Addressing the opening plenary of the 19thInternational Anti-corruption Conference , the IMF Managing Director quoted her former boss, the late James Wolfensohn who indicated that “...corruption diverts resources from the poor to the rich, increases the cost of running businesses, distorts public expenditures, and deters foreign investors... it erodes the constituency for aid programs and humanitarian relief. And we all know that it is a major barrier to sound and equitable development.”
Ms. Georgieva pointed out that “it is especially important to zero in on corruption in the midst of this crisis—the worst health and economic crisis of our lifetimes. There is so much suffering that every penny counts towards saving lives and protecting livelihoods.”
She noted that we had reached a point in time “when if people don't trust government, they will not follow the recommended health and containment measures. Corruption corrodes this trust and it weakens the impact of policies and public spending.”
At the IMF, we know what is at stake and we are taking action to help fight corruption both during the crisis, and in the longer term.
“Let me be specific. In our emergency lending, we have provided financial lifelines to 78 countries. And we have sought to balance the need for accountability and transparency against the need to disburse financing very quickly – so doctors and nurses can be paid, and the most vulnerable people can be protected,” the IMF Managing Director said.
She warned countries who have been the beneficiaries of IMF assistance in the COVID-19 pandemic that they must be accountable “Some of you may have heard me saying, spend what you need but keep the receipts. Accountability cannot take a back seat in this crisis,” she declared.
“What does that mean in practice? First, all countries receiving emergency financing from the IMF must accept a safeguards assessment of the central bank. This is an IMF assessment of a central bank’s governance and control framework to ensure that it can manage IMF resources properly.
“Second, we have asked countries to commit to specific anti-corruption measures such as publishing crisis-related procurement contracts and information about the beneficial owners of winning companies.
“Third, countries must also commit to enhanced monitoring of COVID-related spending and to conduct an audit of crisis-related spending. This will be the moment to check the receipts.
“For example, countries such as Guatemala, Honduras and Rwanda are using Financial Management Information Systems to track COVID-related expenditure. And in Sierra Leone, the Supreme Audit Institution is already undertaking an interim audit of COVID-19 funds.
“Fourth, in THE IMF’s regular policy consultations with all members—rich and poor—we are recommending that special attention be paid to transparency and accountability of exceptional measures undertaken during the crisis. We also disseminate good practice examples – so countries can learn from each other.
This matters tremendously to everyone, but it is especially important to the most vulnerable people in societies.
We know it is the poorest and most vulnerable people that are at highest risk from the pandemic and the economic consequences of the pandemic. And we know we know that among low-income countries, the share of the budget dedicated to education and health is one-third lower in highly corrupt countries. Corruption keeps children out of school, and it stops people who are sick getting the treatment they need.
In the words of Pope Francis – “corruption is paid by the poor.” So, our efforts to tackle corruption must continue over the long term – because fixing governance vulnerabilities requires time and perseverance.
At the Fund, much of our work on this issue is undertaken through our 2018 Framework for Enhanced Fund Engagement on Governance. And I want to pay tribute to Christine Lagarde for stepping up the Fund’s work in this area.
We help our members strengthen anti-corruption efforts in six key areas – fiscal governance, financial sector oversight, central bank governance, market regulation, rule of law, and anti-money laundering.
We also look at transnational aspects through assessments of national frameworks to limit opportunities for corruption through foreign bribery or laundering of proceeds of corruption. Ten countries – the G7 plus Austria, Czech Republic, and Switzerland – have volunteered so far and we urge others to join this important initiative.
And in our work on data transparency we urge citizens to keep track of how public money – their money – is spent. Civil society has an incredibly important role to play in this work, including by helping us all to do better. And we are very grateful for that.
The International Anti-corruption Conference (IACC) the world’s largest conference on anti-corruption, which is organized every two years by Transparency International in partnership this year with the Republic of Korea. It brings together around 3,000 participants from government, civil society, and the private sector to discuss the latest challenges and solutions to tackle corruption.
This year’s theme is “Designing 2030: Truth, Trust & Transparency.” The conference, taking place from November 30 to December 5, is focusing on the COVID-19 pandemic and the ways in which corruption hinders the much-needed recovery work, and also on what anti-corruption measures need to be implemented to ensure a fair, inclusive and equitable road towards the 2030 Sustainable Development Goals.
- Countries: United_States
- IMF Says 85 million jobs will be displaced over the next five years
- BARBADOS | IMF says despite COVID-19 blows, B'dos economy making progress
- T&T | IMF warns that COVID-19 could pressure some TT Banks
- IMF Approves US$4.3 Billion in Support to South Africa for the COVID-19 Pandemic
- AFRICA | IMF, moots Cautious Reopening for Sub-Saharan Africa