July 2004
    CHINA: Hong Kong E-government Programs to Focus on Customers
    SAUDI ARABIA: Saudi Arabia Signs Agreement with UNIDO
    USA: Consumer Federation of America Cautions Regulators Against Undermining 'Next Generation' of the Internet
    African Leaders Asked to Sign, Ratify AU, UN Anti-Corruption Conventions
ZIMBABWE: State Resolute in Fighting Corruption
GAMBIA: Corruption Commission Begins Hearings, Then Stops for Lavish State Celebration
KENYA:Watchdog Group Urges Kenya to Cut Corruption or Lose Aid
MALAWI: President Bingu Warns on Corruption
KENYA: Act On Corruption, Kibaki Told
KENYA: Loopholes That Allow Corruption to Thrive
    CHINA: Audit Mechanism Will Help Curb Corruption
SRI LANKA: UPFA Receives Massive Mandate against Corruption and Poverty
BANGLADESH: 'Governance in Dhaka Riddled with Corruption'
INDONESIA: Nine Anti-corruption Judges Named
    RUSSIA: Duma to Ratify UN Convention against Corruption This Year - MP
RUSSIA: Russian Organizations to Crack Down on Corruption Together
RUSSIA: Corruption in Russia: The Government Sees the Danger
RUSSIA: Russian Interior Ministry calls for Crackdown on Corruption
IRELAND: Politicians Warned Not To Be Complacent about Corruption
    JAMAICA: PNP Code of Ethics a Good Move
    International Congresses Tackle Governance Issues
Global Center Established to Recognize Business Ethics, Leadership Qualities
U.S. Says Development Bank Corruption 'Intolerable'
World Bank Bars Canada's Acres for corruption
Making Progress in Corruption Fight
    SOUTH AFRICA: Premier Tells Civil Servants to Get Act Together
GHANA: Civil Servants Go to Court Over Deductions
TANZANIA: Focus On Pay Increases for Civil Servants
KENYA: Civil Servants Issue Strike Notice
KENYA: Unveiled: Pay Rise for Civil Servants
KENYA: Wealth Forms for Civil Servants to Target Graft
NAMIBIA: Civil Servants Urged to Set Pace On Work
    JAPAN: Civil Servants Now Face Performance-related Pay
BANGLADESH: How Much Should We Pay Our Public Servants?
INDIA: PM against Frequent Transfers of Civil Servants
SINGAPORE: National Security Course for Senior Public Servants
JAPAN: Allowance for Transferred Public Servants to End
SOUTH KOREA: "No" to Public Servants' Strike Rights
    UK: Hidden Value of Civil Servants
GERMANY: Berlin Proposes Ban on Religious Symbols for Civil Servants
UK: 100,000 Civil Servant Jobs to Go
IRELAND: Civil Servants Face Total Smoking Ban
    ISRAEL: Ethics at work: Corporation and Community
    A Sound Academic Experience is About More Than Books
    INDIA: India Shining - At least on E-governance
INDIA: e-governance Takes Penguin To Rural India
TURKEY: Turkey Cracks Down on Tax Dodgers with New E-gov System
INDIA: Infy to enable e-governance for Delhi
INDIA: E-governance: IT Firms' Role to be Studied
INDIA: E-Governance in Municipalities
    UK: E-government: Beyond the UK
IRELAND: Irish Farmers to Get E-facility for Cattle
UK: E-government Investment ‘Invisible’ to the Taxpayer
SWITZERLAND: Swiss Get E-gov Framework
    BAHRAIN: E-Government Revolution
    US: E-government Wins Higher Ratings
USA: State of Local E-Government
USA; Michigan Tops in E-Gov't
    Finnish Universities Plan E-government Encyclopedia
    CHINA: Let Sunshine of Public Finance Shed over All Rural Areas
CHINA: Public Finance to Enter Chinese Rural Areas
    ITALY: Bank of Italy: Public Finance Needs Permanent Measures
    A World Tax to Help the Poor
    BOTSWANA: Moupo Rejects Privatisation
GABON: Gabon Starts Privatisation
SOUTH AFRICA: Private Sector Invited to Support Education
    INDIA: Survey Shows Govt's Resolve against PSU Privatisation
TURKEY: Privatization Law Hampers Privatization
INDIA: Reinventing Government: Wholesale Privatisation is Not the Answer
PAKISTAN: Privatization Process Gains Momentum: Hafeez
MALAYSIA: Government Unhappy over One-sided Contracts, Says Najib

