US finds fiscal transparency lacking across much of Middle East

Fiscal transparency remains lacking across much of the Middle East, according to the U.S. State Department’s annual report, which was released on Tuesday.

The congressionally mandated report evaluates whether governments publicly disclose key information about their budgets, revenues, debt, audits and procurement. The State Department describes fiscal transparency as essential to market confidence and economic growth and says the report is “a tool to identify deficiencies and support needed changes” in how “government and tax revenues are spent,” as transparency “underpins market confidence and growth.

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Of the 140 governments and entities evaluated, 73 met the report’s minimum transparency requirements, including Israel and Jordan. Bahrain, Egypt, Iraq, Oman, the Palestinian Authority, Saudi Arabia and Yemen did not meet the requirements and made no significant progress toward doing so. Lebanon did not meet the minimum requirements but made significant progress.

The report faulted the Palestinian Authority for failing to publish an executive budget proposal and for not having its enacted budget approved by the legislature. It also cited incomplete information about debt obligations and said Ramallah’s supreme audit institution lacked sufficient independence and did not audit the government’s entire annual budget. Similar shortcomings have been cited in previous State Department assessments.

Beirut, meanwhile, was credited with reviewing its budget during the fiscal year and providing a breakdown of expenditures by ministry, executive offices, military and intelligence budgets.

The State Department recommended further improvements, including revised budget estimates for areas previously lacking transparency, greater disclosure about state-owned enterprises and public procurement contracts and stronger safeguards for audits, including audits of off-budget accounts.

“Transparent budgets and procurement processes level the playing field for American businesses competing abroad,” the State Department said, “particularly in frequently non-transparent sectors like energy and critical minerals.”

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