Nathaniel
Global Integrity's Sebastian Sanga writes from Tanzania with a review of last year's electrical power crisis, and the political powers that let it happen. The report, in the words of a peer reviewer, "gives a vivid picture of the gravity of the corruption cankerworm in Tanzania."
Tanzania: The Influence Grid
By Sebastian Sanga
Image: Dar Es Salaam (Julienne/Flickr)
My mind reels whenever I think of the electricity crisis that plagues Tanzania. The nights are the worst: Frequent outages enable thieves and bandits to ply their trade, terrorizing the citizens. The risk of deadly fires is high as people opt for candles and oil lamps to light their houses.
Rolling blackouts are now the rule rather than the exception. In the process, many industrial and domestic appliances are damaged. Fires are rampant in many areas of the city. And there is little hope of lasting change — because of the problem of corruption.
Across the country, the air is thick with fumes from generators. The hum of their motors is heard everywhere in the cities and towns. The pollution is compounded by the smoke that emanates from thousands and thousands of chimneys and windows, as firewood and charcoal have replaced electricity for domestic use. And 99 percent of the rural population — nearly 28 million people — have no access to electricity at all.
This causes unprecedented deforestation rates, with over 91,000 acres of forests vanishing annually due to the voracious demand for firewood. Wood biomass accounts for 90 percent of total energy consumption. Meanwhile, the imposition of strict rules on charcoal businesses — originally put in place for environmental reasons — prove nearly impossible to enforce, due to the lack of alternative sources of power. Instead, the price of charcoal keeps rising, affecting the standard of living of the majority of ordinary Tanzanians. A bag of charcoal now sells for 25,000 shillings (US$20.04) — a considerable burden on low income earners.
Power outages have a variety of spillover effects. For instance, water crises in Dar es Salaam are endemic due to the electricity required to keep the city's water pumps operating. Residents often are forced to drink water from unhygienic sources, leading to deadly cases of diarrhea and other diseases.
The poor are hardest hit. Meanwhile, the powerful are capitalizing on the tragedy to accumulate wealth with which to contract defective and controversial power projects. Meanwhile, the lack of rainfall reduced electricity production at the hydroelectric plants from their installed capacity of 650 megawatts to as low as 200.
To counter the crisis, the government tried various strategies, including signing contracts to lease gas turbines from, among others, the U.S.-based Richmond Development Co. (RDC). The government planned to lease a 100-megawatt power plant, for US$172 million. Construction was planned for December of 2006 at the latest. The contract, unfortunately, was a scam. RDC turned out to be a "mailbox company" that had no record of credentials in the United States. Mohammed Hugue, an economist from Pakistan, and a Tanzanian-born businessman, Mohamed Gire, were behind the project.
Investigations revealed that RDC had links to a number of powerful local interests but had no experience or capacity in the energy sector. Furthermore, there were other allegations that Mohamed Gire had improperly leveraged connections with a number of friends who were ministers and other government elites.
The project approval process was also questionable: big shots wielded undue influence on procurement projects on behalf of RDC, despite a previous evaluation report by a technical team of the Tanzania Electric Supply Co. (TANESCO). The report found that RDC was incapable of executing the project. Other informants linked ministers to the firm. The prime minister, Edward Lowassa, who personally formed the committee to negotiate the power deal with RDC, contrary to the position of the technical team, was at the center of the talks about the controversial project.
Production was to start within 60 days, between Sept. 18 and Nov. 18, 2006. But the deadlines passed with nothing but excuses. While RDC's country manager, Naeem Gire, claimed his firm had difficulty shipping the turbine from North Carolina, TANESCO said RDC was trying, in vain, to raise US$10 million from the local sources to pay for lease and air freight charges.
Guarantee was a problem: RDC had lately transferred the offer to a third party, Dowans Holdings of the United Arab Emirates, for an undisclosed amount. Dowans Holdings, for its part, had managed to pocket US$102 million from the government, despite complaints by the public to stop the deal so as to launch an independent parliamentary committee to carry out investigations.
Opposition legislators pressed for an independent parliamentary committee to investigate widespread allegations of corruption in the deal,within the executive branch. In April 2007, ministers blocked the matter to be discussed in the House and passed the issue to the Prevention and Combating of Corruption Bureau (PCCB), a pro-state anti-corruption agency.
A tug-of-war emerged between PCCB and Parliament. The PCCB criticized the legislators for their demands to probe into the power deal, saying the issue was under its jurisdiction. This assertion was challenged by the speaker of Parliament, but he was unable to bring the topic to the floor — which forced Parliament to drop the whole issue, following the negative reaction from the executive and from a cross-section of legislators from the ruling party, which occupied over 85 percent of the seats. The prime minister is alleged to have summoned parliamentarians from the ruling Chama Cha Mapinduzi (CCM) party and instructed them to abandon the RDC issue for the sake of party solidarity. The PCCB prepared its own investigative report, which conveniently cleared the executive in the scam. PCCB is accountable to the president, and the bureau's director is a presidential appointee. Efforts to make PCCB an entity independent from the executive proved futile in April 2007, when the government opposed the idea.
In July 2007, members of Parliament raised fresh concerns over the scandals in the power sector, including the PCCB report on the RDC deal. Parliament wanted to gain access to other contracts pertaining to other questionable projects. But their efforts hit a snag for the second time as ministers, including the new minister for energy and minerals, Nazir Karamagi, were adamant that the contracts were the exclusive preserve of the executive branch.
Corruption in the energy sector is making life difficult not only for Tanzania's poor, but also for its investment community. Households and industries connected to the national grid face exorbitant tariffs coupled with an unreliable power supply. Viable power sources like coal and other new hydropower sources are neglected. They include the Kiwira coal plant, with the capacity to produce up to 200 megawatts and the Mchuchuma coal plant, with a 400-megawatt capacity. Hopes that the new government would be able to curb corruption are evaporating as disputed projects continue to gain approval from the executive.
