The global economic order has undergone a sea change over the last 50 years, with the less developed countries now claiming their rightful place under the sun. As these countries realised the need to establish their presence in the global hierarchy, build trading relations with other countries and seek the support of multi-lateral organisations, they had to let go of their old and lax methods of recording financial transactions, budgeting, and so on.

Multilateral agencies have played a large role in providing assistance to such countries in identifying the gaps in their fiscal management and finding the solutions to fix them. Subra Ramamurthy, who travelled across many such countries as part of the Commonwealth Fund for Technical Cooperation (CFTC), the United Nations, Asian Development Bank, World Bank, African Development Band and the IMF’s Fiscal Affairs Department, in a bid to find such solutions, recounts his experiences in the book, Pursuing Financial Reforms Across Countries: Perils, Stresses and Rewards (₹499; Notion Press). The writer was on IMF’s contract from 1991 until 2015, when he served as a resident adviser in many countries. He weaves his observations regarding each country’s fiscal processes with personal anecdotes about the experiences that he and his family had in these strange and exotic countries, lending colour to the narrative. The background information on each country’s geography and history can help the younger readers appreciate the progress made by these countries over the last 50 years.

Fiscal mismanagement

It is easy to relate the observations made in the book regarding the issues that existed in many of the under-developed countries a few decades ago, to the current conditions and corrupt practices in India.

For instance, this episode will sound quite familiar to Indians. “The lack of close oversight… was exploited by an Italian firm that won a contract to build a road from DaresSalam to Morogoro, a town on the way to Zambia. It was a lump sum contract of about $80 million with a defined time limit for completion, interim payments and a final payment on the satisfactory conclusion. “The regional government engineers sent monthly reports to the Public Works Department (PWD) headquarters on the work progress, quantifying items of work against the contracted program and highlighting the huge performance shortfall… The PWD department, ignoring the reports from the regional engineers, released the payments to the contractor…based on the overriding clearance as provided by the engineer-in-chief, despite objections by the United Nations engineering adviser working at the headquarters.”

Since many of the third-world nations were strife-torn in the early part of twentieth century, the fiscal management was in a shambles, accounting was chaotic, leading to lack of transparency and difficulties in judging the governments’ surpluses. “The practice in Namibia was to allow Ministries like defense to draw down their budget allocations from the finance account at the central bank and keep the cash in private banks, earning a small interest and using it to supplement their budget resources. This created stress on government liquidity at the central bank, requiring the government to borrow and pay higher interest to lenders.”

At a personal level

The personal experiences of the writer and his family also make for interesting reading and help highlight the dangers and difficulties that travelling diplomats face. “Once (in Nairobi) I was walking back with my wife and kids to my hotel after shopping and I realized I was being followed by four thugs, keeping in step with me and blocking others from coming between us…” The writer asked his wife to cross the road with the kids and kept walking. Once he reached a place where few others were present, he turned around and confronted the thugs. Thankfully, he came to no harm in the incident.

In another anecdote regarding the daily commute between Jerusalem and Gaza, he writes, “The cab taking me from Jerusalem would stop at the check post at the Israeli border, which would stamp the exit on a sheet of paper to be attached to my passport: then I had to proceed on foot to the Palestinian check-post and take another cab from there to Gaza. On return, I had to take two cabs again and the Israeli check-post would stamp entry after a thorough check for any hidden explosives before I moved on to Jerusalem.”

An interesting collection of notations from the diary of a travelling diplomat.

BL Review

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