INTERNATIONAL Monetary Fund (IMF) managing director Kristalina Georgieva says corruption hurts the most vulnerable in society, therefore, accountability cannot take a back seat even during the COVID-19 pandemic.
Georgieva was speaking during the opening plenary of the virtual 19th International Anti-Corruption Conference (IACC) which was hosted by Transparency International (TI) in South Korea and moderated by TI vice chairperson Rueben Lifuka, Tuesday.
Georgieva said it was important to fight corruption amid the COVID-19 crisis.
“It is particularly important to zero-in on the fight against corruption in the midst of a crisis. This is the worst economic crisis we have seen in our lifetimes. There is so much suffering to people, every penny counts, and it counts to save lives and protect livelihoods. It is also a time, if people don’t trust government they wouldn’t follow the health and containment measures government recommends. Corruption corrodes this trust, it weakens the impact of policies on public spending and the IMF we know what is at stake, and we are taking action to fight corruption – both during this crisis and in the long-run,” Georgieva said.
“Let me talk specifically starting with our emergency financing, we have provided financial life-line to 78 countries. We have taken to heart the advice of this community to make sure we balance transparency and accountability with the pressing demands to disburse financing very quickly so that doctors and nurses can be paid, and the most vulnerable people in the society can be protected. Spend what you need, keep the receipts, accountability cannot take a back seat in this crisis.”
She outlined the terms needed for a country to be able to receive emergency funding from the IMF.
“One, before providing emergency financing, we carry out a Safeguard Assessment of the country’s central banks. This is an IMF assessment to make sure that the central bank has governance and control frameworks to properly utilise our funds; two, we have asked countries to agree to specific anti-corruption measures, such as publishing crisis-related procurement contracts, information about benefitial owners of those that win these contracts, and thirdly, we have asked countries to commit to enhance monitoring of COVID-related spending and to conduct audit of crisis-related expenditure. This is when we check the receipts, ‘do you have the receipts?’ Let us see whether they are accurate. We have countries, like Guatemala, Honduras, Rwanda using the Financial Management Information System to track COVID-related expenditures; four, we are making sure that attention is paid to transparency and accountability of exemption measures undertaken during this crisis,” said Georgieva.
“This matters tremendously to everyone, but it matters first and foremost to the most vulnerable people in society. We know it is the poorest and vulnerable people that are at highest risk from the pandemic and the economic consequences of the pandemic and we know among low income countries, the share of the budget dedicated to health and education is one-third lower in highly-corrupt countries. In other words, corruption keeps children out of school and it stops people who are sick from getting the treatment they need. In the words of Pope Francis: ‘corruption is paid by the poor,’ so it is paramount that we take this fight to heart and for the longer term.”
And World Bank managing director of development policy and partnerships Mari Elka Pangestu said despite the World Bank giving emergency funding to various countries, corruption still played a major risk in uplifting the lives of the vulnerable.
“The World Bank has mounted an exemption response providing emergency assistance to over 100 countries. We will be deploying a total of US $160 billion, including US $12 billion for vaccines. We also recognise that the challenge is not just mobilising resources, the level of funding for emergency funding; stimulus packages and safety net packages are enormous and so other risks of corruption and inefficiencies that affect the most vulnerable. The most vulnerable will be the most affected if these resources do not reach those who need it,” said Pangestu.
“Corruption also weakens trust in institutions, institutions that will be important when we start our recovery process because we need to recover investments. We really need to address the trust deficit; we need to take building trust to another level. If the international community does not act, we risk a downward spiral of eroding trust, weakened control of pandemic, slow recovery and the threat of not reaching the SDG 2030 goals.”
On the other hand, World Economic Forum (WEF) president Borger Brende said the global economy loses about US $3.6 trillion due to corruption.
“The World Economic Forum has coined this as the ‘great reset that is necessary.’ We need to place good governance, transparency and accountability at the heart of our efforts. Every US $500 billion of healthcare expenditure is lost to corruption. This has an impact, of course, on the production and the procurement of medicines and medical equipment, jeopardising the timely delivery where they are needed the most. Each year, the global economy loses an estimated staggering US $3.6 trillion! This amounts to about one-third of the approximately US $10 trillion that has been pledged and is starting to be deployed now as recovery and stimulus packages. Now, more than ever, when we are revitalising the health of our societies and economies is so important, re-doubling our efforts against corruption really is paramount important,” said Brende.
Meanwhile, speaking earlier through a recorded video, United Nations Secretary General Antonio Guterres revealed that the global COVID-19 pandemic was increasing the risk of corruption in the health sector.
“Corruption squanders public resources undermining sustainable inclusive development and peaceful societies. It angers people rightly and erodes trust in their leaders. The global COVID-19 pandemic is increasing the risk of corruption from the health sector to public procurement, stimulus packages and rescue funds. A strong recovery must include measures to combat corruption and bribery. The United Nations is providing support to governments on including such measures in their response packages,” said Guterres, who also once served as Portugal’s prime minister.
“Today’s meeting is an important chance to discuss how governments, international organisations and civil society can work together to reinforce anti-corruption measures contributing to a strong recovery and the achievement of the 2030 Agenda for sustainable development. We must all do more to prevent and reduce corruption. There is too much at stake!”
Others participants at the forum were Asian Development Bank president Masatsugu Asakawa, OECD secretary general Angel Gurria and Guterres’ predecessor Ban Ki-moon, the former UN secretary general.
In Zambia, a total of over K1.3 billion worth of COVID-19 funds were found to be misapplied, which included dubious transfers from Zambian government accounts to commercial bank accounts amounting to K60 million, according to the Auditor General’s Interim Audit Report released last month.
It also revealed that the Ministry of Finance failed to indicate the actual funds it received from cooperating partners amounting to K6.3 billion.