Fis­cal trans­parency and the dig­i­tal revo­lu­tion

The National - News - - BUSINESS IN DEPTH - MO­HAMMED AL SHROOGI Com­ment

The ben­e­fits of fis­cal trans­parency are well known. First, trans­par­ent pub­lic fis­cal fi­nances are far less prone to cor­rup­tion and can lead to eco­nomic growth and eco­nomic sta­bil­ity, par­tic­u­larly through in­creased for­eign in­vest­ment.

This can then have the knock-on ef­fect of cre­at­ing jobs and spurring in­no­va­tion.

The Arab world is fac­ing chal­lenges as we adopt poli­cies of fis­cal trans­parency, ev­ery­thing from le­gal and po­lit­i­cal re­stric­tions to lack of bud­get doc­u­ments made pub­lic to ef­fec­tive over­sight and ac­count­abil­ity.

But we are an­swer­ing the call.

A re­cent story pointed out that Egypt’s new trans­parency and dis­clo­sure frame­works has re­sulted in the coun­try’s bud­get trans­parency score jump­ing from 16 to 41 points out of 100 on the Open Bud­get Sur­vey, which is near the global av­er­age.

Tu­nisia has en­acted a “fis­cal trans­parency por­tal” that pro­vides a sin­gle-ac­cess point for all fi­nan­cial in­for­ma­tion on­line. A “cit­i­zens’ bud­get” has been pub­lished in Morocco ev­ery year since 2011, and Jor­dan has pur­sued re­forms and anti-cor­rup­tion strate­gies that in­clude trans­parency com­mit­ments

In line with goals stated in UAE Vi­sion 2021, suf­fi­cient mea­sures on fis­cal trans­parency were taken to have the Emi­rates re­moved from the Euro­pean Union’s list of unco-op­er­a­tive tax havens in Jan­uary this year.

The Her­itage Foun­da­tion in 2017 gave Saudi Ara­bia a score of 47 per cent on the “govern­ment in­tegrity” sub-in­di­ca­tor. The world av­er­age is 40 per cent.

That does not mean we are sat­is­fied. We know we still have some dis­tance to go. With cen­tral bankers in the United States and Euro­pean Union tight­en­ing their wal­lets and the flow of fund­ing from cap­i­tal mar­kets slow­ing, to at­tract out­side in­vestors to Saudi Ara­bia sys­tem­atic re­forms need to be in place.

The chal­lenge is to con­tinue to build on this mo­men­tum. We must re­sist the urge to re-ex­pand govern­ment due to the rise of oil prices. And, as our laws and le­gal sys­tem are up­dated, we must strive for trans­parency at all lev­els.

This is why the GCC Board of Di­rec­tors In­sti­tute was founded in 2007. It is our goal to seek the high­est pro­fes­sional stan­dards of cor­po­rate gov­er­nance and strengthen the re­gion through build­ing ca­pac­ity and sound gov­er­nance prac­tices.

How im­por­tant is this dig­i­tal revo­lu­tion to fis­cal trans­parency?

A pa­per pub­lished in the 2011 World Bank Eco­nomic Re­view states that mov­ing to an elec­tronic form of govern­ment ser­vices can be an ef­fec­tive tool in anti-cor­rup­tion for a cou­ple of rea­sons.

First, elec­tronic ser­vices can re­duce the dis­tance be­tween a govern­ment and its pub­lic by removing the “mid­dle man” – the civil ser­vant – and di­min­ish the op­por­tu­nity for cor­rupt prac­tices.

Sec­ond, elec­tronic ser­vices make for a more trans­par­ent mon­i­tor­ing sys­tem of stan­dard­ised rules and pro­ce­dures than pa­per or face-to­face trans­ac­tions. The UAE has been at the fore­front at es­tab­lish­ing this new tech­nol­ogy at govern­ment level.

The eGovern­ment pro­gramme was a key part of the UAE’s Govern­ment Strat­egy 2011-13 and has laid the foun­da­tion for UAE Vi­sion 2021. The ser­vices are bro­ken into three cat­e­gories – in­di­vid­ual, busi­ness and vis­i­tor – and in­clude sub-cat­e­gories for mo­bile ac­cess as well as fo­rums, blogs and chats where peo­ple can in­ter­act.

These types of di­a­logue as are what the GCC BDI hopes to be en­gaged in at our sixth chair­man’s sum­mit as we seek the so­lu­tions that will en­able us to reach our goals.

Mo­hammed Al Shroogi is chair­man of the GCC Board Di­rec­tors In­sti­tute, a not­for-profit that guides board di­rec­tors to achieve ef­fec­tive cor­po­rate gov­er­nance

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