IMF loans and failure to promote anti-corruption

IMF loans and failure to promote anti-corruption

IMF loans and failure to promote anti-corruption

Written by Keshala Dias

10 May, 2018 | 1:51 am

COLOMBO (News 1st) – In the wake of a major bribery and corruption scandal involving two public officials, News 1st wrote to the International Monetary Fund (IMF) to query whether they consider anti-corruption efforts as a benchmark for loans.

The Executive Board of the IMF approved a three-year USD 1.5 billion extended fund arrangement to support the government’s economic reform agenda. The reforms aimed to reduce fiscal deficit, rebuild foreign exchange reserves and introduce a simpler and more equitable tax system.

Since the loan facility was approved, the IMF has been regularly reviewing the government’s progress on economic reforms and tying these reforms to the delivery of its loan installments. According to the IMF, the member country has the primary responsibility for selecting, designing, and implementing the policies that will make the IMF-supported programme successful.

Though the IMF has a policy for dealing with corruption, dating back to 1997, which they say is backed up with concrete and specific policy advice, when News 1st questioned the IMF as to why they didn’t consider getting the government to comply with a zero-tolerance policy against corruption, the IMF responded by saying that they “address issues of governance in its broader analysis of the economic situation”.

According to media reports, corruption has cost Sri Lanka 2% of its GDP in 2012. In a backdrop of widespread bribery and corruption that has plagued Sri Lanka, shouldn’t the IMF be benchmarking anti-corruption efforts when approving loans to the Government of Sri Lanka?

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