Existing Independent Power Projects (IPPs), including Independent Power Tanzania Ltd. (IPTL) and Songas, are but a burden to the taxpayers. IPTL costs Tanzanians dearly. Studies have found IPTL to be more expensive than 16 similar diesel projects in developing countries. In 2005, charges to TANESCO by IPPs averaged US$13 million per month, equivalent to 68 percent of utility revenue. By 2006, charges reached US$17.5 million per month, more than 95 percent of total utility revenue, making it impossible for TANESCO to be a sustainable venture to finance investment as part of improving reliability or expanding electrification.
The power sector drama is just the tip of the iceberg of corruption in Tanzania. The Bank of Tanzania (BoT) is now embroiled in financial scandals. BoT has lately paid some US$30.8 million to a suspicious company, Kagoda Agriculture Ltd. (KAL) which claimed to have been "assigned" to collect debts owed to twelve foreign creditors from Europe, Japan, and the U.S. The money was paid to KAL, which presented deeds of assignment "signed" between Sept. 10 and Nov. 3, 2005. The company managed to raise this huge amount in a very short time after its registration. The foreign creditors have denied that they appointed KAL to collect the funds on their behalf.
Furthermore, a document circulating on Internet message boards fans the flames of the BoT scandals. The unconfirmed report claims that an organized crime network involving Indians, law firms and Tanzanian civil service employees continues to embezzle resources from the central bank. The International Monetary Fund (IMF) has instructed the government to appoint an accredited firm to audit the Bank of Tanzania's accounts. Parliament has demanded a parliamentary probe of the allegations, but the Ministry of Finance has rejected the idea.
The KAL drama and the alleged formation of an organized crime network is just the beginning. Other scandals involve the construction of the Bank of Tanzania Twin Towers, whose overall cost is said to have been so inflated that it now stands at a staggering US$340 million. Experts say one could construct four similar buildings in London or Tokyo with the same amount of money. Other reports of poor governance have emerged in the mining, hunting and timber export industries. Some reports estimate that 96 percent of logging revenue is lost due to corruption.
A lack of checks and balances in the system is partly to blame. Abuse of power continues to thwart efforts to promote sound governance, while Parliament has proven nearly useless in its oversight role and as a check on executive power. Democratic governance is elusive as powerful and self-interested economic actors gain control over the executive branch and wield its powers to their own advantage. Annual auditing of public funds by the Controller and Auditor General, capacity building for the PCCB, awareness campaigns on corruption, donor-supported governance initiatives as well as the formation of the sector Parliamentary Committee are not effective enough.
This is partly due to state capture, a process in which powerful elites from the private sector buy off politicians and bureaucrats to twist laws, budgets, projects, policies and regulatory environments in their own interest. The majority of parliamentarians are little more than rubber-stamp legislators, who approve defective plans from the executive branch with little due diligence or scrutiny. Political patronage dilutes governance-building initiatives.
Thanks to political stability, there have been no riots to date. But unless a comprehensive effort is made across all branches of government to promote sound governance and integrity in government, Tanzania's infrastructure and resource challenges will be here to stay.
Read critical peer review of this report.
Tuesday, May 13, 2008
Tanzania: The Influence Grid
Monday, May 5, 2008
Kenya: Linking Violence & Corruption
An analysis of recent political violence in Kenya posits that corruption and failures of the democratic process, not ethnicity, are driving the conflict. While few readers here will be shocked by this conclusion, the authors do a fine job of assembling the supporting evidence.
Authors Rachel Itwaru and Sarah J. Johnson:Indeed, though the killing has been mostly between members of different tribes, this tragedy is not simply a story of longstanding ethnic divisions. Instead, the conflict is a product of two political factors: Kenya’s historically corrupt government, and the willingness of some politicians to exploit the anger following the elections by encouraging violence.
Full analysis at the Harvard Political Review.
Global Integrity's take: Global Integrity Report: Kenya.
"Koun Bonega Crorepati?" in Bangladesh
Global Integrity's Mohammed Syful Islam writes in from Bangladesh with his take on the future of corruption in his government. Corruption is everywhere, he says, but change may be coming.
"Koun Bonega Crorepati?" in Bangladesh
By Mohammed Syful Islam
On "Koun Bonega Crorepati" ("Who Will Be The Owner of Crore of Taka"), a popular game show on India's Zee TV, participants answer general knowledge questions to win one crore taka [one crore is equal to 10 million taka (US$145,571)].
But Bangladeshi politicians -- regardless of name or seniority -- do not need a TV game show to quickly earn several crores of taka. Thanks to a recent anti-corruption drive by the interim government that has revealed hundreds of cases of corruption, the Bangladeshi people now know that politicians and government officials have deceived them and earned crores of taka by abusing power.
Public opinion surveys from 2001 through 2006 show that people perceive Bangladesh as one of the most corrupt countries in the world, much to the denial of political leaders.
"Under the political governments of two ladies-Sheikh Hasina and Begum Khaleda Zia-corruption was made a way of life at all levels, particularly at the corridors of power," says Golam Haider, a senior journalist at The New Nation newspaper . "It was openly patronized and practiced across the table.
Despite the interim government's anti-corruption efforts, corruption still exists; now it's happening under the table. The anti-corruption drive is not running on the right track. Corrupt people cannot fight corruption, Haider says.
Jasmin Rahman, a master's student at a government university, says corruption begins at the school level. "A student who fails in school-level examinations still becomes eligible to sit for examinations under the education board, after she or he or their parents pay some bribe to the school authorities in the name of donation," Rahman says. "What can you expect from a student but corruption in professional life, whose school life is full of corrupt practices?" Rahman says she had to pay a bribe to board officials to gain admission to college.
