The International Monetary Fund (IMF) has been soliciting input and comments on revisions to its Code of Good Practice on Fiscal Transparency and associated documents such as the IMF Guide on Resource Revenue Transparency. These documents are part of the IMF's guidance on fiscal transparency to its member countries as well as providers of technical assistance and civil society groups. RWI views both the code and the guide as important tools in promoting transparency and welcomed the opportunity to comment and participate, along with other civil society organizations, in a conference call earlier this week with the IMF.
The IMF was one of the first international financial institutions to support transparency in the extractive sector. Specifically, the guide’s endorsement of the disclosure of resource revenues and contracts made it an influential guidepost for international efforts promoting greater transparency. But the IMF’s leadership can only endure if the guide is both kept up-to-date with evolving international practice and if the institution does a better job of integrating the guide’s content and recommendations into its work with member countries.
Our three categories of recommendations for the IMF are as follows:
I. The guide should remain a stand-alone document at the core of the IMF’s guidance on resource transparency. The importance of transparency in overcoming the challenges of resource governance has not subsided, and the guide should continue to play an important role.
II. The guide, which was last updated in 2007, should reflect evolution of good practices in the field, including the adoption of mandatory disclosure rules (i.e. Section 1504 of Dodd-Frank and similar European rules in the works), the emergence of project-by-project disclosures as good practice and the evolution of EITI (Extractive Industries Transparency Initiative) towards a better standard.
III. The guide’s content and recommendations should be more directly integrated into IMF functions. Specifically, the IMF needs to make a significant improvement in producing assessments of country practice in fulfilling the guide’s principles of resource transparency.
While all of the recommendations above are important, the guide’s impact will only really increase if the IMF succeeds in addressing the last recommendation and integrates the guide’s principles into the institution’s functions. Simply put, the story of the IMF’s use of the guide to date seems to be one of “too little of a good thing.” The IMF has not sufficiently used its interactions with resource-rich countries to promote the guide’s principles and assess their implementation by individual nations. The IMF should make systematic and public assessments of country practice against the guide’s contents a mandatory part of its programs in resource-rich countries. The IMF should commit resources to doing a better job of incorporating the guide’s recommendations into its technical assistance programs. Finally, the IMF can improve in using the disclosures promoted by the guide to collect, analyze and release data for public use and research, including through the disclosure of more resource revenue data in the World Economic Outlook and other IMF publications.
We look forward to continuing to work with the IMF and interested civil society organizations to ensure the Guide remains a relevant and useful tool in the promotion of good governance of natural resources.
Amir Shafaie Is RWI legal analyst.
