Introduction

The pervasiveness of corruption in Bangladesh is well-documented and widely discussed, but its ramiϐications for small and medium-sized business sectors are rarely examined. The sector of small and medium enterprises (SMEs), which comprises 50.91 percent of the microeconomic sector, 35.41 percent of workers, 48.41 percent of the GDP, and 47.63 percent of total value added, has been largely neglected. Academics and business owners in Bangladesh concur that the incidence of corruption is intrinsically linked to the country’s system of governance and socioeconomic ethos. Inclusive and transparent governance is essential for preventing corruption. Such a system of governance requires the engagement of economic reformers and the private sector.In January 2021, the Centre for Governance Studies (CGS) launched a project with the support of the Center for International Private Enterprise (CIPE), titled ‘Engaging the Private Sector in Promoting an Inclusive, Accountable, and Corruption-free System of Governance in the Post-Covid-19 Era’, with the aim of empowering the private sector and economic reformers to investigate the steps required to expand the space for participation. The objective of the project is to evaluate the condition of corruption at the local level and its effects on the private sector, especially on the SMEs.The project had several components: a) An assessment report of: the state of SMEs in Bangladesh, government policies towards the sector, approaches of the national and regional trade bodies towards governance and corruption issues, and support networks of the SME sector. A desk review of various publications about the SME sector was also conducted, and a total of 152 publications from 10 national and regional trade organizations were gathered and analyzed. Based on these ϐindings, individuals connected to national and regional trade bodies, leaders of business support organizations, academics, and experts were identiϐied, and 15 Key Informant Interviews (KIIs) were conducted between December 1, 2021, and March 15, 2022. The assessment report was published on July 2022.b) Two surveys were conducted independently: one on the awareness and perceptions of corruption among households, and another on the perceptions and types of corruption in the SME sector. These two surveys were carried out in 2021 and 2022. Between August 27 and September 8, 2021, 1,231 nationally-representative individuals participated in the Household survey. Using the Resilient Distributed Datasets (RDD) method, respondents were chosen at random. The SME Survey was performed between mid-October and mid-December 2021 with 800 nationally representative SMEs, including 400 manufacturing and 400 service sector businesses. Computer-Assisted Telephone Interview (CATI) was used to conduct telephone interviews with household respondents and SME representatives. Household Perception Survey ϐindings were released on May 1, 2022, while SME Survey results were released on September 9, 2022.c) To gather the grassroot entrepreneurs’ perceptions, experiences, challenges, and suggestions regarding the way forward in addressing corrupt practices, eight regional consultations were held between June 27 and September 10, 2022, at eight divisional headquarters: Barisal, Chittagong, Dhaka, Khulna, Mymensingh, Rajshahi, Rangpur, and Sylhet. A total of 194 entrepreneurs of SMEs and individuals engaged with the SME sector participated in these regional consultation meetings.

d) All the data gathered since the inception of the project were presented to several prominent members of Bangladesh’s civil society, politicians, representatives of ϐinancial institutions, academics, journalists, and SME entrepreneurs at a conference in Dhaka on January 29, 2023, titled “Call to Action Against Corruption”.