November 16, 2012 By Graham Gordon
Exports of African oil and minerals totalled around $333 billion in 2010, nearly 7 times the $48 billion of international aid given to the continent. However, such wealth often provides little benefit to the people living in these countries due to opaque systems that facilitate corruption.
In a world where there aren’t endless pots of money available, we need to ensure that resources – whether from tax, investment or aid – are used to tackle poverty and are not lost along the way.
Increased transparency is one part of the solution.
Tearfund has over a decade of experience working to make government, society, and economy work well, and especially for the poorest. When we ask our partners what they want, the request to support them in fighting corruption comes back time and again. So we help them hold their governments to account. And it works. By pushing budget transparency, partners in Tanzania have seen schools being built and health centres stocked with medicines.
Local budget tracking committee in Tanzania
The UK government recognises that transparency is critical for effective government, engaged citizens and efficient public services. It has set itself the ambitious aim of becoming the ‘most open and transparent government in the world’. This does not stop at our borders: David Cameron is clear that transparency and fighting corruption are part of the ‘golden thread of conditions that enable open economies and open societies to thrive’.
This has borne fruit domestically. DFID came top in the recent rankings for aid transparency and the UK government came third in the Open Budget Index for transparency in budgeting. But if open government is to make a real difference to the world’s poorest people, the UK government must grasp the opportunities of 2013.
As co-chair of the Open Government Partnership (OGP) and chair of the G8, the UK has a unique opportunity to coordinate governments, the private sector and citizens to ensure that resources are used to tackle poverty.
Specifically, we are looking for international action on transparency in government budgets, tax payments, and natural resource revenues.
Transparency in government budgets
Beyond the red box photo calls, budgets can seem dry and boring. But cash is king, and budgets are the heart of government activity. They show where money comes from, and where it goes. As “pasty-gate” reminded us, no budget decision can go unnoticed in the UK.
UK Chancellor George Osborne presenting the budget
But many governments do not have transparent budgets or allow citizen participation. A lot of money can go missing as a result. The good news, as shown by the Open Budget Index, is that improvements in this area are possible reasonably quickly through concrete government action.
The UK should work with other governments – both in the global north and south – to reach the highest standards on budget transparency and citizen participation. The OGP provides a real opportunity for this.
Transparency in tax payments
Research by Christian Aid has estimated that tax dodging costs poor countries US$160bn a year, again money that could be used by developing country governments to invest in vital services and meet the Millennium Development Goals.
Global action is needed to develop and implement rules which prevent companies avoiding their responsibilities to pay taxes, including the automatic exchange of information between revenue authorities, country-by-country reporting of revenues for all sectors and tackling tax havens.
The UK needs to be ambitious in pushing for concrete action through the G8 and G20.
Transparency in natural resource revenues
As mentioned above, revenues from natural resources often fail to deliver the promised benefits.
The UK government has shown strong leadership in this area, pushing for effective EU transparency legislation for companies to publish what they pay to host governments, in line with comparable US rules.
To have the greatest impact, other countries such as Canada, Australia, China and South Africa need similar legislation. Here the UK government can bring together leaders of resource-rich countries to develop global standards of natural resource governance.
On a final note, the government must lead by example by joining the Extractive Industries Transparency Initiative (EITI), and encouraging other G8 and G20 countries to join. With the EITI providing a forum for business, civil society to improve participation, transparency and accountability of natural resource management, surely the most transparency government in the world would want to part of it?
Senior Policy officer – Governance and Corruption
 OECD, (2011), Development At A Glance. ODA to Africa, p2 and WTO, (2011), International Trade Statistics, Merchandise trade by product, Table II.23