Survey: Lack of Governance is Major Cause of Corruption in Pakistan

Promoting entrepreneurship is an important priority for Pakistan’s economic development. However, according to Global Entrepreneurship Monitor, Pakistan lags in startups, with less than half the rate of early-stage entrepreneurial activity found in other similar economies. One of the key reasons is the high level of corruption, which deters young entrepreneurs from becoming entrepreneurs.

In Pakistan, corruption is one of the major stumbling blocks in the economic development of the country. In an earlier post, major corruption cases, possibly involving government functionaries, were shown to be a serious drain on the economy.  These cases are still unresolved and the nation is still bleeding billions of rupees due to corrupt practices. The worst sufferer is the private sector, because inflated contracts and kickbacks greatly increase the cost of doing business. Also, the standards of work and quality may be compromised, creating a vicious cycle of debt burdens and inferior services that drags down the whole economy.

To help understand the impact of corruption on young entrepreneurs, the Islamabad Chamber of Commerce & Industry, through its Young Entrepreneur’s Forum, has worked for over six months under a grant from CIPE Pakistan to survey entrepreneurs about their perceptions of corruption. CIPE has been building the Islamabad Chamber’s capacity to support youth entrepreneurship since 2007 with key initiatives including the Young Entrepreneur’s Forum, approval of youth policy, establishment of an Entrepreneurship Development Center, and the design and organization of two youth conferences. This latest effort will help to better understand one of the biggest obstacles faced by young entrepreneurs in Pakistan.

These survey results are astonishing, and, for the very first time, an anti-corruption initiative has been started by young entrepreneurs. The key finding reflected from the respondents is:

“The most important message is that corruption is viewed as a governance issue, which includes poor law enforcement, archaic regulations and weak internal compliance systems. Thus it calls for improving both public administration and corporate governance.”

See a complete summary of the survey’s findings below:

2 Responses to Survey: Lack of Governance is Major Cause of Corruption in Pakistan

  1. Saad Amanullah Khan

    An excellent expose on the underlying challenges to the private sector and boldly highlight our economy’s Achilles Heal. For new entreprenuers the issue of corruption and lack of governance is clearly a very serious one as they have enough challenges like short of funds, experiance and busines risk — and to then face external interference and coersion. This survey clearly highlights and confirms the a very important hurdle to doing busienss in Pakistan.

  2. Its a very comprehensive survey that pinpoints the root cause that restricts free flow of business activities in the country.