to react accordingly on the pandemic acknowledged by the World Health Organization, to secure the public health in democratic society, reduce the risks related to the health and lives of population and manage the situation.

 

The ongoing outbreak of COVID-19 is affecting not only Georgia but also number of countries worldwide. Following the crisis, many countries took special measures and declared state of emergency (Italy, Spain, Portugal, Balkan countries, Baltic countries, etc.).[2]

 

Unfortunately, international experience shows that corruption often thrives during times of crisis, as some see it as an opportunity to take advantage of the situation and use power for private gain.[3] Corruption cases increase particularly when institutions and oversight are weak. Besides, large amount of finances are allocate during the crisis from international donors as well as local business organizations, which increases risks of corruption and misuse of received funds. This is proved from previous global health emergencies, like the Ebola virus and swine flu.[4] According to the assessment of the Red Cross, during the Ebola crisis 6$ million was lost on the fake customs bills, overbilled supplies, and payments to non-existent workers.[5] Therefore, it is important that the Government pay more attention to corruption risks and detection of possible corruption cases.

 

In times of pandemics, emergency procurement is often necessary, which increases corruption risks in this direction, artificial increase of prices and use of grey and black markets take place as well as distribution of falsified medical production.[6] 

 

Throughout March 2020, there has already been a wave of corruption related incidents, decreasing transparency and accountability. As it is known, on the European continent Italy was affected the most from the COVID-19 outbreak. Within the procurement announcement, an agricultural company won a contract to supply the government with facemasks; however, public procurement blocked the bid and is now investigating the case for possible corruption deal. Serbian President has publicly indicated that due to a lack of ventilators available on the European market, he had to acquire them on the semi-grey market.[7]

 

Taking into account the international experience, IDFI considers that suspension by the 2020, 23 March presidential decree of public information request deadlines set forth by the General Administrative Code as well as expected increase in public procurement without announcing tenders (procurements made using money from the increased Government reserve funds, emergency procurement, etc.) significantly grows the risks of corruption and misuse of funds.

 

Experience related to Ebola virus proves that existing anticorruption mechanisms are not always effective in times of crisis even when they work successfully during regular times.

 

Important lessons are to be learned from the HIV/AIDS epidemic as well. In the response to HIV/AIDs Governments worked closely with local community organizations and encouraged local programs and practices. As a result, the impact of the HIV/AIDS epidemic on societies was not as devastating as anticipated.[8]Civil society organizations can play an important role in monitoring, accountability, and information sharing in the public health system.

 

Reportedly, due to the situation in the country related to the COVID-19 pandemic the Georgian government is going to mobilize two billion GEL in the state budget, which will be used to support the country's economy. In addition, GEL351 million has been allocated from the budget directly for the challenges related to the COVID-19 pandemic in the healthcare sector. It is important that public institutions use the funds allocated to them within the framework of the emergency budget in a highly rational manner and ensure the transparency of this process.

 

Considering all the above, it is important that the authorities ensure that risk factors in the health sector are identified and that appropriate measures are taken to ensure that the funds allocated in this direction are spent rationally and diligently.

 

It is important for the government to ensure maximum transparency in the procurement of vital vaccines, tests and equipment through an open and transparent procedure.

 

The government should ensure the active involvement of civil society in budget monitoring and procurement, which will ensure efficient spending of finances and reduce corruption risks.

 

Under these conditions, it is important to ensure a high degree of proactive disclosure of information. Therefore, it is necessary to bring the standard of information introduced by the Government of Georgia in 2013 in line with the existing challenges.

 

 

This material has been financed by the Swedish International Development Cooperation Agency, Sida. Responsibility for the content rests entirely with the creator. Sida does not necessarily share the expressed views and interpretations.

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[1] Decree N1 of the President of Georgia of 21 March, 2020 on the measures to be taken regarding declaration of state of emergency on the whole territory of Georgia.  

[2] The information is available on this link.

[3] Steingrüber, M. Kirya, D. Jackson and S. Mullard, U4 Guide - Corruption in the time of COVID-19: A double threat for low-income countries, available on this link.

[4] Transparency International, Corruption and Corona Virus, available on this link.

[5] J. Delzo, Red Cross says $6 million in donations, payroll stolen during Ebola crisis, available on this link.

[6] N. Cuckić, COVID-19 pandemic as a threat to the rule of law in the Western Balkans, available on this link.

[7] J. Delzo, Red Cross says $6 million in donations, payroll stolen during Ebola crisis, available on this link.

[8] Transparency International, Corruption and Corona Virus, available on this link.

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