Transparency International, Human Rights Watch and the Global Witness joined forces with a letter to the International Monetary Fund’s (IMF) executive board. The letter, sent on April 8 2020, stated that the IMF should include transparency and anti-corruption measures during coronavirus-related emergency programs to ensure that the billions of dollars being disbursed to dozens of countries does in fact go to helping the most vulnerable. 

The coronavirus pandemic is growing with disastrous economic and health consequences for the world. Organisations such as the IMF, with their money and influence have an opportunity to revitalise their much-criticised reputation as world leaders and contributors towards economic development. 

RESOURCES NEED TO GET TO THOSE WHO NEED THEM MOST

The letter highlights the need to ensure that records of where money and resources are being allocated and disbursed on arrival are kept, without which there would be an influx of corrupt activities related to coronavirus spending. 

“Based on the public information available on the programs the IMF has already approved [there are concerns] that the programs lack even minimal anti-corruption measures. For example, on March 27, the IMF Executive Board approved a US$120.9 million disbursement to the Kyrgyz Republic to address the COVID-19 pandemic. In the publicly available materials related to this decision, we were only able to find one anti-corruption commitment from the government”

The letter acknowledges the difficulty in establishing transparency mechanisms given the urgent need to inject funds into local economies. The majority of IMF emergency funding available through one-off lump-sum payments may also mean that the burden rests on local governments to ensure effective allocation of received funds rather than on the IMF itself. The letter overcomes this rebuttal by recognising that countries may need additional support from the IMF, acting as an incentive for the IMF to improve its anti-corruption measures. 

The letter identifies four broad measures, which if implemented would go to ensure the efficient allocation of funds towards sectors which require immediate assistance. Those measures are:

1. Articulate and Demonstrate IMF Commitment to Anti-Corruption

2. Transparency in Public Procurement

3. Audits by internal audit bodies and third parties 

4. Implementation of existing anti-corruption and anti-money laundering framework.

A commitment towards the above measures will ensure IMF funding is spent effectively. Efficient allocation of funding protected by anti-corruption frameworks will allow the IMF and local governments to mitigate some of the dire economic and health related consequences of the current pandemic.

THE GLOBAL HEALTH CRISIS

The global death toll arising from the coronavirus pandemic has exceeded well over 100,000. The pandemic will likely lead to the worst recession since the Great Depression. The IMF has pledged up to $1 trillion to help the governments of developing countries. Plans include, provisions for food and medicine, boosting resources for disaster preparedness and, investing in infrastructure. Over 90 countries have asked for the IMF’s emergency assistance, the highest recorded request in its history. 

THE IMF MOVING FORWARD

In 2018, the IMF executive board announced its commitment to multiple goals including, fighting corruption through its new governance frameworks. In February 2020, the IMF’s managing director, Kristalina Georgieva presented a speech on IMF goals which included, inclusive growth and addressed the inequality of opportunity. The coronavirus pandemic is an opportunity to illustrate a commitment towards the IMF’s said ideals by pursuing transparency in its transactions of loans and aids to developing countries affected by this pandemic.

Greater transparency will restore public confidence in the IMF’s effectiveness and could go a long way in overcoming past criticisms such as, dealings during the Asian Financial Crisis where stringent loan conditions meant many Southeast Asian countries were unable to obtain loans. The positive consequences of the IMF monitoring transactions and transparently reporting funds will ensure that developing countries are protected by those in a position to help them.

Jibran is a fourth year Law and Economics student at the University of Canberra (UC), with a growing passion in International Law. He hopes to make a difference through developing a portfolio of written content alongside pursuing a career as a legal practitioner.

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