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Belarus: Corruption and Procurement Issues Plague Economy

A Culture of Corruption

MINSK, BELARUS - A recent report has highlighted the significant corruption and procurement issues facing Belarus’s economy. The country’s public procurement sector is considered to be among the most corrupt in the world, with over one in eight companies expecting to offer gifts to secure government contracts.

Inconsistent Regulatory Environment

The World Bank’s Doing Business 2017 report found that the costs and time required to import goods into Belarus are significantly lower than regional averages. However, this has not translated into a corruption-free environment, with public officials engaging in corrupt activities with impunity.

  • The country’s clientelistic distribution of goods and services is hindering its economic potential.
  • The main risks arise from the complicated and inconsistent system of legislative regulations governing procurement, which has led to the exploitation of “secret trade” practices.

Flaws in Government Response

The government has been criticized for releasing high-level officials and businessmen who had previously been convicted of corruption-related crimes. State-owned enterprises (SOEs) frequently receive benefits, exemptions, and subsidies that are not available to private companies.

  • The country’s anti-corruption legislation is not properly enforced, with public officials engaged in corruption without fear of punishment.
  • The media environment in Belarus is considered “not free,” with freedoms of speech and press guaranteed by the Constitution but frequently restricted by the government.

Positive Developments

On a positive note, Belarus has developed e-procurement services, which require information to be public and promote the effective and optimal expenditure of budgetary funds.

  • Allegations of shadow procurement schemes involving arms trade and oil refining industries through private companies exist.
  • Hospitals and drug manufacturers in Belarus have been reported to engage in kickback schemes when procuring medical chemicals.

International Conventions

Belarus is a party to several international anti-corruption conventions, including the United Nations Convention against Corruption (UNCAC), but is not a party to the OECD Anti-Bribery Convention.

Conclusion

The situation in Belarus highlights the need for strong anti-corruption measures and transparency in government contracting. The country’s economic potential can only be fully realized if corruption is addressed and the business environment is made more attractive to foreign investors.

Sources:

  • World Bank: Doing Business 2017
  • Freedom House: Nations in Transit 2017
  • Bertelsmann Foundation: Bertelsmann Transformation Index 2016
  • US Department of State: Human Rights Practice Report 2016
  • Belarus Digest: “Belarus Struggles To Control Its Borders”, 4 November 2016
  • FCPA Blog: “Maryna Kavaleuskaya: Doing Business Where Corruption is A ‘Method of Governance’”, 1 November 2016

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