RUSSIA: Audit Chamber to Continue Privatization Analysis in Fall
EU: Commission Welcomes Industry-led Sustainable Chemistry Technology Platform
KOSOVO: Kosovo Renews Privatization Efforts, Names 13 Companies
GEORGIA: Privatization Process Takes Off
GEORGIA: 'Strategically Important Assets' and the Privatization Process
UZBEKISTAN: Uzbek Privatization Revenues Up 80% in H1
FRANCE: France Adopts Privatization Bill
RUSSIA: '05 Privatization Target Set at $1.4Bln

    OMAN: Macki Says Privatisation Drive Will Promote Growth
JORDAN: Civil Aviation Authority advances privatisation drive - Jordan
    BRAZIL:Brazil May Amend Terms of Private Partnerships Bill
CANADA: Health Minister Dosanjh Vows to Stem the Tide of Privatization in Health Care
USA: Manchin Proposes Grants, Public-Private Partnerships for Jobs
    HP calls for Closer Collaboration between Public and Private Sectors
UNEP and Investors Join Forces to Launch New Responsible Investment Initiative
Korea, Japan, China Agree on IT Cooperation<
World Bank Funds Ghana's Urban Water Supply Project
IMF Cautions India against Hasty Privatisation

Hong Kong E-government Programs to Focus on Customers

The future focus of Hong Kong's e-government program will be to put customers at the center of public service delivery so as to bring greater value to both customers and the government. This was highlighted in a new booklet on e-government published recently by Hong Kong's Commerce, Industry and Technology Bureau. Secretary for Commerce, Industry and Technology John Tsang said in the forward section of the booklet that the government had placed great importance on e-government work. "The reasons are three-fold," he said. "First, developing e-government allows us to improve operational efficiency and introduce service improvements to benefit our customers, through technology exploitation and service transformation." "Second, it is an effective way to drive the wider adoption of IT in the business sector and community. And third, it demonstrates the government's leadership role in promoting Hong Kong's international status as an innovative digital city," he said.The booklet outlines the achievements of the e-government project, in terms of program implementation and international recognition, since the release of the first Digital 21 Strategy in 1998. It also sets out the roadmap for the next wave of e-government development. "Our focus in the years ahead will be on understanding our customers, creating value based on what they need, driving utilization through creation of customer value and rationalizing channel management through a mutual realization of customers' and government benefits," Tsang said.  Enditem

From Xinhua, China, Xinhuanet, Hong Kong, 4 July 2004


Saudi Arabia Signs Agreement with UNIDO

Saudi Arabia has concluded a deal for Industrial Strategy and Future Vision for Industrial Sector until 2020 with the United Nations Industrial Development Organization (UNIDO). Saleh Bin Eid Al Husseini, Deputy Minister for Industrial Affairs at the Ministry of Commerce and Industry, represented the Kingdom in signing the agreement with Deputy Director General of UNIDO.