At the very least, the interim government's anti-corruption drive has exposed several cases of government officials corruptly receiving money and property.
One example is the modern prince of Bangladesh, Tarique Rahman, and his younger brother, Arafat Rahman. The brothers are the sons of former President Ziaur Rahman and former Prime Minister Begum Khaleda Zia, and they reportedly amassed vast resources worth many crores of taka at home and abroad, thanks to power politics and their nexus with corruption, as perceived by many Bangladeshis.
Tarique and Arafat have known corruption most of their lives. In 1977, Ziaur Rahman, a former chief of army staff, became president of Bangladesh by overthrowing Justice Abu Sadat Mohammad Sayem. But in the early hours of May 30, 1981, a group of army officers assassinated Zia, along with six bodyguards and two aides. During the assassination, family members struggled to survive. The then-government allotted a house in Dhaka, the capital, to Zia's wife, Begum Khaleda Zia, and their sons, Tarique and Arafat.
In 1991 and later in 2001, Begum Khaleda Zia's Bangladesh Nationalist Party (BNP) came into power, and her two sons reportedly began committing massive acts of corruption through misuse of their mother's office.
An investigation of Warid Telecom, a cell phone company that entered the Bangladesh market, revealed that Arafat Rahman purchased property in Dubai and put US$2 million in two Hong Kong banks-his kickbacks for assisting Warid Telecom in obtaining a licence, newspaper reports say.
The two brothers also failed to legalize their undeclared and questionable 1.68 crore taka (US$244,559) under an amnesty by paying 44 lakh taka (US$0.64) as a fine. After the National Board of Revenue (NBR) rejected their plea, it began the process of filing a tax evasion case against the two brothers under the Tax Ordinance of 1984. Their mother, Khaleda Zia, and a former finance minister in her cabinet, M Saifur Rahman, also failed to what is popularly called "whiten their black (untaxed) money" of 1 crore taka (US$145,571) and 1.30 crore taka (US$189,242) respectively.
Tarique Rahman is now in prison on several charges, while Arafat Rahman is free after being interrogated by the army-led joint forces. In his wealth statement to the Anti-Corruption Commission, Tarique Rahman said he owns a house in the capital, 2.01 acres of land worth 345,000 taka (US$5,022) in Bogra, savings certificates worth 20,000 taka (US$291) and 134,000 taka (US$1,951) in different banks, shares of different companies worth 7,170,000 taka (US$104,374) and five tolas (US 58 grams) of gold. His wife and daughter own assets valued around 1.40 crore taka (US$203,799). The common people believe that is only a small portion of what they actually own.
On July 16, 2007, also under the pretext of the war against corruption, police arrested Sheikh Hasina Wazed, former prime minister and president of the Bangladesh Awami League. Hasina Wazed—one of the two key leaders of the two main political parties-faces extortion charges. She is accused of extorting about 3 crore taka (US$436,713) from a businessman in return for allowing his company to set up a power plant during her tenure between 1996 and 2001. She is being held in a special jail as she awaits prosecution.
Several ministers of the Khaleda Zia cabinet have been sentenced to various prison terms in the last few weeks, while most of the senior ministers and politicians of the country are awaiting verdicts in corruption cases. The present interim government now detains hundreds of politicians, former ministers, government officials and businessmen on different corruption charges.
Amanullah Aman, a former state minister, was handed 10 years of rigorous imprisonment and three years of simple imprisonment and asked to pay a fine of 10 lakh taka (US$0.15) in a corruption case for earning huge money through illegal means. His wife, Sabera Aman, also was sentenced to suffer three years in jail, as the court found her guilty of assisting her husband in unlawfully obtaining money.
Another official, Mir Mohammad Nasiruddin, the ex-junior minister for civil aviation and tourism, was sentenced to suffer 13 years in prison for committing rampant corruption. The minister was found guilty of amassing wealth through misuse of power and illegal means. In the same case, his son, barrister Mir Mohammad Helaluddin, was given three years of imprisonment.
In yet another judgement, the court sentenced former lawmaker Wadud Bhuian to 20 years in jail for acquiring land and property worth 6 crore taka (US$873,426) through corruption and abuse of power. The court also ordered Bhuiyan to deposit his illegally obtained assets with the national exchequer.
Considering these examples, it's no wonder that Bangladeshi people widely believe that files in government offices never move from one table to another without fuel (a bribe or speed money). Through this means, scores of class-III and class-IV government employees "earn" crores of taka. For example, the anti-crime division found a Land Ministry petty officer possessing three multi-story buildings in Dhaka and huge tracts of land throughout the country. He obtained this wealth by misusing power and maintaining close relationships with ministers and political bigwigs.
There are many examples in this impoverished country of government leaders living as tenants in the houses of their class-III or class-IV employee subordinates.
Police unearthed 1 crore taka (US$145,571) in cash from the house of the chief forest officer, breaking all records of corruption. This government official earned a salary of only 20,000 taka (US$291) a month. The joint forces later found more than 1,000 acres of government land occupied by him and his family members. His wife changed cars twice a year and possessed 400 bhoris (US 4,000 grams) of gold ornaments.
Recently, I have been following the story of a corrupt businessman who has a long history of evading taxes and power tariffs. Customs authorities suspended his license for paying a fine with a fake treasury note. Some of my journalist colleagues, who benefit from the unscrupulous businessman, are pressuring me to not publish reports against him.
Yes corruption still exists, but since the interim government has declared a crusade against it, the situation in Bangladesh is beginning to change. People are very hopeful that the country will be able to break free from corruption's grip.
