Profiting from the pandemic: COVID-19 and corruption

A second wave of the COVID-19 pandemic is sweeping through the Western Balkans and many countries are again in lockdown. Since the start of the pandemic in March 2020, the GI-TOC’s regional network has reported numerous incidents regarding secretive tendering processes for the purchase of protective equipment, coronavirus tests, medical supplies and other health equipment. There are serious concerns that the pandemic has further enabled possible misuse of state funds.¹

During the first wave, it was evident that public-procurement processes across the region had already become more opaque, and that space for civil-society organizations and the media to report on issues of corruption and organized crime was shrinking.² That trend has continued during the second wave, with criminals and corrupt officials being quick to spot opportunities while citizens suffer.

Some procurement processes are not only opening the door to corruption, but also creating risks to public health. In a notorious case in Bosnia and Herzegovina, a senior official in charge of procuring medical equipment was suspended after ventilators that were imported from China by a raspberry-processing firm (for US$5.84 million in public funds) turned out to be defective.³ As of mid-November 2020, none of the ventilators had been used and no one had been charged. There are also reports, for example from Serbia,⁴ of people buying and selling negative PCR tests for €30 to €100 to facilitate border crossings.⁵

As in other parts of the world, consumers in the Western Balkans are vulnerable to fraudsters selling counterfeit medicines and masks, particularly online – a risk that could increase when a vaccine becomes available. There is also a fear that government compensation schemes to private businesses aimed at cushioning the economic costs of the pandemic could be abused by criminals.

A football referee gets tested for COVID-19 in Pristina, Kosovo.

© Armend Nimani/AFP via Getty Images

The situation in Kosovo is symptomatic of concerns expressed in other countries of the region. In the past few months, public criticism in Kosovo has been directed at allegations of corruption around private testing services and political interference in the country’s pharmaceutical market.

Testing concerns centre on the licensing of private medical laboratories to provide testing, in addition to public hospitals. A few laboratories were initially permitted to operate as of August 2020;⁶ however, only one was licensed to perform real-time PCR (RT-PCR) testing services to diagnose COVID-19. Other licensed laboratories were only allowed to perform serological (antibody) tests.⁷

According to Kosovar media, the sole laboratory licensed to perform RT-PCR tests is owned by a private company with close links to the ruling parties and a history of trying to monopolize certain services, like car registration.⁸ The main complaint by concerned citizens is that this company is charging around €200 for a rapid test from its laboratory, although it usually costs around €65.⁹ The Ministry of Health was heavily criticized for enabling a company to abuse its position as the sole private provider of such testing services.¹⁰

Given the negative effects of the pandemic on the already weak Kosovar economy,¹¹ critics have pointed out that the state should have prevented a private company from acquiring a monopoly on an essential service and that it should have intervened to set price limits for testing. Yet, the Ministry of Health has stated that ‘it does not fix the prices of these services’.¹² Nevertheless, in response to fierce public criticism, the government granted licenses in early September to two other private medical laboratories able to carry out
RT-PCR testing, thus ending the monopoly.¹³

The Kosovar government has also come under fire for interfering in the pharmaceutical market to the detriment of the population. In August 2020, the government abrogated a by-law that determined and regulated the prices of medicinal products for wholesale and retail in the private sector.¹⁴ This set off a heated debate in which the Minister of Health was strongly criticized for a decision people feared could lead to a significant increase in the cost of essential medication, as well as hoarding and price gouging of medical products related to the pandemic or even the creation of a black market.

Indeed, the pharmaceutical community in Kosovo labelled the abrogation a criminal act and demanded that the minister resign,¹⁵ and Kosovo’s opposition parties said that the move paved the way for organized crime and corruption networks to profit from the pandemic.¹⁶ Under this heavy pressure, the minister reversed the abrogation and ordered the ministry to amend the current by-law to more effectively determine the pricing of pharmaceutical products.¹⁷

The pandemic has exposed weaknesses caused by poor governance and corruption, risks exacerbating already vulnerable socio-economic and health conditions, and has created opportunities for organized crime and corruption. As COVID-19 cases rise for a second time in the Western Balkan countries, lessons learned from the first wave need to be applied, particularly in monitoring procurement processes, ensuring fair pricing and competition and maintaining institutional integrity. In this extraordinary situation, controls must be increased on how public money is spent. Otherwise, public institutions will be further weakened by corruption.

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