The Minister of Commerce and Industry, Dr. Hashim Yamani said the strategy, which will be prepared within 12 months, would be a comprehensive national document detailing Saudi Arabia's industrial strategy until the year 2020. According to the Minister, the strategy is aimed at strengthening the competitiveness of Saudi industrial sector, diversification of industrial base, improving quality and standards of industrial products, promotion of industrial investment and strengthening of industrial technology. The strategy will realize formation of a bloc of all the agencies and departments concerned with the industrial sector. These include Ministry of Commerce and Industry, Ministry of Economy and Planning, Ministry of Oil and Mineral Resources, Ministry of Finance, Royal Commission for Jubail and Yanbu, King Abdul Aziz City for Sciences and Technology, Saudi Arabian General Investment Authority (SAGIA), General Organization Technical Education and Vocational Training, Saudi Arabian Standards Organization, Saudi Industrial Development Fund, Saudi Authority for Industrial Cities and Technological Regions, and Council of Saudi Chambers of Commerce and Industry. Dr. Yamani said the strategy will be based on a major mechanism of complete coordination among government agencies as well as joint cooperation with the private sector. "This strategy would be a great stride in the history of the Kingdom's industrial development. Completion of the strategy will put Saudi Arabia on a clear path of realizing continuous growth and development aimed at doubling contributions of industrial sector to the gross national product," he said.The Minister also noted that the strategy is coming at a time when the Kingdom was successful in realizing several major steps toward promotion of industrial investments such as the formation of the Saudi Arabian General Investment Authority (SAGIA), and Saudi Authority for Industrial Cities and Technological Regions.He disclosed that the comprehensive industrial survey is nearing completion, and the non-petroleum industries are witnessing high growth. All these efforts will result in making the industrial sector the first beneficiary of E-Governance services. This will also be helpful in facilitating all the procedures for industrial investors, in addition to improving quality, enhancing productivity, competitiveness and realizing industrial integration.

From MENAFN, Middle East, 7 July 2004


Consumer Federation of America Cautions Regulators Against Undermining 'Next Generation' of the Internet

Open Networks Breed Innovation, Key to Internet's Success
The Consumer Federation of America(CFA) today presented a new framework for evaluating the importance of open communications networks to the success of the Internet. Federal Communications Commission proposals to abandon the requirement that advanced telecommunications be operated in a nondiscriminatory manner threaten to undermine the vibrant competition and dynamic innovation that the Internet unleashed. CFA will file the 110-page white paper, The Public Interest in Open Communications Networks, in nearly a dozen proceedings pending before the FCC and the Courts, proceedings that will affect the future of broadband communications. The paper argues for principles of open architecture and includes a 12-page Issue Brief that summarizes the full white paper.
In this paper, CFA cautions that policy makers seem to have lost focus of the fundamental importance of the open architecture principle. "FCC Chairman Michael Powell's vision of placing ultimate control of the network in the hands of the network owners has twice been rejected by the courts," asserted Dr. Mark Cooper, Director of Research for CFA. "Allowing network owners to discriminate against communications, content, equipment, or applications would be the death knell of Internet innovation." Many of the proceedings have the potential to completely reverse the basis on which the commercial Internet was founded. Rules established during the past 30 years building on the theory of open architecture are now being threatened. "For the entire history of the commercial Internet, the rules adopted in the FCC's Computer Inquiries ensured that the owners of telecommunications networks had to treat all developers of enhanced and information services fairly, and could not engage in strategic manipulation of access to the network to favor their own applications or prevent competition with their other services," Cooper said, "but the Commission is trying to reverse this remarkably successful policy." The white paper uses network theory to derive public policy principles that promote innovation and competition in the new digital communications platform. It applies the framework to major issues pending before the Commission:

* Title II obligations of cable modem (Brand X case and the cable modem. Further Notice of Proposed Rulemaking) and DSL (Wireline Proceeding) to provide interconnection and carriage on just, reasonable, and nondiscriminatory rates, terms, and conditions (pending in the cable modem proceedings);
* The classification of IP-enabled services as information or telecommunications service and numerous pending Baby Bell petitions for forbearance from regulation.

"The steadfast refusal of telephone companies and cable operators to negotiate commercial access to their broadband networks, on terms that treat unaffiliated Internet service providers reasonably, makes it clear that the public interest can only be promoted by requiring facility owners to operate open communications networks," Dr. Cooper said. "The future of the Internet hangs in the balance."The Issue Brief summarizing the report is available at:
The full white paper, The Public Interest in Open Communications Networks, is available at:
The Architecture of the Broadband Internet is About to be Decided. About a dozen court cases and rulemakings that are pending before the Federal Communications Commission and the Supreme Court will decide the public policy toward the architecture of the Internet in the broadband age.

