Bangladesh graft drive won't hurt economy, TI says

DHAKA, Nov 3 (Reuters) Transparency International Chief Huguette Labelle said today a crackdown in Bangladesh on corruption would not drive down the impoverished country's economic growth.

Labelle told reporters at the end of her three-day visit to Bangladesh, ''It (anti-corruption drive) doesn't reduce economic growth.

''People should look for other factors like rapid rise of oil, gas and food prices, that contribute to economic slowdown.'' The International Monetary Fund has said the country's economic growth may slow down to 5.5 per cent in the current financial year to June 2008, from 6.5 percent in the last year, because of the anti-corruption drive launched by the country's army-backed interim government and recent flooding.

The drive has also scared Bangladesh's business community, leading to lower imports and investment, officials said.

More than 170 key political figures, including two former prime ministers and dozens of their cabinet colleagues have been detained in the countrywide corruption hunt.

Labelle lauded the interim authority for the anti-graft drive, appointing an independent Anti-Corruption Commission and formal separation of the judiciary from executive control designed to ensure justice for all.

But she cautioned that it would take a long time to win a decisive victory in the fight against corruption.

The interim authority which took over in January following months of political violence, has vowed to hold a free and fair election before end of 2008, after cleaning up of politics.

Corruption spread to all levels of political, administrative and social systems in Bangladesh during the last 15 years of democratic governance, under the detained ex-premiers Sheikh Hasina and Begum Khaleda Zia.

Until 2005, the global corruption watchdog rated Bangladesh as the most corrupt nation in the world for five straight years.

Terming corruption a major hurdle for development of the country, the TI chief said Bangladesh could attract huge volumes of foreign investment if corruption could be rooted out.

REUTERS SKB ND1828