The graft-busting uses of COVID-19 aid
With only a tenth of the world’s population, Latin America has seen more than a third of the deaths from COVID-19. This has put a spotlight on the region’s inability to curb the coronavirus or deal with the economic hardship. Experts say per capita income in Latin America will take longer than any other region to return to pre-pandemic levels.
The economic climb back, however, will require more than money. Outside creditors have put the region on notice that any aid to lift livelihoods must also lift financial integrity in government. Corruption cannot remain the norm.
In June, for example, Guatemala received $594 million from the International Monetary Fund for emergency assistance – but only after the country’s leaders agreed to use the money “effectively, transparently, and through reinforced governance mechanisms.” Guatemala is not alone. So far this year, the IMF has disbursed $17 billion to Africa, or more than 10 times than usual. The aid comes with a string attached requiring transparency in spending the money.
A similar amount of funding has gone to 14 Middle East nations but only after assurances that they fight corruption. In all, the IMF has provided about $100 billion of emergency funds to more than 80 countries to help them cope with the pandemic’s fallout.
As one of the world’s most corrupt countries, Guatemala is a good case for outside pressure. From 2006 to 2019, it was a global example in how to fight corruption. An activist attorney general and a United Nations-backed commission against impunity were able to oust a corrupt president and dismantle some 60 criminal structures. But the effort fell apart when a new president, Jimmy Morales, came under investigation himself. Last year he eliminated the commission and forced the attorney general, Thelma Aldana, into exile.
Now a rise in corruption there has irked the Trump administration, which had largely ignored President Morales’ takedown of the anti-graft efforts. Last month, it took action against the vice president of the country’s Congress and a former congresswoman by suspending their access to the United States. The two political figures had “undermined the rule of law in Guatemala,” said U.S. Secretary of State Mike Pompeo.
“These designations reaffirm the commitment of the United States to combating corruption in Guatemala. We stand with the Guatemalan people in this fight,” said Mr. Pompeo’s statement.
The pandemic has worsened corruption in many countries, especially through embezzlement of money aimed at fighting the virus and restoring economic health. But big creditors like the IMF and aid-giving nations like the U.S. can step up and tie their money to curbing graft. Honesty in governance contributes to curing COVID-19 and its impact as much as lockdowns, vaccines, and financial aid.
