Answering the call of fiscal transparency means progress in spite of challenges

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 certain 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, the Emirates has taken such measures on fiscal transparency that the Emirates was removed from the European Union's list of Uncooperative Tax Havens in January of 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 leagues 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 there needs to be systematic reforms clearly in place.

Obviously, the challenge is to continue to build on this momentum and sustain the implementation of reforms.

We must achieve the fiscal targets we have set and resist the urge to re-expand government due to the rise of oil prices. And, as our laws and legal system is updated, we must continue to strive for transparency at all levels, including businesses, through licensing and regulations.

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And to do this we must invite dialogue with leading thought leaders on these issues and examine the “best practices” other countries and regions have pursued in these endeavours.

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 therefore strengthen the region through capacity building and the advocacy of sound governance practices.

How important is this digital revolution to fiscal transparency?

Well, a paper published in the 2011 World Bank Economic Review states 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 therefore diminish the opportunity by those intermediaries for a corrupt act.

Second, electronic services make for a more transparent monitoring system of standardised rules and procedures than paper or face-to-face transactions.

The UAE has been at the forefront at establishing this new technology for use at the governmental level. Their 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 includes sub-categories for mobile access as well as forums, blogs, chats and surveys where people can interact, ask questions and receive answers.

And the UAE’s “Open Data” makes information on economic data and population statistics easily accessible over the web.

It is this type of dialogue and “best practices” sharing that the GCC BDI hope 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 not-for-profit that guides board directors to achieve effective corporate governance.