84% of businesses see favouritism, corruption as hampering competition

84% of Malta’s businesses see favouritism and corruption as hampering competition, 64% see bribery and the leveraging of connections as the easiest way to obtain public services, and 35% feel the only way to succeed in business is to have political connections.

In the latest Eurobarometer survey published by the EU on Friday, 55% of Maltese businesses reported that nepotism and patronage were the primary problems they faced when doing business. In comparison, 56% of Malta’s businesses cited general corruption.

The rates are far higher than those of their European counterparts, of which only 37% (nepotism and patronage) and 35% (corruption) felt such issues were problematic.

70% of Maltese businesses have also said that close links between the business and political arenas lead to corruption.

Corruption in public tenders

31% of Maltese businesses felt that corruption had prevented them from winning a public tender over the last three years, while 45% replied in the negative.

Conflicts of interest when it comes to the evaluation of public procurement bids were listed by 68% of respondents as the major problem with public tenders. That was followed by the involvement of bidders in the design of specifications (63%), collusive bidding (61%), the abuse of emergency grounds to justify the use of noncompetitive or fast track procedures (56%), the use of negotiated procedures – i.e. direct orders – (48%) and amendments being made to the terms of contracts after they are awarded (47%).

76% of businesses, compared with 92% of the general population, thought that the overall problem of corruption is widespread across the country.

Among the leading factors identified were 44% of businesses citing the funding political parties in exchange for public contracts or influence over policy-making; 41% cited the favouring friends and/or family members in public institutions, 37% listed the favouring friends and/or family members in business and; 28% cited bribery and 25% mentioned kickbacks. Another 20% referred to the practice of offering a gift or trip in exchange for a service.

Little faith in court judgements

Malta’s businesses also appear to have little faith that the courts deliver justice as advertised.

47% of businesses said it was likely that people or businesses engaging in corrupt practices would face charges and go to court, and 43% feel they get off scot-free.

45% believe they would be caught by or reported to the police or prosecutors, compared with 46 % who believe they wouldn’t.

But when it came to whether they would be heavily fined or imprisoned by the courts, only 23% of businesses were confident of that, compared with 66% of businesses that felt otherwise.

41% of businesses agreed, and 44% disagreed that people and businesses caught for petty corruption are appropriately punished in Malta.

In comparison, only 37% of businesses agreed that measures against corruption are applied impartially and without ulterior motives, compared with 47% that disagreed with the statement.

But, again, there was little faith in proper punishments being meted out by the courts, with 33% of businesses agreeing that people and businesses caught bribing a senior official are appropriately punished, compared with the majority, 56%, who disagreed.

Nine in 10 feel links between politics and business too close for comfort

Compared to the business community’s 76%, 92% of the general population sees corruption as widespread.

Bribery and the abuse of power were viewed by 79% of the population as being rampant in the political arena, followed by officials awarding building permits and public tenders – at 78% and 73%, respectively.

65% of people believed graft was involved when it came to issuing business permits – up 15 points from 2022, while 84% of the general population agreed that bribery and the leveraging of connections as the easiest way to obtain public services of any kind.

91% of Maltese believe that links between politicians and business are too close for comfort and lead to corruption, while 87% believe corruption is simply part of the country’s business culture.

The perspective of the business sector was part of a broader study that showed that over 90% of the population believed corruption was rampant in Malta.