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The high-profile case of Phajo Nidup, accused of embezzling about Ngultrum 1 billion, is a historic example of massive fraud in the country’s history. The verdict, while punishing the accused as well as the junior and mid-level officials who accepted bribes, failed to hold the top leadership of these organizations accountable. In such a massive case of institutional failure, specific legal and ethical responsibilities should be imposed on the Board, CEO, Mayor Thrampon and other senior executives who were given significant privileges and decision-making power under their leadership, and better measures should be put in place to prevent such massive fraud as this is not the first time our banks have failed. Punitive measures such as huge fines, dismissal and even criminal prosecution must be taken against those at the helm who failed to implement strong governance mechanisms to detect and prevent such massive corruption and financial misconduct. Financial services such as loans are barely accessible to the less fortunate such as farmers and unemployed youths, and banks are generous to the rich and those with wealth and property.
Another important aspect is the issue that the state must look at from an economic perspective. Studies have shown that corruption is linked to the economic status and remuneration of civil servants, especially at the lower end of the income scale. When civil servants struggle to make ends meet because their meager salaries cannot keep up with the rising cost of living, the temptation to supplement their income through illegal means increases significantly.
Countries like Denmark, Norway and Singapore have among the lowest corruption rates in the world because of the competitive remuneration packages for government employees and the comprehensive benefits for civil servants. We often use Singapore as an example. In addition to the competitive salary of an average of $42,049 per year, Singaporean civil servants also enjoy generous leave benefits to promote work-life balance. These benefits include vacation, medical, marriage, maternity/paternity leave, parental leave and child allowance, and medical expense subsidies. There are also flexible work schedules, performance-linked bonuses and unique benefits such as the Singapore Civil Service Card, which enjoys exclusive discounts across the island. In addition, they also have generous retirement savings benefits. This incentive system reduces the economic motivation for corrupt behavior. In Bhutan, with the exodus of civil servants in recent years, work-life balance has become almost impossible, especially when most civil servants have multiple jobs. Studies have shown that when legitimate income is sufficient to meet economic needs, the temptation to abuse one’s position for corruption is reduced. In contrast, “countries with lower civil service remuneration and living costs face persistent corruption problems.”
To address the twin problems of lack of accountability and inadequate public service remuneration, the Bhutanese legislature should establish an independent ombudsman with the power to investigate wrongdoing and impose severe penalties on all levels of government, including top decision-makers. This ombudsman must have prosecutorial powers and the ability to impose penalties such as fines, dismissal, and criminal charges on corrupt officials, regardless of rank or status. In addition, we must avoid imposing training guarantees or mandatory service obligations, as these coercive measures have been shown to be counterproductive and breed resentment, leading to a brain drain and brain drain, which in turn leads to higher turnover rates.
To emulate Singapore’s success, Bhutan must hold corrupt senior leaders equally accountable, treat civil servants fairly, establish an independent ombudsman, and provide competitive public sector salaries to discourage corrupt practices.
Sonam Tsering
Lawyer, Thimphu
Disclaimer: The opinions expressed in this article are the author’s own.
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