More local reporting on Bangladesh in the Global Integrity Report: Bangladesh
Friday, April 18, 2008
God: 91%, Government: 74%, Corruption: 29%
Via Chris Blattman's Blog, the latest polling from Liberia. Blattman observes, "Why, I wonder, is the War on Corruption in the same headline as God? Is God some sort of baseline for maximum possible support?"
And here is our own (less amusing) coverage of corruption in Liberia.
Thursday, April 17, 2008
USA: $50M Air Force Contract Was Rigged
The Department of Defense's Inspector General has investigated a relatively small US$50 million Air Force contract, painting a vivid picture of how conflicts of interest play out at the highest levels of government.
Despite the distress of employees involved in the contracting, the weight of rank pressed the deal forward, which awarded a contract for entertainment at the Air Force's Thunderbirds air shows to retired military officers with ties to the Thunderbirds. After complaints from an opposing bidder (one of which bid to do the work at half the price), the contract was canceled, but no criminal charges were filed.
Washington Post: The report offers a searing, blow-by-blow account of how a relatively mundane Air Force contract spun out of control, highlighting serious conflicts of interest in the selection process, officers stacking the deck in favor of friends, and others influencing a system designed to eliminate such favoritism in spending taxpayer dollars.
Washington Post coverage here.
Our previous coverage of the funding struggles of the Inspectors General.
Image: (cc) Elaine Mesker-Garcia
Thursday, April 10, 2008
The Ugly Death of an Empire
Kalkali El-Hadi tells the story of the fall of Algeria's largest private bank, and the corporate shell game that hid the truth of its shaky finances from its investors, regulators and its customers. In the end, it was all too good to be true.
The Ugly Death of an Empire
By Kalkali El-Hadi
In early 2007, Algeria opened its "trial of the century," a three-month spectacle that followed the biggest financial corruption scandal in the history of the country: the stunning collapse of Khalifa Bank, the country's largest private bank.
The trial was the result of a three-year investigation that ensnared 4,000 people. Eventually 118 people, including executives, were arrested, but the man at the top, Abdelmoumen Rafik El Khalifa, was not one of them. He fled to Britain in 2003 when the scandal broke. The Algerian court tried him in absentia, along with 103 others. Khalifa and dozens of others were convicted. Khalifa was sentenced to life in prison and in late 2007 was awaiting extradition to Algeria.
The Khalifa trial came at a time when President Abdelaziz Bouteflika was trying to crack down on corruption. A tough law enacted in February 2006 provides that anyone charged with corruption, regardless of their official rank, would lose the traditional immunity from prosecution enjoyed by public officials.
Despite such measures, corruption remains a basic part of life for Algerians. Financial corruption remains almost daily front-page news in the Algerian press, dealing blows to the government efforts. Among the scandals:
* The Agricultural and Rural Development Bank (BADR — Banque de l'Agriculture et du Développement Rural), a state bank that reaches into many sectors of Algeria's economy, misappropriated more than two billion dinars (US$30 million) in a series of banking scams.
* In the wilaya (province) of El Tarf, a financial scandal ended with El Tarf's governor, Djillali Arar, in prison.
These affairs had so shaken the Algerian society that corruption had become the key domestic issue. But none of the scandals — indeed, no corruption scandal since the country's independence in 1962 — was as big as the Khalifa affair.
The trial opened on Jan. 7, 2007, in a court in Blida, 30 miles west of Algiers. The 104 defendants were accused of more than 30 serious charges, among them theft, fraud, forging official and bank documents, bribery and abuse of power. However, the star defendant, the Khalifa business empire's founder Abdelmoumen Rafik Khalifa, was in Britain, jailed on immigration and money laundering charges. An extradition agreement between the two countries was worked out just too late for Khalifa to be sent back to face justice in Algeria. Six other key defendants were also tried in absentia, after they fled to various European countries.
Khalifa, 40, is the son of a Cabinet minister in the administration of Algeria's first president, Ahmed Ben Bella. Rafik Khalifa worked as a small-time chemist in Cheraga district before rapidly and mysteriously ascending to lead an empire of 10 companies. Between 1998 and 2003, Khalifa's companies hired some 20,000 employees; the collapsed Khalifa Bank - the only Khalifa unit charged with wrongdoing — had 7,000 workers. It was a meteoric rise, and in hindsight, it was too good to be true.
The scandal began in 2003 with the arrest of three Khalifa Bank executives who were allegedly trying to smuggle two million euros (US$2.9 million) in a suitcase through Houari Boumediene Airport in Algiers. By June 2003, Khalifa Bank, the largest in Algeria, was bankrupt.
The collapse of Khalifa tore a hole in the public treasury. Hundred of thousands of Algerians lost their Khalifa accounts — accounts which were offering interest rates of up to 17 percent before the bank's seemingly inevitable collapse. The government has insured the accounts, but only up to 9,200 euro (US$13,495). The majority of Khalifa Bank accounts were held by public institutions and state-owned companies. Thus the financial collapse reached not only Khalifa Bank customers, but all Algerian taxpayers.
The money is believed to have been siphoned from the Khalifa Bank accounts to fund the crumbling Khalifa business empire, which a leaked French intellegence report estimated was losing 500 million euro (US$733 million) a year. After suspicious Algerian regulators restricted money transfers from Khalifa Bank, Khalifa executives were left with less reliable methods of illegally moving money to their European subsidiaries, setting the stage for the dramatic airport arrest.
In April 2003, the authorities began their investigation. Of the 4,000 people who were investigated in some way, only 104 were officially charged. Two of those defendants — Abdelwaheb Keramane, former governor of Khalifa Bank, and his brother, Abdenour Keramane, former Algerian Industry minister — refused to stand before the court in the trial, saying the charges against them were politically motivated.
