How can citizens ensure money flows to where it is needed most: the fight against poverty?

Tuesday, 20 January 2015 12:26 GMT

Village women work at a dry pond under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), an anti-poverty plan that provides 100 days of employment every year to tens of millions of rural poor, in Vastara village on the outskirts of Kolkata February 11, 2014. REUTERS/Ahmad Masood

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This year, three global summits could reshape the fortunes of millions of people living in poverty

This week Follow the Money activists from around the world gather in Berlin to figure out how to translate the campaign for more and better information into policy changes that improve people’s lives. No small challenge, but this work is critical - not least because the opportunities for international action on transparency are unique in 2015.

This year, three global summits on finance, the Sustainable Development Goals and Climate Change, could reshape the fortunes of millions of people living in poverty, injecting new energy, ideas and cash into efforts to end extreme poverty, end preventable disease and ensure sustainability for the environment.

But these grand summits will mean little for the world’s poorest and most marginalised people without the information necessary to allow governments to invest resources effectively, and enable citizens to track where the money is going. Pumping more money into inefficient systems that allow for money to be siphoned off to corruption is not the answer.

A dream of the world’s poorest people brandishing smart phones, collecting information with which they criticise governments might sound utopian. Perhaps more so, the idea that some government might be open to listening and changing their behaviour even more far-fetched.

But let’s reflect for a moment. For despite the significant steps needed to fulfil this dream, the steady drumbeat of progress last year should give us confidence. 2014 saw hundreds of new transparency and accountability commitments and at least 35 positive policy changes. Here are just a few:      

Transparency in the Extractives Industry

One third of the world’s poorest billion people live in countries rich in natural resources. But all too often that money fuels conflict or lines the pockets of corrupt leaders.

The Open Government Partnership garnered 60 new commitments to make natural resources more transparent, accountable, audited, published, and participatory. New laws in the UK and Canada compelled oil, gas, mining and logging companies to publish details of the payments they make to governments across the world. In Myanmar, 25 oil and gas companies set a global precedent by publishing who their real owners are.

Government contracts

Government procurement worldwide is worth approximately $9.5 trillion a year.  Even if a small proportion of this money is lost to corruption, solving this problem could unlock billions for development.

41 countries made commitments around public procurement at the Open Government Partnership. Canada, Colombia, Costa Rica, Paraguay, UK, Mexico committed to the Open Contracting Data Standard alongside two cities: Montréal and Mexico City.

Tax evasion and money laundering

Some suggest that developing countries are haemorrhaging billions due to corrupt flows of money across borders.

In 2014, 27 countries agreed to Beneficial Ownership registers cracking down on secretive anonymous companies (the favoured channel of money launderers) through new rules in the European Union’s Anti-Money Laundering Directive. Denmark, France and Ukraine committed to make this information public (the UK was the first to do so in 2013) while the G20 endorsed a set of principles calling for progress on public registers.

India created a task force to investigate offshore accounts, Kenya announced plans to end corporate tax holidays that cost its economy over a billion dollars annually, and 20 countries endorsed the OECD’s automatic information exchange standard to close in on tax evaders.

Budgets

2014 saw 85 new Open Government Partnership commitments on budget transparency. Seven commitments included social audits, allowing the public to review whether reported expenditures match the disbursement of government funds. Niger, Senegal, Sierra Leone, Ivory Coast, Egypt, Kenya, Fiji, Ecuador, all produced budget reports never before published. At the international level, the International Monetary Fund announced a revised Code on Good Practices on Fiscal Transparency, enshrining a new principle on public participation in budgeting.

Building on 2014 – ambition for 2015

These are impressive achievements. But we can’t be complacent. Assuming this information alone will lead to policy change is a fool’s game. We need to communicate the information and figure out the ways in which it can be used to improve policies and stimulate demand for better decision, public services, and ultimately, the life chances of people.

So in 2015, the Follow the Money network will embark on an ambitious plan of action:

  • We will gather examples of Follow the Money initiatives which can be used for research, advocacy, and learning, as well as mapping existing initiatives.
  • We will provide spaces for helping the ‘doers’ in the development, open data and accountability communities to ‘learn as they go’, especially by drawing on each other’s’ knowledge.
  • We will road test technical data standards with a view to recommending to governments, businesses and donors.
  • And we will continue to campaign for transparency in international policy processes, ensuring that relevant legislation is technically robust; and push for increased investments in research on transparency and accountability.

By the end of this week we will have a detailed action plan. If you care about ensuring that nutrition finance, commitments to address Ebola, or support to small holder farmers gets to those who need it most, please join the conversation at #FTMNetwork or www.followthemoney.net

Dr David McNair is Director of Transparency and Accountability at the ONE Campaign

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How can citizens ensure money flows to where it is needed most: the fight against poverty?

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