World Bank Group: Transparency the Primary Obstacle for Private Businesses Conducting Public Procurement

Monday, October 19, 2015 - 5:00pm

WASHINGTON, D.C.—The U.S. Chamber of Commerce partnered with the World Bank Group to unveil a study of more than 75 world economies, titled Benchmarking Public Procurement 2016, which found that most of the countries have at least one major deficiency in transparency, affecting the ability of private companies to do business with governments in bidding and executing public procurement contracts. The study was unveiled at an event at the Chamber today aimed at engaging with the public and private sector on its findings and the impact it has in all regions of the world economy.

“It’s an incredible task to develop benchmarks for public procurement across 77 different economies,” said Gary Litman, the U.S. Chamber’s Vice President for Global Initiatives. “For American companies operating in this marketplace, this study is an invaluable opportunity to understand how governments spend public money. We appreciate this effort by the World Bank Group to share the knowledge, understanding and experiences impacting operations in this sector, and today’s event was a chance for all of us to learn about the global trends and challenges that are around the corner. We intend to support the Bank in expanding this study to 189 countries next year.”

Key findings from the study include a clear trend of countries moving toward electronic means to conduct public procurement, with 73 of the 77 now having websites dedicated to the process, and 31 of them now allowing companies to bid for contracts electronically. E-procurement is seen as a key mechanism to reducing opportunities for corruption by eliminating the need for in-person transactions, and while it also can drive equal market access and competition, it needs to be fully implemented by countries in order for it to succeed as a standalone reform measure.

The launch event also included separate panels on the public procurement processes in the Americas; Europe, the Middle East and Africa; and Asia and the Pacific. Augusto Lopez-Claros, the World Bank Group’s Director of its Development Economics Global Indicators Group, opened the panels with a discussion on why public procurement has such an impact on a country’s GDP.

“Public procurement, if it is well done, can be a powerful catalyst to improve economic performance,” Lopez-Claros said. “At the same time, if it is not well done it can become a source of corruption, which discourages private sector development.”

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. Its International Affairs division includes more than 50 regional and policy experts and 25 country- and region-specific business councils and initiatives. The U.S. Chamber also works closely with 116 American Chambers of Commerce abroad.