Even the lesser defendants in the case had relatively high profiles. Among them were executives of state-owned real estate agencies, general and national secretaries in the Algerian general labor union, officials from the national welfare office, employment-benefit and national-security organizations and celebrities from the arts and sports worlds.
The testimony was star-studded, with a parade of previous and acting ministers in the Algerian government called to the stand. The most prominent witnesses were Mourad Meddilsi, former Financial minister and the acting Foreign Affairs minister and Karim Djoudi, acting Financial minister. Two high-power witnesses who were called by the court but did not testify were former Housing Minister Abdelmadjid Taboune and Aboudoujora Sultani, leader of the political party Movement of Society for Peace.
After more than three months of very complicated proceedings, the court issued a sentence of life in prison for Khalifa and sentences ranging from one year to 20 years for others.
Afterward, the court was criticized for neglecting to charge enough of the key players in the construction of Khalifa's financial empire — dubbed the "big fish" by the Algerian press. Among those critics was Algerian lawyer Saad Djebbar. "It is certain that big fishes escaped the net of Algerian justice," he said. "Consequently, these sentences aren't the end in this affair. Other prominent people were behind Khalifa's cartoon empire, among them generals in the intelligence community."
At the same time, relatives of the defendants expressed their disappointment in the sentences and in the lack of transparency of the trial, drawing a parallel to the trial of deposed Iraqi President Saddam Hussein. "Our relatives were tried quickly and in a less-than-open way. We don't know about the progress of the trial. In this way, ours will go... as was done for President Saddam." One of the defense attorneys criticized the court for breaking judicial procedure laws by opening the case in the Blida court and by limiting the window for appeal to three months.
The Khalifa trial became known as the "trial of the century" in Algeria. Considering the results, it has been a real test for the Algerian justice system and the rule of law, as well as a revealing look at the corruption reform begun four years ago.
Read more about Algeria...
Tuesday, April 1, 2008
Reporter's Notebook: Vanuatu
By Bob Makin
Vanuatu is a very small country (pop. 200,000), and the capital city is tiny (30,000). Yet bad news travels as fast as the trade wind — which frequently carries with it the smell of corruption.
In 2006, a resident of an area adjacent to the spring supplying water to the capital, Port Vila, noticed that a farmer down below had constructed a dwelling of some permanence. Believing this building to be inside an area protected by law to prevent contamination of the city's drinking water, the resident made further inquiries. Indeed, the farmer had built where no structure was allowed, and where he had permission to farm only crops unlikely to present a hazard to the aquifer.
The observant resident notified the authorities, but he found out that the matter was not all that straightforward...
Read More at the Global Integrity Report...
Friday, March 14, 2008
Reporter's Notebook: Russia
By Galina Stolyarova
One day in April 2007, human rights lawyer Olga Tseitlina got a sudden call to a St. Petersburg police station. She had been asked to represent a client detained and fined for allegedly swearing in public. She soon discovered that police had used similar evidence against nearly 100 others.
They had all been rounded up during an April 15 demonstration called by an opposition group, The Other Russia Coalition. In theory, the right to protest is guaranteed by the Constitution of the Russian Federation, but Tseitlina alleges that Russian police use any means they have to suppress such events.
"One police statement ordering a person's detention for swearing in a public place may not look suspicious. But if we collect more than 50 identical statements… then it becomes clear that the evidence was contrived," Tseitlina said.
Read more in the Global Integrity Report: Russia...
Image: Street protest in Moscow, April 2007, by Dave Pyle.
Tuesday, March 11, 2008
Africa: Why Public Health Programs Are Failing
Global Integrity contributor Thompson Ayodele writes in with an analysis of aid, public health campaigns, and the corruption that prevents medical care from reaching the people who need it most.
Health, Africa’s struggle
Foreign aid is flowing in in large amounts, but it’s not reaching the people
By Thompson Ayodele
After decades of neglect the provision of effective health care is becoming one of the biggest concerns in Africa.
Both foreign donors and African governments are keen to make this their priority and, consequently, the money taps have been opened.
Foreign aid in the form of hard currency is flowing in unprecedented quantities into the ministries of health of many African countries.
But despite this generosity things are not improving : medical staff are demoralized, access to essential medicines remains low and corruption remains a serious problem.
Development assistance for health has increased from about R20billion in 1990 to more than R104billion in 2005. Overall, about 10 percent of Africa’s health care expenditure is now financed directly by donor aid.
Nevertheless, the majority of African countries are way off track with progress towards the health-related Millennium Development Goals.
Access to essential medicines remains low in the poorest parts of the world. According to the World Health Organization (WHO), more than 50 percent of Africans lack access to essential medicines.
Around the world more than 10million children in developing countries die unnecessarily from diseases that are easily preventable and cheap to treat, such as diarrhoea, measles and malaria.
Furthermore, up to 80 percent of Africans have to pay for treatment straight from their own pockets. In short, public health systems are failing to deliver.
A major factor behind this failure of foreign aid to improve health care is the fact that nearly all of it first passes through health ministries before it reaches patients.
According to studies undertaken by the WHO and the Centre for Global Development in Washington DC, bureaucrats have little idea of what actually happens to the money after it is handed over to governments.
As a result of these lax controls, a great deal of this money is subverted by health officials for private gain, particularly in countries that have a problem with corruption. This can occur in the ministry itself, or further down the line in the hospital.
A study by Maureen Lewis of the World Bank shows that corruption in the healthcare sector of developing countries is so bad that it severely undermines the effectiveness of donor funding.
The leakage of drugs from the supply chain is a particular problem, mainly since publicly funded drugs can fetch a high price if stolen and resold on the black market.
Recent surveys in Nigeria show that 28 public health centres had received no drugs from the federal government in two years.
