A report released today by the U.S. Department of State shows that the governments of more than half of the countries receiving U.S. foreign assistance meet minimum standards of fiscal transparency.
“Countries are, in general, making progress toward transparency despite the COVID-19 pandemic,” said Claire Duffett Thomas, a State Department official.
To achieve a passing mark, foreign governments must maintain complete and reliable budget documents and make them accessible to the public. They must also award licenses and contracts for natural-resource extraction in a transparent manner.
By promoting transparent budgets through this annual review, the United States helps citizens to hold their governments accountable and ensures U.S. foreign aid is spent appropriately.
The report’s review period started January 1, 2020, and ended December 31. The rankings, completed in consultation with foreign governments and international and civic organizations, have been a State Department mainstay since 2012.
All told, 74 of the 141 governments assessed met basic transparency benchmarks, according to the State Department’s 2021 Fiscal Transparency Report. What’s more, two governments — Nigeria and The Gambia — met the minimum requirements for the first time.
The report says 67 governments did not meet the requirements. But among them, 17 — three more than last year — made significant strides: Algeria, Angola, Bahrain, Benin, Burundi, Cambodia, Democratic Republic of the Congo, Ecuador, Equatorial Guinea, Gabon, Guinea, Maldives, Mozambique, Sao Tome and Principe, Somalia, Sudan and Uzbekistan.
The U.S. Congress mandates this annual review of countries’ budget practices and also requires a regular strengthening of the transparency benchmarks themselves.
In 2021, for example, the State Department required that countries audit institutions to meet international standards for independence. It also asked governments to disclose state-owned enterprise debt and the source of funding and general approach to withdrawals for sovereign wealth funds.
“Even with enhanced requirements, the overall ratio of countries meeting minimum requirements is mostly unchanged,” said Thomas, noting that this bodes well given the economic pressures brought on by the pandemic.
U.S. embassies and consulates will follow up on the report by encouraging governments to address any insufficiencies. (The report offers detailed suggestions for doing so.)
Furthermore, through its Fiscal Transparency Innovation Fund, the United States is taking steps in 2021 to support transparency projects in the following countries: Algeria, Bahrain, Bangladesh, Democratic Republic of the Congo, Equatorial Guinea, Guyana, Haiti, Iraq, Malawi, Niger, Nigeria, Rwanda, South Sudan, Suriname, Tajikistan and Zambia.
“Fiscal transparency fights corruption, fraud and waste, and it facilitates economic growth,” Thomas said.