US finds fiscal transparency lacking across much of Middle East

Fiscal transparency remains inadequate across much of the Middle East, according to a State Department report released this week. The congressionally mandated assessment evaluates whether governments publicly disclose information about budgets, revenues, debt, audits and procurement, which the department says underpins market confidence and economic growth.

Of 140 governments and entities evaluated, 73 met minimum transparency standards. Israel and Jordan achieved the threshold, while Bahrain, Egypt, Iraq, Oman, the Palestinian Authority, Saudi Arabia and Yemen fell short with no significant progress recorded. Lebanon did not meet requirements but demonstrated meaningful improvement.

The Palestinian Authority faced criticism for failing to publish an executive budget proposal and obtain legislative approval of its enacted budget. The report also noted incomplete debt disclosure and said the supreme audit institution lacked sufficient independence and did not conduct full audits of annual government spending. Lebanon received credit for reviewing its budget and providing ministry-level expenditure breakdowns.

The State Department recommended additional steps, including updated budget estimates for previously opaque areas, expanded disclosure of state-owned enterprises and public procurement contracts, and stronger audit safeguards for off-budget accounts.

The department stated that "transparent budgets and procurement processes level the playing field for American businesses competing abroad, particularly in frequently non-transparent sectors like energy and critical minerals."