Business people who are satisfied with the general business environment decreased to 12.4 percent from 27.2 percent since 2012 in Mongolia.
As a part of the Strengthening Transparency and Governance in Mongolia (STAGE) project, the Asia Foundation and the Sant Maral Foundation released a fourth Study of Private Perceptions of Corruption (STOPP). This study was released to combat the nation’s corruption problem by instigating good governance and increasing transparency within society. This project is currently funded by the United States Agency for International Development (USAID), an organization that wishes to expand democratic governance while promoting a system of checks and balances.
The first study in the STOPP series was published in December of 2012. The main focus of these studies examined the effects of corruption and bad governance in Mongolian society as conflicts of interest are rampant. The fourth survey that was released earlier today interviewed 330 senior-level managers of Mongolian businesses in April of this year in an attempt to provide a bigger picture of corruption levels.
These surveys hope to establish awareness for the need to increase transparency and accountability of the Mongolian Government as well as to receive proactive action from Mongolian companies. It was also shown that taxes are considered to be the major obstacle in terms of establishing business practices. On the bright side, the number of companies with established written policies against corruption rose to 17 percent from 9.7 percent since 2012.
There are many obstacles in the way of practicing good governance. While taxes represent the biggest obstacle – at 52.4 percent as of April 14 of this year – other obstacles also presented a huge problem. They include, but are not limited to, obtaining and renewing licenses and permissions, access to credit, strong competition from other companies, low level of professionalism, and the conditions of the labor market making up 27.3 percent, 27.0 percent, 26.7 percent, 16.7 percent, and 14.2 percent respectively.
It is also important to note that in all four surveys, many believe that the level of corruption is much higher in the public sector than it is in the private sector. As of April 2014, 43.9 percent of participants believe that there was a lot of corruption in the public sector, compared to 0.6 percent who believed that there is no corruption. The private sector, on the other hand, showed that 6 percent believed there was a lot of corruption and 24 percent believed that there is no corruption.
The survey also shows that compared to December 2012, when 43.0 percent of participants said that public sector corruption affected their businesses, the number rose in April 2014 to 47.6 percent. The majority surveyed that existing laws are hardly effective at making the business environment transparent and non-corrupt, with a percentage of 40.9 percent. This number is high compared to the 2.1 percent who believe the existing laws are very effective. Similar results are presented when participants were asked how effective the steps the Government is taking to eradicate overall corruption in Mongolia and how often the Government punished corrupted officials.
Multiple sectors are vulnerable to corruption. The most recent release of the survey unveiled that government services are the most susceptible at 68.8 percent. Construction and mining follow close behind at 57.0 percent and 48.2 percent respectively. Companies in other private services and manufacturing are judged to be the least likely to encounter corruption in their course of work.
Many of these participants agreed that net income would increase if the extent of government corruption was to be reduced. In the construction sector, 72.5 percent of partakers believed this would be the case in addition to 54.1 percent in the manufacturing sector, 45.6 percent in the trade sector, and 48.2 percent in the services sector. They also noted that a majority of members, ranging from 71.5 percent in December 2012 to 72.7 percent in April 2014, stated their company has not taken any steps to combat fraud or corruption. This is also consistent with 81.8 percent of participants in December 2012 and 89.1 percent in April 2014 who said they never reported a case of corruption.
This study of private perceptions of corruption clearly shows that fraud and corruption is rampant within all sectors, especially in government services. These numbers help create awareness of corruption issues that the Government needs to tackle in order to effectively promote transparency, good governance and accountability. Numbers remained consistent, if not more severe, over the past four surveys beginning in December 2012, marking the rigorousness of dishonesty found within Mongolia’s developing economy.
SOURCE: Mongolian Economy