Graft gobbling up B200bn of state budget, survey shows

The government has been urged to reform the way procurements are handled for state projects to ensure transparency after a new survey on corruption highlighted the government’s failure to curb graft.

The survey, which focused mainly on business operators nationwide, estimated that corruption costs the country over 200 billion baht of the state’s investment budget.

Former Bank of Thailand governor Prasarn Trairatvorakul, now chairman of a committee on economic reform, made the remarks yesterday following the release of the latest corruption situation index (CSI) survey by the University of the Thai Chamber of Commerce (UTCC) in collaboration with the Anti-Corruption Organisation of Thailand (ACT).

The survey indicated corruption is severe and must be addressed urgently, Mr Prasarn said. At present, no structural changes have been made to tackle graft, he added.

He noted the government has focused on “tightening the screws” in its efforts to deal with corruption. Instead of solving the problem, this approach has created new ones and made it difficult for capable people to work, Mr Prasarn said.

The correct way should be to reduce too many unnecessary rules and regulations to ensure more transparency in state procurement, he said, adding that too much red tape can help foster corruption.

ACT secretary-general Mana Nimitmongkol echoed Mr Prasarn’s call for structural changes, particularly in procurement for state projects, and state officials should also exercise sound judgement.

Several measures are also needed to push for the changes, he added.

“The CSI survey has been undertaken since 2010 and we can see that the corruption index for Thailand improved drastically in 2014 after the rise of the National Council for Peace and Order. Since then it has deteriorated again, even though the situation is still better now than it was in 2014,” he said.

“If we allow such a decline to continue, all of our efforts could go to waste.”

Big change is needed to fix the graft situation and restore people’s confidence, he said.

He said the luxury watch scandal involving Deputy Prime Minister Prawit Wongsuwon and a 300-million-baht loan debacle involving an ex-national police chief are among the cases that have raised people’s doubts about how effective the scrutiny undertaken by state agencies is.

The UTCC’s latest survey of 2,400 respondents in December found “the value of corruption” involving various bribes and under-the-table payments paid to state officials and politicians stands at 25-30% of the state investment budget, totalling 676.4 billion baht.

This is equivalent to 169 billion to 203 billion baht, accounting for 1.69-2.03% of GDP or 9.95-11.94% of the state spending budget of 1.7 trillion baht.

The figures reflect what businessmen must pay to gain access to state projects.

The Year of the Rooster under the Chinese lunar calendar ended this week and one of the happiest people in this country could be Prime Minister Prayut Chan-o-cha who is still clinging on to the country’s top job. With the start of the Year of the Dog, he has no reason to celebrate but a major problem to tackle with the rise of corruption in the public sector.

On Thursday, a joint survey on the corruption situation by the University of the Thai Chamber of Commerce (UTCC) and the Anti-Corruption Organisation of Thailand indicated that the level of graft in the government sector was rising last year. The survey pointed out the situation will get worse this year given that more megaprojects initiated by the government will undergo the procurement process.

Gen Prayut and his band of men in uniform staged the coup d’etat in May 2014 with one of the pretexts being to stamp out corruption.

During the first three years after the coup, joint surveys by the two organisations did not portray this unpleasant scenario, partly because many megaprojects had not yet been kickstarted.

The corruption devil was resurrected in the form of under-the-table payments that businesses bidding for government contracts had to pay to politicians and state officials, according to the survey which interviewed about 2,400 people, including business people and government officials.

Businessmen from all walks of life have only been discussing the sudden rise in corrupt practices behind closed doors.

The latest survey basically sealed the deal. It revealed that graft started to resurface last year, reaching the highest level since the coup. Bribery for projects is now back to 5-15% of the project value which could cost the country in excess of 200 billion baht or anywhere between 0.41% to 1.23% of gross domestic product (GDP).

This level of corruption is back to the pre-military rule level of 2014, therefore, indicating that all the calls to fight graft have fallen on deaf ears.

To make matters worse, a fifth of those surveyed said politicians have used their power and positions to benefit themselves or their people. Since the coup, “politicians” actually means those appointed by the military regime to run the country.

About a quarter of the business people in the survey said they have had to pay up to 18% of the project value in the form of tea money to those in power to get their job done, which the UTCC said was the highest for the past three years.

This worrying trend comes at a time when the military regime has been embroiled in a scandal involving Deputy Prime Minister Prawit Wongsuwon who has been spotted wearing undeclared assets — 25 luxury watches that cost nearly 40 million baht in total.

Gen Prawit said he borrowed them from friends, an excuse later repeated by former police chief Somyot Poompunmuang who also said that he had borrowed up to 300 million baht from a friend who owns the Victoria’s Secret Massage parlour.

As the regime comes to the end of its lifecycle with a possible general election to take place this or next year, those who have been backing it may want to use as much of the remaining time to milk some money from state projects.

Such revelations of corruption are likely to further erode the trust and faith that the people have in this government.

It is therefore paramount for the prime minister to do all that he has in in power to curtail the rise in corruption and surgically remove the cancerous corruption tumor before it is too late.

The survey pointed out the situation will get worse this year.