IMF SAYS POOR GOVERNANCE OFFERS GREATER INCENTIVES AND MORE OPPORTUNITIES FOR CORRUPTION

Corruption in St Kitts and Nevis by SCHEME Unity
Corruption in St Kitts and Nevis by SCHEME Unity

Washington, D.C, USA, November 12, 2018 – The Washington-based International Monetary Fund (IMF), in which St. Kitts and Nevis has membership, is placing great emphasis on promoting good governance when providing policy advice, financial support, and technical assistance to its member countries.

The IMF said it also has measures in place to ensure integrity, impartiality, and honesty in the discharge of its own professional obligations, pointing out that good governance is key to economic success.

“Governance is a broad concept covering all aspects of how a country is governed, including its economic policies, regulatory framework, and adherence to rule of law,” said the IMF.

The IMF said: “Poor governance offers greater incentives and more opportunities for corruption – the abuse of public office for private gain. Corruption undermines the public’s trust in its government. It also threatens market integrity, distorts competition, and endangers economic development. Because poor governance is clearly detrimental to economic activity and welfare, the IMF adopted in 1997 a policy on how to address economic governance, embodied in the Guidance Note “The Role of the IMF in Governance Issues.”

The IMF said it recognizes that there is significant scope to strengthen its engagement with St. Kitts-Nevis government in the area of corruption, given its pernicious impact on economic performance in that country.

“A follow-up paper will discuss frameworks to assess the severity of governance vulnerabilities and their macroeconomic impact, and guide policy advice in circumstances where corruption is sufficiently problematic to justify Fund engagement,” the IMF said.

The IMF said it also works with its member countries to promote good governance and combat corruption.

The Washington, DC-based international financial institution said its surveillance involves annual reviews of countries’ economic policies, carried out through Article IV consultations.

It stated that in the process, staff may advise on reforms contributing to good governance and discuss economic consequences arising from poor governance.

“Good governance is also promoted via IMF-supported lending. When warranted, specific measures to strengthen governance may become part of the programme’s conditionality. Many of the structural conditions in IMF-supported programmes focus on improving governance, including through better public expenditure control, publication of audited accounts of government agencies and state enterprises, streamlined and less discretionary revenue administration, greater transparency in the management of natural resources, the publication of audited central bank accounts, and better enforcement of banking supervision.

The IMF posted on its Website late last month that the authorities in St. Kitts and Nevis, led by Prime Minister and Minister of Finance, Dr. the Hon. Timothy Harris has blocked the publication of the Article IV Consultation on St. Kitts and Nevis.

An IMF Mission visited St. Kitts and Nevis late June/early late July 2018.

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