IMF sees governance weaknesses that can lead to corruption
The International Monetary Fund (IMF) has highlighted gaps in Guyana’s governance structure which it contends could lead to corruption.
According to the Staff Report from its 2019 Article IV Mission, weakness in several key areas such as fiscal governance, regulatory framework, rule of law, and AML/CFT could give rise to corruption vulnerabilities.
The staff noted that authorities have taken steps to strengthen governance in the areas highlighted, but capacity weaknesses continue to impact decisive implementation of policy actions.
Specifically key governance institutions such as the Financial Intelligence Unit, National Procurement and Tender Administration Board, Public Procurement Commission and the Integrity Commission face significant capacity weaknesses with severe staff shortages, particularly legal and accounting expertise, the report highlighted.
“This severely impacts the ability of the institutions to ensure compliance with existing regulations, conduct investigations including for politically exposed persons (PEPs) and implement additional actions to further strengthen governance systems to address corruption vulnerabilities,” it stressed.
Efforts by the authorities to strengthen governance, in the areas of anti-corruption and transparency in the extractive industry, and procurement were noted and commended.
These commendations were premised on the submission of the Extractive Industries Transparency Initiative (EITI) Report in 2019 and the commencement of implementation of its recommendations to further enhance transparency in the extractive industry as well as the recent reestablishment of the Integrity Commission.
According to the IMF this reestablishment has reinvigorated compliance with the asset declaration regime.
The report noted that staff have encouraged authorities to make the asset declarations public and develop the methodology for their verification.
In public procurement, the staff welcomed the steps to enhance the transparency of the bidding process and awarding of contracts, but also encouraged the authorities to ensure timely compliance with existing regulations and take further actions to fortify the transparency of the procurement system.
Repeated mention was made of the “welcome step” embodied in the Natural Resources Fund (NRF) legislation but the report has recommended the legislation be expeditiously complemented with a fiscal responsibility framework to ensure that fiscal deficits are avoided.
“The NRF framework commendably aims to save part of the natural resource income as net wealth for future generations. To ensure this and to keep public debt from rising, a zero-overall balance rule which constrains the annual non-oil deficit to not exceed the expected transfer from the NRF is needed. This rule could be phased in over the next three years to allow a smooth widening of the non-oil deficit (in relation to non-oil GDP),” they advise.
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