Meanwhile, a 2001 study by the World Bank showed that fewer than half of government health facilities in Lagos and Kogi states had received drugs from the federal government.
Last year National Agency for Food and Drug Administration and Control boss Dora Akunyili disclosed that it is commonplace for donated drugs such as vitamin A capsules, Mectizan and Coartem tablets and oral rehydration salt to be pilfered and resold on the open market.
In the same vein it was reported that the Global Fund was considering suspending two of Nigeria’s five-year grants totaling R640million because of concerns over grant management, transparency of fund allocation and grant implementation and the ability of the Nigerian government to achieve the goals of the grants.
The Global Fund has already terminated grants to Uganda and Chad.
And this is not counting the dozens of other forms of corruption that plague the health system in Nigeria, including mismanagement of funds at the ministry and hospital level; absenteeism; staff extracting payments from patients for services that are supposed to be free; and the abuse of procurement contracts for supplies.
According to the NGO Human Rights Watch “the government’s failure to tackle local-level corruption violates Nigeria’s obligation to provide basic health and education services to its citizens”.
Add to this the chronic mismanagement that has left health workers owed months’ pay and hospitals with obsolete equipment, and it seems hardly surprising that donor funding is not making much of a difference to patients’ health.
Healthcare delivery in Africa is never going to improve while it remains under the control of the public sector.
Government ministries have very few incentives to deliver care to patients other than the goodwill of their staff.
As any manager of a private company will tell you, relying on this alone is not going to keep your customers. Unless there is a significant change in the way we manage the health sector, there will be few improvements – no matter how much money donors spend.
Bearing in mind the historic failure of African public health systems to provide citizens with the care they deserve, we should shift towards a situation in which governments no longer provide and manage all health care. The private sector should be given a far bigger role as well.
Thompson Ayodele is executive director of Initiative for Public Policy Analysis, a Lagos-based think tank.
Image 1: Doctor examines infant at PMI hospital; a hospital for women and children. Cote d'Ivoire. Photo: Ami Vitale / World Bank.(CC)
Image 2: An HIV awareness poster in Kenya. Treveno/Flickr (CC)
Monday, March 10, 2008
The Gap Between Elections and Democracy
Global Integrity's managing director Nathaniel Heller discusses the work required to move beyond democracies-in-name-only to truly accountable governments, in an op-ed published in the Washington Times.
The Gap Between Elections and Democracy
By Nathaniel Heller
Published in the Washington Times March 5, 2008
Troubling headlines in recent months from places as disparate as Pakistan, Kenya and Russia all share a common theme: the flaws in those countries' elections. Underlying this trend is the opinion that elections are one of the most visible and credible indicators of a country's level of democracy.
Evidence abounds of democracy's fragility or erosion in each nation — from the question of President Pervez Musharraf's commitment to holding free and fair elections in Pakistan, to the bloodshed in Kenya following Mwai Kibaki's apparently fraudulent re-election, to the Vladimir Putin regime's cynical stage-managing of the Russian presidential election.
To state the obvious, there can be no democracy without elections. But what about the reverse: Can elections occur in the absence of democracy? Putting aside the "elections" charade practiced by the likes of Cuba or Iran, the answer is still, unfortunately, yes. As a provocative new study demonstrates, when a country successfully holds a free, fair and open election that conforms to international standards, democracy is by no means ensured.
Global Integrity, an international group we work with that monitors governance and accountability mechanisms assessed 55 countries on 23 indicators and performance categories, examining the strength of civil society and governing institutions, anti-corruption mechanisms, and government accountability. The report confirmed that elections are but one part of a complex recipe for stability and good governance.
In some cases, countries with weak, ineffective or corrupt democratic institutions can still pull off plausible elections. Twenty of the 27 countries receiving "weak" or "very weak" ratings for executive, legislative and judicial accountability — from Argentina to Sri Lanka to Kazakhstan — still received "very strong" or "strong" ratings for election practices.
No country better illustrates the dangers of allowing the elections-to-democracy gap to remain wide than Kenya. In hindsight, the 2007 assessment of Kenya flashes like an eerie warning sign in history's rearview mirror. The ratings revealed dangerous fragility in Kenya's democratic institutions despite the prevailing conventional wisdom at the time that the country was on an upward trajectory.
In 8 of the 21 categories unrelated to elections, Kenya was rated "weak" or "very weak," including the rule of law, police performance and three categories of government accountability. The stage was set. Once the country's election results failed the legitimacy test, its institutional weaknesses helped fuel — rather than cool — the ensuing conflagration.
Nor are these problems confined to developing nations. Last week, Italy's president dissolved parliament and called for new elections after the governing coalition lost a vote of confidence. This will be Italy's 61st government since World War II.
Critics argue that Italy's electoral system gives too much power to fringe parties and too little attention to basic governing. Soon enough, Italy may have more "former prime ministers" than vineyards. Yet the new vote will proceed without the necessary institutional reforms.
Nonetheless, elections matter. After all, dictatorships such as North Korea, Burma, Saudi Arabia and Eritrea, which don't even hold elections, are so tightly controlled we could not gain access to local experts to do our research. And China, the world's largest autocracy, scored in the bottom 15 percent overall and didn't achieve a "strong" or "very strong" score in a single one of the 23 ratings categories.
Every country that the study rated in the bottom third in election practices also had "weak" or "very weak" ratings for the combined 23 categories. In other words, the absence of fair elections and widespread voter participation is almost always accompanied by weaknesses in the institutions on which a real democracy depends.
But this does not mean democratic progress is neither impossible nor destined to be slow. The study indicates that where dedicated leadership is present, positive change can happen quickly. Bulgaria, Latvia and Romania, three former Soviet Bloc nations, captured 3 of the top 7 overall ratings. These success stories suggest that a key link between elections and genuine democracy is the political will at the top to build and nurture democratic institutions that are independent from political personalities. Kenya's political leaders should take note.
