Agency criticises IMF on graft

From The Nation (Nairobi), 20 July 1999

Nairobi — A leading British NGO has criticised the International Monetary Fund’s approach to tackling corruption in Africa, saying that it is exacerbating the problem.

In a week which saw the IMF spell out their conditions for a resumption of loans to Kenya, Christian Aid wants the Washington—based institution to look again at the whole issue of structural adjustment and the Enhanced Structural Adjustment Facility (Esaf) conditionally.

It says the biggest problem for Esaf conditions is that they are imposed, rather than agreed on.

In particular, Christian Aid wants the IMF and the World Bank to explore the possibility of setting up national debt relief committees to oversee debt relief programmes and ensure that money saved in the future goes to the poorest sections of society.

It gives the example of the Nairobi—based All Africa Council of Churches plea for a national stakeholders committee based on representatives from local civil society groups, the church, the government and parliament and the creditors.

According to the London—based agency’s new report, Curbing corruption: a people’s approach to debt relief, IMF’s conditions imposed under their Esaf programmes have "undermined democracy by making governments more accountable to creditors than to its people. The current terms and conditions demanded by institutions such as the IMF in return for aid and debt relief are making corruption worse."

The report adds that in many cases, IMF conditions have "forced governments to impose draconian measures directly against the wishes and interests of its people."

Moreover, the Esaf conditions do not lead to a curbing of corruption, Christian Aid says.

"While creditors, the World Bank and the IMF talk loudly about the problem of corruption, their policies, particularly in the Esaf programmes, have exacerbated rather than helped stop corruption."

Christian Aid is in particular critical of the IMF and World Bank’s insistence on privatisation programmes, arguing that "the push for privatisation has been a major source of corruption and wasted resources".

Because one consequence of IMF imposed cutbacks is cuts in public spending, particularly for pay for civil servants, doctors and nurses, this has "increased the risk of petty corruption."

Based on it experience with partner organisations in countries throughout Africa, including Kenya, Uganda and Tanzania, Christian Aid says a new ’people centred’ approach to corruption and debt relief should be made.

"Contrary to the image many hold of poor countries, people living in poverty are themselves confronting corruption," the report says. "Many of Christian Aid’s partners emphasised that national debt relief committees should be bolstered by greater parliamentary control over debt relief and any new loans.

"In the long run, it is active ’watchdog’ parliaments, representing the people who elected them, who offer the best safeguard against abuses of power and waste of money by the government. Our partners in countries as diverse as Uganda and Brazil are working towards this end by collaborating with and actively pushing their parliamentarians to take up debt relief issues."

Christian Aid says that debt relief with greater control by the community is already being developed by indebted countries and it says the best examples are Uganda and Tanzania.