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Transparency supreme
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Against hundreds of lobbyists from local governments for a share of the $586 billion central government stimulus package, he is too lonely.

But compared with their investment plans, his appeal for transparency of the entire process of how decisions are made for investment in every single project makes more sense in the interest of the public.

Yan Yiming, a lawyer from Shanghai, traveled alone to Beijing in January to submit his application to the Ministry of Finance and the National Development and Reform Commission.

He asked for disclosure of details about every single sum of investment from this package so that the money would be used in a fair and efficient manner.

No State department has any reason to keep any government investment project a secret from the public when their money is to be used for their benefit. There should be no exception for this bailout package, which is intended to stimulate the country's economic growth and create more jobs.

The more money the central government invests in local projects, the more chances there are for corruption.

When the Asian financial crisis struck in 1997 and 1998, the central government's stimulus package of 1 trillion yuan did help the country out of economic difficulties. But dozens of officials were caught for having made illegal gains from it.

It has been a traditional practice for a local government to get funding from the central government for infrastructural projects.

Such a model does have the potential to efficiently channeling money down to local projects. But fairness and effectiveness could be compromised if there is no proper supervision over decision-making concerning where the money is to go and how the money is spent.

The fact that many local authorities organized teams to lobby for investment suggests that efforts a local government makes in lobbying make a difference in getting its projects approved.

In such circumstances, transparency can make the system work better. And effective supervision will also help improve the mechanism.

Once a local project is approved, it may not be possible for central authorities to monitor how the money is spent. But the monitoring is necessary to prevent corruption.

The lawyer's plea for transparency throughout the entire process from the approval of an investment project to the use of the money therefore makes a lot of sense.

Whether the US$586 billion will be put in right places and spent in a fair and efficient way will have a bearing on the development of the country's economy. What the lawyer suggests therefore deserves serious consideration before any of the investment projects submitted by local governments is discussed.

It is some comfort that a cross-department supervisory group has been established to oversee the implementation of the package.

Yet, it cannot do without transparency.

(China Daily February 5, 2009)

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