Elections can be viewed as a celebration of democracy. Yet too often, as in countries like Kazakhstan, Egypt, Russia and Cameroon, they've been used as an excuse for prematurely declaring the democratic experiment a success. Focusing on the tougher, lower-profile institutional reforms may offer better leverage for cementing long-term reforms.
Nathaniel Heller is the managing director of Global Integrity, an independent nonprofit organization tracking governance and corruption trends around the world.
Uganda: Laws Alone Will Not Help
Ugandan analyst Jasper Mpiriirwe notes that legal implementations, not legal codes, are the trouble spots in Uganda. Uganda has the largest gap between law and practice of any country Global Integrity studied in 2007.
Laws Alone Will Not Help
By Jasper Mpiriirwe
Reprinted from The Monitor (Kampala), 8 March 2008
I have heard many times the hullabaloo of enacting more laws especially against corruption. Uganda has made a lot of strides in the legal framework as far as corruption in Africa is concerned. In fact on comparative terms, the legal framework in our country ranks among the best in Africa with the Global Integrity Report putting it at 90%.
Government has now tabled the Whistle Blowers Bill and the Witness Protection Bill in parliament which are supposed to protect a person who discloses information against a public official on misconduct, corruption.
These bills, if passed, will further reinforce the Inspectorate of Government Act 2002, the Leadership Code Act 2003, the Access to Information Act 2005, Public Procurement and Disposal Of Assets Act 2003 etc on the fight against corruption.
However, for some reason, whistleblowers have remained more endangered than suspected fraudsters! Clear previous recommendations to protect whistleblowers have just been ignored by corrupt management. It seems therefore that although on one hand there will be a law to protect a whistleblower, on the other hand the enforcement of any legislation depends on the mood of the implementer rather than the legal provisions!
A whistleblower is a person who on his own free will makes a disclosure on corruption, misconduct or criminal offence by a public official or agency to a person or agency capable of investigating the complaint. Ask Athanasias Kakwemire, formerly of NDA if you want to know the cost of whistle blowing in Uganda.
Uganda is a signatory to the UN Convention on Preventing and Combating Corruption 2003 and Article 33 provides that each state/party shall consider incorporating into its domestic system measures to provide protection against any unjustified treatment for any person who reports in good faith and reasonable grounds to competent authorities any facts or acts of corruption.
The 1995 Constitution as amended provides that "all public offices shall be held in trust for the people, all persons placed in positions of leadership and responsibility shall, in their work, be answerable to the people, and all lawful measures shall be taken to expose, combat and eradicate corruption and abuse or misuse of power by those holding political or other public offices."
The Access to Information Act is in force and one of its purposes is to protect persons disclosing evidence of contravention of the law, corruption etc. The regulatory and institutional framework of this Act as provided is still 'hot air' to date.
Whistleblower legislation indeed will be another tool to expose and combat corruption in Uganda. But all that government needs is a mechanism that would ensure enforcement of the law. The Bill will seek to protect whistleblowers and witnesses in corruption cases from reprisals, dismissal, victimisation by the accused persons or institutions but our history shows the opposite.
What we need therefore is more of the will than just words!
The writer is a policy analyst and coordinator, Anti-Corruption Coalition Uganda
Thursday, February 28, 2008
Reporter's Notebook: Turkey
By Burak Bekdil
Winston Churchill once described Russia as "a riddle wrapped in mystery inside an enigma." Today, that description is perfectly applicable to 21st century Turkey. One of Europe's poorest economies — with the Old Continent's youngest and second-largest population — Turkey has a unique combination of demographics, politics and economics. Annual population growth is 1.5 percent; crime rates are around 40 percent and rising; 80 percent evade their taxes; a quarter of households use stolen electricity; half of the economy is "underground" and corruption is endemic. Yet, few Turks complain.
When Recep Tayyip Erdogan launched his Justice and Development Party (AKP) in 2002, parliamentary elections were only a few months away, and he based his election campaign on solid pledges to fight corruption. In November 2002, the AKP won a landslide election victory, earning an unusual two-thirds majority in Turkey's 550-seat Parliament, despite getting only one-third of the national vote. The discrepancy is a quirk of Turkey's peculiar election laws, which include a 10 percent national threshold for parliamentary representation.
But even from the AKP's early days in power, there were hints that the party's pre-election commitment to fight corruption came with no genuine desire to fulfill it...
Read More at the Global Integrity Report: Turkey...
Monday, February 25, 2008
Reporter's Notebook: Costa Rica
By Giannina Segnini
Early in the morning of July 12, 2005, nurse Patricia Fallas sacrificed her life while guiding dozens of patients to safety as flames engulfed the Calderon Guardia Hospital. The appalling state of the building — the lack of emergency devices and signs — was among the leading reasons for the fire that caused the death of 16 patients and three nurses, who heroically struggled to save the lives of those for which they were caring.
Days after the tragedy, officials from the Costa Rican Social Security Institution (CCSS—Caja Costarricense de Seguro Social) said that there had been insufficient funds to pay for the hospital's necessary safety renovations, which several studies had labeled urgent during the past few decades. The story of this fire shows the direct effect of corruption on the life of Costa Ricans.
Read More in the Global Integrity Report: Costa Rica...
Thursday, February 21, 2008
Reporter's Notebook: Malawi
By Suzanne Marmion
If you thought your old school desk was uncomfortable, consider the classroom in Malawi just outside the commercial capital of Blantyre. The "schoolhouse" is simply a tree. Beneath its sheltering branches, children have arranged a circle of rocks. Some stones are barely bigger than a fist. Imagine teetering on one of those through an arithmetic lesson.
