Politics of Poverty

The COVID-19 accountability emergency

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Oxfam in Uganda is working with civil society organizations to amplify the voices and needs of Ugandan citizens in terms of the country’s fiscal system, which determines taxation and public spending. Photo: Oxfam

Governments must open up their budgets to public scrutiny when billions of dollars are flowing to end the crisis.

COVID-19 has become a triple threat—a health emergency, a food and hunger emergency, and an economic emergency. Oxfam is calling for a global economic response of $2.5 trillion to address the crisis and poor countries especially need help, including cancellation of debt payments, increases in aid and progressive taxes, and emergency economic support from the International Monetary Fund (IMF).

These needs are stark and real. But there is also an underlying accountability emergency—the need to pair rapid spending with increased transparency, oversight and participation to help ensure that huge new sums actually go to help the most vulnerable in our societies.

Where you might ask? Everywhere.

Prioritizing people over US corporations

As trillions of dollars have been allocated to addressing the worsening economic crisis in the US, there remain deep concerns about transparency, accountability, and oversight gaps to make sure money is not lost through waste and poor procurement practices.

President Trump’s son-in-law, Jared Kushner, has led a COVID-19 task force that has drawn criticism from US watchdogs. News organizations have sued the government to release information on which businesses have received loans meant for small business. A sitting US senator is now reportedly under investigation for allegedly using undisclosed government briefings to make stock trades.

That’s why Oxfam America is pushing the government for a transparent and accountable response that prioritizes people over large corporations, such as the oil and gas industry. We support the Coronavirus Oversight and Recovery Ethics Act (CORE Act) introduced last week in Congress. This bill proposes a suite of accountability and oversight measures—such as defending whistleblowers and improving transparency—which should help ensure that funds are not misused.

Budget transparency is sorely lacking—and the IMF knows it

For many developing countries, the IMF has become an important emergency lender. Globally, the IMF has stepped up and released more than $20 billion in loans as of mid-May in just a matter of weeks; Oxfam wants to see more action through the use of the IMF’s Special Drawing Rights.

While the IMF is rightfully proud of this quick action, it also acknowledges the risks of moving so much money so quickly. Its guidance emphasizes that “using the key ingredients—fiscal transparency, public accountability, and institutional legitimacy—in designing, implementing, and overseeing the emergency support packages will serve governments well.” But how present are these key ingredients in the countries receiving IMF emergency support?

Not very, according to the International Budget Partnership’s Open Budget Survey (OBS) released at the end of April. Of the 37 countries receiving IMF emergency lending as of mid-May AND included in the 2019 Open Budget Survey, the average budget transparency score was only 39.4 out of 100. Of course, transparency is one thing—while opportunities for citizens to participate, and influence key decisions, during the budget process are quite another. On this front, the countries receiving IMF emergency assistance do even worse, with an average score of 12.1 out of 100.

A call for open budgets and solidarity with civil society groups

These OBS scores are not a reason to limit support to countries in need but they are a wake-up call. That is why Oxfam has joined more than 100 other organizations from around in the world in A Call to Open Budgets. This appeal targeting national governments calls for big improvements over the next five years on transparency, participation and oversight.

But we don’t have to wait five years. Around the world through our Fiscal Accountability for Inequality Reduction (FAIR) program, Oxfam supports citizen-led efforts in more than 40 countries to ensure that tax systems are progressive; budgets are responsive to citizen input; and that expenditures prioritize social services that reduce gender and economic inequalities.

Many of these Oxfam partners have written to the IMF in recent weeks to raise concerns about fiscal transparency and accountability issues.

  • In Mozambique, which scored 42 out of 100 in the OBS, civil society group FMO – Forum de Monitoria de Orcamento – and Oxfam in Mozambique wrote to the IMF before the approval of $309 million in emergency lending. The letter urged full transparency of the funds and that civil society must be allowed and “actively encouraged” to play a watchdog rule on the use of the funds.
  • In Nigeria, civil society groups BudgIT, CODE, CISLAC and Oxfam welcomed the approval of $3.4 billion from the IMF, but called on the government and the IMF to support civil society efforts to “follow the money” to monitor the disbursement of funds. The collapse in oil prices has deeply cut government revenues, so responsible spending, in a country with an OBS score of 21, will be crucial.
  • In Uganda, where the IMF approved $491.5 million in early May, the Civil Society Budget Advocacy Group (CSBAG) and Oxfam in Uganda welcomed the support but said that, “to ensure transparency and accountability particularly when the country is experiencing limited movement, full parliamentary oversight and independent civil society tracking and monitoring of emergency expenditures is crucial. However, the civil society can only play its role when it has access to information with regards to the government’s spending of the emergency funds.” As in Nigeria and Mozambique, the Ugandan government, with an OBS score of 58, said they “plan to report separately on the use of the funds, undertake and publish an independent audit of crisis-mitigation spending and publish large procurement contracts.”
  • In neighboring Kenya, where the IMF has approved $739 million in emergency funds, civil society organizations in the Okoa Uchumi coalition have called on the government to manage IMF and other Covid-19 response funds with “ruthless accountability, transparency and robust public engagement to ensure proper targeting of interventions, value for money and prevention of corrupt practices.”

These countries accept the need for international support but civil society groups are concerned that the mistakes of the past could be repeated.

We need short-term action now–including enhanced fiscal transparency and citizen participation–by all actors to address the accountability emergency as well as longer-term action to fulfill the spirit of the Call to Open Budgets to build back better once we pass this crisis phase. The IMF has an important role to play in standing in solidarity with these civil society watchdogs and Oxfam has joined with groups around the world to promote concrete steps the organization could take to empower and assist groups to monitor funds.

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