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Transparency in government procurements

 National income of any country comprises consumption and investment expenditure,net exports and last, but not the least, government spendings. Government spendingsare a special type of expediture, which are incurred, along with other things, to look 

after the welfare of its population. Different tiers of government, central,regional/provincial and local, on average spend 10 – 20 percent of the GrossDomestic Product (GDP) on the procurement of goods and services. It is a significantshare of national public finance. According to an estimate, at the global level, non-defence related procurement amounts to an estimated US$1.5 trillion. Amongdeveloping countries, government procurement is estimated to account for 9 - 13

 percent of GDP. This sizable magnitude of government procurement speaks volumesabout its importance for the implementation of development policy and itsrepurcussions at national level.

Every nation has developed some procedures to procure goods and services for public

 purposes. If these procedures are fair, clear, and transparent, they increase efficiency because opacity of such procedures results in corruption. Transparency in these rulesand regulations restricts opportunities of rent seeking by few at the helm of affairs and

 blocks any moves of nepotism. Clearly defined procedures of public procurementgive way to fair allocation of resources and save public resources from being wastedand lead to good governance, which has become a buzzword, though in positivesense.

 Not only the national private sector provides goods and services to government, butalso the companies operating at international level also engage in provisioning of such

goods and services. Sometimes, the lucrative volumes of government procurement inany country attract foreign investment. These investments help produce goods andservices, filling the national savings gap and become sources of revenue in the formof taxes, fees and other payments. The effective use of such revenues, spenttransparently potentially, lead to successful growth and poverty reduction.

It is observed that the state and other institutions managing these resources are notaccountable to the ordinary citizens and their control over resources lures them toembezzle these funds and engage in corrupt practices. There are example of countrieswhere all the procedures in place to use public funds effective, yet they lack the willto implement these rules and regulations. Since majority of resources are siphoned

off, such countries tend to perform poorly in terms of economic development andother governance indicators.

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The issue of transparency in government procurements is also veryimportant with reference to market access in the jargon of international tradenegotiation under the auspices of the World Trade Organization(WTO). Transparency in government procurements is one of the four Singapore Issues. The others include trade facilitaion, trade and investmentand competition policy. These are called Singapore Issues because theseissues were introduced in the WTO during the Singapore MinisterialMeeting in 1996 and four working groups were formed and were given theresponsibility to discuss these issues and recommend whether to bring theseissues for negotiations at the WTO. 

Since public funds are misappropriated through corruption, United Nationshas included corruption as one of the ten points in its Global Compact. TheUnited Nations Global Compact (UNGC) is a strategic policy initiative for 

 businesses that are committed to aligning their operation and strategies withten universally accepted priciples in the areas of human rights, labour,

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environment and anti corruption. Apart from the interest of multinational companies, The United Nations and thedeveloped countries at the WTO, transparency, in not only government procurement,

 but in every walk of life at the national level should be an imperative for the people

and their representatives. Corrupt practices are not a specific phenomenon of developing countries and it would be naïve to believe that there are no corrupt

 practices in the governments in the developed countries. Yet, allegedly this problemis more acute in developing countries, which is reflected by their poor performance ineconomic and social indicators. So the message for anyone who is involved or is atthe verge of entering public life is to give a top priority to transparency.

Choi, I. 1999. ‘Long and Winding Road to the Government Procurement Agreement:

Korea’s Accession Experience’. Paper presented at the World Bank and PacificEconomic Cooperation Council Trade Policy Forum, Manila, 19–20 July

Hoekman, B. 1998. ‘Using International Institutions to Improve Public Procurement’.World Bank Research Observer 13 (2): 249–69.

Labels: Corruption, government procurement, Transparency, UNGC