Federal Communications Commission, Declaratory Ruling and Notice of Proposed Rulemaking, In the Matter of Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, Internet Over Cable Declaratory
Ruling, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable Facilities, GN Docket No. 00-185, CS Docket No. 02-52, March 15,2002.
Brand X Internet Services v FCC, 9th Circ. No. 02-50518, Oct. 6, 2003. Stay issued. Petition for cert by private parties filed. FCC and White House undecided.

Federal Communications Commission, Notice of Proposed Rulemaking, In the Matter of Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, Universal Service Obligations of Broadband Providers, Computer III Further Remand Proceeding: Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review - Review of Computer III and ONA Safeguards and Requirements, CC Docket No. 02-33; CC Docket Nos. 95-20, 98-10.
Federal Communications Commission, Report and Order on Remand and Further Notice of Proposed Rulemaking, In the Matter of Review of Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, Implementation of the local Competition Provisions of the Telecommunications Act of 1996,Deployment of Wireline Service Offering Advanced Telecommunications
Capability, CC Docket Nos. 01-338, 96-98, 98-147.
Petition for Reconsideration and cert filed by private parties. FCC and White House do not seek a stay or cert. Mandamus issued.

Federal Communications Commission, In the Matter of Section 271 Petition for Forbearance of BellSouth, WC Docket No. 04-48, March 1, 2004.
Federal Communications Commission, In the Matter of Section 271 Petition for Forbearance of SBC, WC Docket 03-235, Nov. 6, 2003.
Federal Communications Commission, In the Matter of Section 271 Petition for Forbearance of Qwest, WC Docket No. 03-260, Dec. 18, 2003.
Federal Communications Commission, In the Matter of Section 271 Petition for Forbearance of Verizon, CC Docket No. 01-338, Oct. 24, 2003.
Federal Communications Commission, Petition of SBC Communications Inc. for Forbearance Under Section 10 of the Communications Act from Applications of Title II Common carrier Regulation to "IP Platform Services, WC 04-29, Feb. 5,
Federal Communications Commission, Vonage Petition for Declaratory Ruling, WC Docket No. 03-211, Sept. 22, 2003.

Federal Communications Commission, Inquiry Regarding Carrier Current Sytems, Including Broadband over Power Line Systems, ET Docket No. 03-104, Notice of Inquiry, 2003.

Ongoing Enquiries
Federal Communications Commission, Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonably and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996.

Recently decided and still open to Reconsideration/Litigation
Federal Communications Commission, Petition for Declaratory Ruling that's Free World Dialup is Neither lecommunications Nor a Telecommunications Service, WC Docket No. 03-45, Memorandum Opinion and Order, Feb 19, 2004.
Federal Communications Commission, Petition for Declaratory Ruling that AT&T's Phone-to-Phone IP Telephony Services are Exempt from Access Charges, WC Docket No. 02-361, Oct. 18, 2002.

State Actions
Many states are looking at the status of VOIP. Two that have attracted attention are Minnesota (the first to go to court) and New York, the largest state to have taken a position to date.
Vonage Holding Corp. v. Minnesota Pub. Utils Comm'n, on appeal, In the Matter of the Complaint of the Minnesota Department of Commerce Against Vonage Holding Corp. Regarding Lack of Authority to Operate in Minnesota, Docket No.p-6214/C03-108 (Minn. Pub. Utils. Comm'n Sept 11, 2003)
Complaint of Frontier Telephone of Rochester, Inc. Against Vonage Holdings Corp. Concerning Provision of Local Exhange and InterExchange Telephone Service in New York State in Violation of the Public Service Law, NYPSC Case 03-C-1285, Order Establishing Balanced Regulatory Framework for Vonage Holdings Corporation (New York Public Service Commission May 21, 2004)

