A/HRC/38/33 potentially large or the corruption may be symptomatic of a wider governance problem”.37 Recent examples of countries where IMF considered corruption to be “macro-critical” are Mozambique,38 where enormous loans made to State-owned enterprises were concealed,39 the Congo, where authorities recently announced plans to arrest corrupt officials in order to meet IMF loan conditions, 40 and Ukraine. 41 But in other States experiencing major corruption scandals, IMF has confined itself to general observations about the desirability of something being done. Such timidity contrasts with its strong measures to combat money laundering and the financing of terrorism,42 in relation to which it has provided technical assistance to 120 countries.43 23. IMF is currently in the midst of a major review designed to make its corruption policy more effective. 44 Challenges include the risk of becoming involved in politically charged debates and of not being perceived as “even-handed”,45 how to determine macrocriticality and what information sources to rely upon,46 and the need for specialized staff with appropriate expertise. While none of those issues is straightforward, failure to take a strong line on an issue such as large-scale or systemic corruption, which has major macroeconomic ramifications, leaves a large dent in the credibility of IMF.47 A stronger anti-corruption policy would also enable IMF to contribute to the realization of target 16.5 of the Sustainable Development Goals. 24. At IMF, military expenditure is an even more sensitive topic than corruption. However, despite the clear links between reigning in military spending on the one hand, and promoting fiscal consolidation while creating fiscal space for social protection on the other, 48 there is an almost complete absence of the subject from IMF macroeconomic analyses. This represents a major strike against its claims to be above politics and to go wherever the economic facts lead it. It is true that isolated examples of IMF engagement with military spending can be found, 49 and relevant military spending data are made available through its Government Financial Statistics Yearbook. But, in general, Governments still seem to believe that “national security, and judgments regarding the appropriate level of military expenditures required to assure that security, [are] a sovereign prerogative of national governments and ... not in the domain of the work of the Fund”.50 37 38 39 40 41 42 43 44 45 46 47 48 49 50 8 Ibid, p. 5. IMF, “Republic of Mozambique: 2017 Article IV Consultation” (March 2018). See www.bbc.com/news/world-africa-36158118. “IMF Staff Concludes Visit to The Republic of Congo”, press release (20 December 2017); and www.bloomberg.com/news/articles/2018-03-06/congo-steps-up-battle-against-corruption-after-imfcriticism. IMF, “Ukraine 2016 Article IV Consultation” (April 2017). See, e.g., IMF, “Malta: 2017 Article IV Consultation” (January 2018), para. 26. C. Lagarde, “Stepping up the Fight against Money Laundering and Terrorist Financing”, IMF blog (26 July 2017). Shortly before the present report was finally submitted, IMF published a new policy paper that devotes extensive attention to policy in relation to corruption. IMF “Review of 1997 Guidance Note on Governance” (April 2018). The content of the present report is not reflected in that analysis. C. Lagarde, “Corruption Disruption”, IMF blog (8 December 2017). In calling for stronger anti-corruption legislation in Ukraine, IMF relied on an opinion by the European Commission for Democracy through Law (the Venice Commission) on the draft law on anti-corruption courts, available at www.venice.coe.int/webforms/documents/ default.aspx?pdffile=CDL-AD(2017)020-e. The same might, of course, be said in relation to a failure to take account of large-scale human rights violations when they also have clear-cut macroeconomic consequences. I. Ortiz, M. Cummins and K. Karunanethy, “Fiscal Space for Social Protection and the SDGs: Options to Expand Social Investments in 187 Countries”, Extension of Social Security Working Paper No. 48 (2017). Available at www.social-protection.org/gimi/RessourcePDF.action? ressource.ressourceId=51537. S. Gupta, L. De Mello and R. Sharan, “Corruption and Military Spending”, IMF Working Paper (2000); J. Stevenson, “IFIs and military expenditures”, in Adelphi Papers (vol. 40, iss. 336), p. 29 (2000); and H. Davoodi et al, “Military Spending, the Peace Dividend, and Fiscal Adjustment”, IMF Staff Papers (vol. 48, No. 2), p. 290 (2001). See www.imf.org/external/SelectedDecisions/Description.aspx?decision=EBM/91/138.