Corruption “La Punct”. How Corruption Generates Poverty?

Publishing date: Monday, 09 October 2017
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What does the phenomenon of corruption really represent? Corruption is the abuse of professional duties for personal or group interest. It may occur both in the private sector (e.g. offering a loan on preferential terms contrary to the prudential policy of the financial institution), but more commonly in the public sector (e.g. offering a bribe for obtaining a license, ‘arranging’ public tenders or promulgating laws for obscure interests).

The most dangerous form of corruption is the Big Corruption. It consists of major embezzlement/thefts from the State Budget, money laundering or capturing the state institutions by obscure interests. For example, the bank frauds discovered in 2014, which resulted in decapitalisation of the banking sector by about 12% of GDP, depreciation of the national currency, and increase in the state debt by about MDL 14 billion, were caused by Big Corruption in the banking and public sectors.

The Situation in Moldova

Although corruption is one of the most debated topics in the Republic of Moldova, the society still fails to realize all the risks it involves. Corruption has always been the leitmotif of electoral platforms of the political parties, governance programs and country strategies of Moldovan development partners, with a broad consensus that it is a fundamental challenge for country development. However, strange as it may seem, opinion polls reveal a different situation. The latest edition of the Barometer of Public Opinion (April 2017) has proved that poverty is the top people's concern (40.3% of respondents said they were primarily worried namely about poverty), followed by prices (17.3%), unemployment (11.1%), children’s future (9.9%), while corruption was only the fifth (8.6%). There are at least two explanations for this paradox. The first one is that people are primarily concerned with the issues that affect their material situation in a direct and tangible way, and fail to realize that it is the systemic corruption that causes them. Secondly, the society traditionally tolerates corruption to some extent (for example, a representative survey conducted at the request of Expert-Grup in 2014 reveals that Moldova has one of the lowest tax morale in the 2 region). In both cases we can observe that the population fails to understand the danger and severity of corruption.

Analytical Commentary (En)