NGOs and business clash on transparency

19/03/2007 | Lucien Chauvin

Business leaders and civil society groups yesterday offered visitors to the IDB meeting diametrically opposed views on how to improve transparency in governments and companies.

Vince McElhinny, Latin America programme manager at the Bank Information Center, said that some progress has been made on transparency, but that much more has to be done. “We can talk about transparency, but many countries still have laws that do not allow citizens access to basic information,” he said.

In Guatemala, he said, there is a constitutional norm preventing the tax agency from reporting on the amount of taxes paid by companies and corporations. “With laws like these, you can’t talk about transparency.”

On the corporate side, Julio Lastres, senior managing director for the Americas at Darby Overseas Investment, said that transparency “is growing by leaps and bounds.” He said companies are becoming more open by the day, adopting best practices that not only promote transparency but protect investors.

The Institute of International Finance (IIF) also took a much more positive view of recent changes. “There are countries such as Brazil and Mexico that have made important progress. This is very important, because a lack of transparency has hurt them [in the past],” IIF chief economist Yusuke Horiguchi told Emerging Markets.

The IIF this month published a ranking of data transparency in the region. The investor relations office in Brazil’s Central Bank helped the country to become the first to score 38 out of 38 in the ranking, which includes categories such as macroeconomic data presented in a market-friendly format, and providing for investor feedback.

Other high scorers are Mexico, with 34, and Peru, with 32. The lowest score was for the Dominican Republic, with 2, and Ecuador, with 4.

Julio Velarde, president of Peru’s Central Bank, said transparency is an ingredient in maintaining sustained growth regionally. “Markets react positively when a central bank is open with its data and provides information as rapidly and accurately as possible,” he said.

Peru’s Central Bank publishes the amount of dollars it purchases on the market not on a weekly or monthly basis, but every day at 2 pm.

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