Debbie Prasad, MAAPPS // Jan 25, 2015
According to a study conducted European Research Centre for Anti-Corruption and State-Building, some reasons why corrupt countries join the EITI are “because they are concerned about international donors and expect to be rewarded by increase aid”
A country comparison between Mongolia and Myanmar using Transparency international shows that Mongolia holds a rating of 39/100 while Myanmar stands at 21/100. The ratings uses a scorning guide of 0-100 in which 0 is the most corrupt and 100 is corruption free; both countries appear to be quite high on the corruption scale
There is arguably a link between corruption and its negative impact on economic growth. The more corrupt a country is, the less benefits their economy will reap. Since the Mongolia’s initial entry into the EITI in 2006, their GDP has shown steady growth. In 2006, their GDP was 3.4 billion USD and in 2014, their GDP was 11.7 USD. Perhaps, it can be said that the implementation of the EITI has been a positive factor in increasing transparency in resource extraction, and concurrently reducing corruption, attributing to economic growth.
In the case of Myanmar, which has recently sought entry into the EITI, it remains to be seen if the EITI will have a positive impact on reducing corruption and resultantly improving their GDP. Recently, Myanmar has been taking major steps to improve their economy through a new anti-corruption law, and also by requesting a World Bank Public Expenditure and Financial Accountability Assessment in 2013. The report recommended, among various other remedies, a need for more transparency and organized form of reporting in order to eliminate budgetary discrepancies.
According to the EITI, Mongolia, since it’s membership. has had a high level of transparency with their reporting. Company payments seem to equally match government revenues. Mongolia’s implementation of the EITI supports the idea that they have joined the EITI with the intention of improving their economy through sound implementation of transparency, rather than merely paying lip service to the EITI and using membership as a means to get foreign aid.
Currently, it appears that Myanmar may follow the Mongolian path in their entry into the EITI. Their changes in legislation in terms of new mining and anti corruption laws, and also requests of assessment from the World Bank give evidence of their willingness to join the EITI not just to receive foreign aid, and better their reputation in the international community, but rather, to follow the prescribed methods of transparency in order to improve their resource economy. Contrary to the study conducted by the European Research Centre for Anti-Corruption, it can be argued that both Mongolia and Myanmar, (who are seen to have corruption problems) are on their way to economic growth through self sufficiency from their resource extraction industry, rather than joining the EITI merely for foreign aid.
Sources:
http://www.worldbank.org/en/country/myanmar/publication/myanmar-economic-monitor-october-2013
Liz David-Barrett and Ken Okamura ”The Transparency Paradox:
Why do Corrupt Countries Join EITI? Working Paper No.38.
European Research Centre for Anti-Corruption and State-Building. November 2013.
www.transparencyinternational.org