IF GOVERNMENT and public corruption were seriously tackled in Portugal, the country would be three times richer than it is today. Portugal presently ranks as the poorest of the original pre-enlargement European Union Member States, lagging behind Greece. Yet, according to data divulged by the World Bank, it could be as rich as Finland, which enjoys one of the highest standards of living anywhere in Europe, reports Chris Graeme.
But low productivity and lack of innovation are not the only problems holding the country back. The fact that people at all levels actively engage in fleeing from their tax obligations means that the State is starved of the necessary funds needed to implement and encourage economic growth and change.
Corruption is seeing poor families get poorer, paying more taxes than they should to make up for the large swathe of small and medium businesses and professionals such as accountants, lawyers and doctors, who carry out so much business under the table.
Another problem is the accepted bribing of officials – both large and small – at all levels of society to get things done, such as have access to basic public services or obtain planning permissions.
The title of the World Bank’s study by Daniel Kaufmann, ‘Ten myths about government and corruption’, claims Portugal could, by improving its governance, triple its income and reach a good level of development.
Reducing corruption would also reduce infant mortality, raise education levels and literacy, and inspire more faith in the democratic process.
Portugal is clearly losing out to the former Communist bloc Baltic States of similar populations, such as Lithuania, Estonia and Latvia, which have already achieved, or nearly achieved, the same levels of productivity and economic growth.
But Kaufman stresses that because of its furtive nature, corruption is difficult to measure in his report that examines 200 countries worldwide.
Corruption can also be aggravated in countries that previously had endured some kind of totalitarian system and then became democratic, without having a sufficiently developed modern legal and financial system in place to foster and facilitate good business practices. Russia is a good example of this.
The study affirms that, globally, corruption stains business transactions to the tune of billions of dollars a year. The report was published in the International Monetary Fund’s quarterly magazine.
