Open look at city budgets more than just window-dressing in graft fight

Guangzhou sets strong example for other cities by releasing budgets for all government sectors

PUBLISHED : Saturday, 15 March, 2014, 5:09am
UPDATED : Saturday, 15 March, 2014, 5:55am

Many people appeared disappointed Premier Li Keqiang did not give details during his press conference at the National People's Congress about the corruption investigation into former security tsar Zhou Yongkang.

It seems everyone is eager for a formal confirmation of the inquiry, as if the potential downfall of one man represents an overall victory in the war against corruption.

Of course, it is important to crack down on corrupt officials, especially those at the top.

But if the government really wants a long-term solution to the problem it must pay more attention at the local level. A resilient system must come from the bottom up.

Shanghai has refused to release its spending figures, saying they are a state secret

In Guangzhou for instance, the municipal government has made all its accounts and budgets available to the municipal people's congress for the first time.

The city released details of some departmental budgets last year, but it has gone a step further by releasing details for all other areas of government finances, including social security spending.

To outsiders, the thicket of numbers makes little sense, but financial experts and members of the congress say they now have details about all the money available to the government in a fiscal year.

Some mainland media described the disclosure in more vivid terms. Guangzhou's government was now "naked", they said - every lawmaker could see exactly what was in the government's wallet.

Making government budgets public is standard practice in many countries, but such transparency is a new and challenging task for some authorities on the mainland, some of whom are more accustomed to covering their financial tracks than revealing them.

Guangzhou was one of the few city governments who took part in a pilot scheme to make their budgets public. They put details of 114 city departments budgets online in 2009, to wide enthusiasm among the public.

By contrast, Shanghai, supposedly one of the mainland's most financially progressive cities, refused requests by residents to release municipal spending figures, saying the information was a state secret.

As the first big city influenced by the reform-and-opening policies introduced in the late 1970s, Guangzhou has taken more than 35 years to reach today's level of transparency.

No doubt Guangzhou has a long way to go before it opens its entire budget to scrutiny by the public.

It is also unclear whether Beijing will encourage other local governments to follow Guangzhou's example.

But it's obvious the public can only benefit from such openness.

Reporters from Caixin, one of most respected financial media outlets on the mainland, examined the budget for state-owned companies. They found 10 out of 47 companies based in Guangzhou won't record a profit this year.

Caixin named the 10 businesses, which include Guangzhou Water Investment Group, and Guangzhou Iron and Steel Enterprise.

Obviously, this kind of information is valuable to analysts, investors and even jobseekers.

The arrest of senior corrupt officials often brings juicy stories of ill-gotten gains, money stashed away, opulent mansions and mistresses in tow.

The stories fascinate us, and it is understandable people prefer them to stodgy analysis of government spending.

If Zhou does stand trial for corruption, we can expect headlines around the world about the profligate and unchecked bureaucracy at the helm of the world's second largest economy.

But the reality is that much of the work of cracking down on corruption arises out administrative and legal measures.

Without these, the public is unlikely to ever have a clean and open government.