The multilateral institutions recent demand for good governance came under fire yesterday, with China, India and several other developing countries saying the multilateral institutions should not cross their economic mandate and stray into political issues.
We are all opposed to corruption and we cannot allow countries to go the Kenya way. But the institutions cant tell member countries how to run their governments, a senior official from a developing country said.
Finance secretary Montek Singh Ahluwalia, representing India at the development committee meetings of the World Bank, said the Bank and the International Monetary Fund should proceed cautiously with their plans of considering the quality of governance and levels of corruption while appraising requests for loans by developing nations.
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On the other hand, Chinese finance minister Liu Zhongli said the country was willing to go along if the multilateral bodies adhered to three criteria. To begin with, the position of sovereign countries should be respected. Next, the demand for anti-corruption measures and good governance should not go beyond the economic mandates of the multilaterals. Finally, good governance should not be made an additional conditionality.
These views assumed significance in the light of the development committees endorsement of the good governance and anti-corruption clauses yesterday.
A communique issued by the World Bank said, The committee stressed the importance of a consistent and even-handed approach, as well as the need to take governance issues and corruption explicitly into account in lending and other decision-making when they significantly affect project or macroeconomic and country performance. The committee also asked the Bank and the Fund to report to the committee in a years time on the implementation of their respective strategies and guidelines.
Addressing the development committee yesterday, Ahluwalia maintained that India is committed to good governance and transparency.
It is, however, appropriate that both the World Bank and the IMF should proceed with caution in matters which are not directly within their mandate, he said.