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Corruption on decline in Lithuania, yet still remains troublesome

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Linas Jegelevičius for the BNN

To wrap up the findings of a new corruption research ordered by the Special Investigation Service (STT), an institution dealing with financial crimes in Lithuania, the situation is largely improving, yet not as fast as the service wishes.

The damage of direct and implicit corruption activities to Lithuania may amount to 11,4 per cent of Lithuania’s growth domestic product (GDP), or a whopping 4,44 billion euro, the researchers concluded.

Corruption is ubiquitous

If the numbers are just too big for you to grasp, then there’s this revelation:  over the last five years, 15 per cent of company heads have given a bribe to get things done faster, more efficiently or without a headache.

The STT has ordered the research under the name «The Corruption Map of Lithuania» to assess spread and trends in corruption in Lithuania.

«At 15 per cent, the result is way better than before, when half of all the respondents would admit to have given bribe,» says Margarita Dobrynina, chief specialist at the Third Division of the First Board at the Special Investigation Service.

The research also helped break down most of the numbers – the afore-mentioned 15 per cent mostly is located in the areas of the country’s largest cities, Vilnius and Kaunas.

«So to say it in other words, these regions are considered to be the most corrupt in the country, although in general, corruption activities are on decline in Lithuania,» she noted.

Most is willing to grease palm

To believe the research results, the number of businessmen who insisted they would never offer bribe is increasing steadily – from 43 per cent in 2014 to 56 per cent in 2017.

«To look at an even shorter term, the last 12 months, only a mere 5 per cent of respondents admitted of having given bribe. Compared to the year of 2002, the situation has improved dramatically – there were 27 per cent then,» said Dobrynina.

However, every fifth entrepreneur confessed to the pollsters that they would eagerly grease the palm if it helped them handle the problems.

Interestingly, asked to name the most spread form of corruption, respondents pointed out to protectionism of political party members. Especially on the municipal level.

Until now, many heads of municipal companies in the country are usually appointed adhering to the principle of political affiliation.

«If the mayor is, say, conservative, most of the director of the municipal companies will belong to the same party or will be closely related to it. The same goes to all the other parties and their representatives,» Vytautas Černiauskas,  a former municipal Council member, said.

Pharmaceutical companies lead the pack

Asked to say which fields of industry are allegedly most corrupted in the country, respondents put pharmaceutical companies on top, with bankruptcy administrators being the runner-up and construction companies behind them.

Interestingly, IT companies, as well as transport enterprises are deemed as least corrupted.

Meanwhile, in the similar ranking of state institutions, health care providers and hospitals, Lithuanian Parliament (Seimas) and local municipalities share the first three spots, while the State Food and Veterinary Service and large business holdings end the ranking.

Among the ministries, the Health Ministry, the Land Defence Ministry and the Agriculture Ministry were thought in the poll to be most prone to corruption, whereas the Education and Science, the Culture Ministry and the Foreign Affairs Ministry were widely seen as the most transparent.

Corruption-related damage assessment

How big damage does corruption inflict yearly to the state? And how much does it costs to all?

According to the STT representative, the European Union has assessed the bloc’s corruption risks from 179 to 990 billion euro every year.

«Corruption risks-induced direct and implicit damage to Lithuania is at 4.44 billion euro, or 11.4 per cent of our GDP, to believe the assessment by RAND Europe, an independent research centre. Corruption is costly both to the population, business and the state itself,» Dobrynina emphasised.

«Indeed, the losses that the state incurs yearly due to corruption are immense. We all should understand that the money, should it be used properly, could benefit all of us. It is estimated state could allot each of us 1500 euro more every year should the institutions function in a more transparent way,» says Sergeij Muravjov, head of the Lithuanian affiliate of Transparency International.

Nepotism is number 1

In his words, nepotism is the most spread form of corruption in Lithuania.

«Many are talking that opaque, non-transparent and corrupted relations between businessmen and politicians, as well as protectionism of relatives and cronies is the main reason why we are losing millions and billions,» he added.

According to him, a lot (in reducing corruption) depends on the politicians; thence the importance of local municipal councils’ members is key.

«Very often, alas, the municipalities are if bogs of corruption which bogs down all good initiatives of transparency or the will to change anything,» the corruption watchdog head claimed.

Flawed legislation prompts corruption 

Meanwhile, Nerijus Mačiulis, chief economist at Swedbank Lithuania, is convinced that that estimate of corruption in Lithuania – at 4.4 billion euro, to remind – shows that corruption cannot be understood narrowly.

«The biggest damage that Lithuania endures as state relates to large-scale corruption, stemming from flawed legislation, which has potential to constraint investments. As a result, large corporations sometimes tend to bypass Lithuania – the country loses new jobs and a possibility of higher wages in the country,» Mačiulis emphasised.

Lithuania ranked 38th on Corruption Index

Lithuania scored 59 points out of 100 on the 2016 Corruption Perceptions Index reported by Transparency International. Corruption Index in Lithuania averaged 49.67 Points from 1999 until 2016, reaching an all- time high of 61 Points in 2015 and a record low of 38 Points in 1999.

Out of 176 countries rated last year, Lithuania ranked 38th, whereas Latvia stepped down four positions – from the 40th to the 44th position, sharing this place with Georgia, meanwhile Estonia was 22nd.

The index compilers evaluated the corruption in public and political sectors. The assessments were done by local experts and business leaders.

Ref: 111.111.111.4615


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