Corruption hurting MSMEs

Business

CORRUPTION decreases the growth of micro small-to-medium enterprises (MSMEs) in the country, according to a recent analysis by PNG National Research Institute.
The corruption obstacles include:

  • infrastructure;
  • electricity;
  • water and sewerage;
  • telecommunications;
  • transport;
  • regulatory policy obstacles related to tax rates;
  • government regulations;
  • crime; and
  • security for firms.

Associate professor Eugene Ezebilo, during a stakeholders’ workshop in Port Moresby yesterday, said that in developed countries, corruption obstacles decreased growth in MSMEs.
“The results have got to do with imperfections or failures in the public sector,” he said.
“The agencies are not working very well as they should.
“That is one of the reasons the SME managers have to adapt to these situations.
“Adapting to situations is to bribe their way through in order to make their business thrive.”
Ezebilo said corruption was a cost to the state. “It is a leakage in terms of revenue, that some people are diverting,” he said
Ezebilo said an SME manager had K1 million for registration but could bribe their way through with an amount that was less than what was required.
“In order for the Government to correct the abnormalities, the first thing to do is to see how to increase penalties and the risks associated of being caught,” he said.
“For instance, increase the term of imprisonment and the risk of being caught, tighten the loopholes that people have been using to involve in corruption.”Ezebilo said another thing was to create more awareness in the mainstream media regarding the causes and impacts of corruption.
He said money that was allocated to establish Government infrastructure like water, electricity and roads, once diverted to other sources, crippled its ability to invest in infrastructure.
Ezebilo said this analysis was based on a survey conducted in 2013 and based on perceptions.
“We are not saying that the Government or the private sectors is corrupt,” Ezebilo said.

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