Here, in one of the poorest countries in the world, children often learn in crumbling mud-and-grass structures, or as in this case, no structure at all. Yet just behind the scattering of "chair" stones, there stands a new school building built of tidy red bricks. Inside, rows of sanded wooden desks and chairs face an empty blackboard. A heavy padlock on the door keeps the children and their teachers locked out.
Read more in the Global Integrity Report: Malawi...
Friday, February 8, 2008
Tanzania: Procurement Scandal Takes Down Prime Minister
Prime Minister Edward Lowassa has resigned Friday, following the completion Wednesday of a Parliamentary investigation into his dealings with the supposedly U.S.-based Richmond Development Company (RDC). The company turned out to be non-existent, with assets barely more than a post-office box. The government's ill-fated hiring of RDC to provide badly needed electrical power plants was covered at length in the Global Integrity Report: Tanzania, published last week.
Energy Minister Nazir Karamagi and East African Cooperation Minister Idrissa Msabaha have also resigned. The president of Tanzania has dissolved the Cabinet. Tanzanian media appears quite happy with the resignations. Mizengo Pinda has been named the new prime minister.
Global Integrity's analysis of anti-corruption in Tanzania identified systemic weaknesses in the oversight of public expenditure, noting that "the Public Accounts Committee is chaired by the opposition, but the committee still has very limited influence, and the chair frequently makes public comments defending the status quo."
In related news, the ongoing scandal has prompted some enthusiastic local coverage of the Global Integrity Report: Tanzania.
Tuesday, February 5, 2008
Pakistani Judges Resist Military Rule
Regarding the military in Pakistan, a Global Integrity contributor writes: “…the power of the military has transformed Pakistani society, in which the armed forces have become an independent class, entrenched in the corporate sector, thus, controlling major assets of Pakistan. The military has a strong control over the financial institutions of Pakistan and therefore takes most of Pakistan’s national budget and enjoy luxuries by spending national resources.”
But there is resistance to this power, in the form of a judiciary that is fighting for the rule of law and the constitution. In this article, Global Integrity looks into the expansion of military rule in Pakistan, and the forces that work to counter it. Pakistani Judges Resist Military Rule
By Global Integrity staff, based on the Global Integrity Report: Pakistan
Pakistan has been under military rule ever since General Pervez Musharraf ousted previous Prime Minister Nawaz Sharif in October of 1999. In the years following the coup, which Musharraf often justified by promising to clean up the corruption of the former regime, Musharraf named himself President while remaining head of the army and granted himself new powers including the right to dismiss an elected parliament. Most recently, in March 2007, Musharraf suspended Supreme Court Chief Justice Iftikhar Mohammed Chaudry for challenging corruption within the government.
Pakistan is of key interest to the United States because of its geographical proximity to Afghanistan and Pakistan’s history of battling radical Islamic extremists within its own borders. The United States Senate recently approved an aid package to Pakistan worth $785 million, $300 million of which was earmarked for counter terrorism security assistance. Since the 9/11 terrorist attacks Pakistan has become one of the largest recipients of U.S. military aid.
The primary finding of the assessment is that while executive and legislative accountability are weak in Pakistan, the judiciary has remained independent from the government and is effective in upholding the rule of law. Media, Law Enforcement and the Civil Service, however, are rated as “Weak” and “Very Weak.”
The detailed findings of the study that are described immediately below and are depicted in the graphic that follows reflect the ratings given to Pakistan on 23 categories of good governance, government accountability and anti-corruption indicators. Those categories comprise more than 300 specific questions scored by our in-country team.
The detailed findings, which led to previous conclusions about the weakness of executive and legislative accountability along with media and law enforcement, are presented below.
Key Findings of the Global Integrity Report: Pakistan
>> 12 out of 23 (or 52%) of the government accountability and anti-corruption sub categories for Pakistan earned “Weak” or “Very Weak” ratings. The country earned “Strong” or “Very Strong” ratings for just 3 of the 23 categories assessed (13%) compared to an international average of 31%.
>> Of the 55 countries assessed in the Global Integrity Report: 2007, Pakistan had the fourth largest gap between having anti-corruption laws on the books and actual implementation. This points towards a lack of political will and leadership in enforcing existing anti-corruption safeguards.
>> Judicial Accountability was assessed as “Moderate” and reflected the judiciary’s efforts to stand up for constitutionalism when the military attempted to control its functioning and decisions.
>> The military’s lack of tolerance for dissent earned Pakistan a ”Weak” rating for Media in the Global Integrity Index: 2007. Musharraf’s suspension of Chief Justice Chaudhry, in March 2007, triggered a wave of protests that were broadcasted on television, the internet and mobile phones along with critical assessments of the current government. In response, Musharraf deepened existing controls over media to “… prohibit the broadcast of programs ‘against the armed forces’ ” (Global Integrity Report: Pakistan 2007: Timeline).
>> The Global Integrity Report: 2007 assesses Pakistani law enforcement agencies as highly ineffective. Law enforcement agency appointments are not made according to professional criteria and are subject to political interference leading to a “Very Weak” rating.
>> Pakistan earns a “Very Weak” rating for civil service regulations because of its complete lack of regulations governing gifts and hospitality to civil servants (tying Pakistan with its poorer neighbors Nepal and Bangladesh).
Global Integrity's Conclusions
According to Global Integrity’s rating of Pakistan’s institutions and accountability mechanisms previous analyses have concluded that the Pakistan’s governance problems lie mainly in weak civil service, executive and legislative accountability along with poor law enforcement and weak media.
Pakistan’s chances of putting into place effective anti-corruption mechanisms now rests on the country’s ability to rid itself of military rule. Successful and clean elections, should they occur, are nec