From PRNewswire (press release), Washington, by Consumer Federation of America, 13 July 2004



African Leaders Asked to Sign, Ratify AU, UN Anti-Corruption Conventions

The third annual summit for the African Union continued here in Addis Ababa this week with the Transparency International (TI), the leading international non-governmental organization dedicated to fighting corruption worldwide, calling on African leaders to sign, ratify and put in place structures that would allow effective implementation of the African Union and European Union's Convention on preventing and combating corruption. "Good governance is at the heart of the fight against poverty and economic underdevelopment," TI Chairman Peter Eigen said. "By tackling corruption, we can strike at the root cause of war, human rights abuse and poverty." He added: "The recent commitment made by Nigerian President Olusegun Obasanjo through the G8/Nigeria Partnership to continue to implement a comprehensive national anti-corruption strategy is commendable. We hope that President Obasanjo's tenure as AU chairman will be marked by the same anti-corruption zeal." "We urge governments to back their words up with action and ratify the AU Anti-Corruption Convention," said Muzong Kodi, TI Director for Africa and the Middle East, speaking from Addis Ababa.He continued: "By adopting the AU Convention, African leaders clearly demonstrated their commitment to the New Partnership for Africa's Development (NEPAD). But without the instruments being ratified and implemented, this commitment will be worthless. That is why we are urging African leaders to take advantage of the window of opportunity created by this summit and live up to their commitments."

The AU Convention was adopted in July 2003 and the UN Convention in December 2003. The backing of these instruments by African leaders is a strong signal of their recognition of the damaging effects corruption has had on national economies. This support is even more significant against the backdrop of the bold decision by African leaders to adopt and initiate a peer review mechanism as part of the monitoring process of NEPAD. An overwhelming majority of AU member states have yet to sign or ratify the UN and AU Conventions, though the implementation of these instruments at the national level is a key governance indicator as evaluated in the NEPAD peer review mechanism.At the time of writing, only 30 countries (Algeria, Benin, Burkina Faso, Burundi, Cote d'voire, Comoros, Congo, Democratic Republic of Congo, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Kenya, Lesotho, Liberia, Libya, Mali, Madagascar, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Senegal, Sierra Leone, Tanzania, Togo, Uganda, and Zimbabwe) have signed the AU Convention, while only three (Comoros, Libya and Rwanda) had ratified it. The convention requires 15 ratifications for its entry into force.

From All Africa, by Dagnachew Teklu of The Daily Monitor, Addis Ababa, 8 July 2004

State Resolute in Fighting Corruption

The Herald today publishes the full text of a speech made by President Mugabe when he officially opened the Fifth Session of the Fifth Parliament of Zimbabwe in Harare yesterday.

Mr. Speaker, Members of Parliament of the Republic of Zimbabwe, I welcome you all to the opening of the Fifth and this year's final Session of the Fifth Parliament of Zimbabwe. This Fifth Session takes place at a time of an ongoing socio-economic turnaround, a time of brighter prospects for our country. Regardless of what our detractors may be saying or doing, the relatively good agricultural season has given full play to our agricultural potential already enhanced by our land reforms. Except in those parts of our country which are traditionally susceptible to precarious harvests, we have, in the rest of the country, managed to reap a good harvest, certainly one good enough to ensure that we meet our needs and food requirements until the next season. What enhances this overall national food security is the evident revival of our economy. Even our most implacable critics have acknowledged this auspicious development predicated on national ingenuity, resources and effort. We will continue to take measures to ensure that we move towards full industrial capacity, by evolving strategies to revive factories and plants that had either closed down or have been working well below capacity. The far-sighted Productive Sector Facility introduced by a new-look Reserve Bank of Zimbabwe is an effort in this direction. All these efforts need a macro-economic policy framework, and Government, in consultation with key stakeholders, is currently working on one such, to cover the period from 2004 to 2006.

Mr Speaker, I have consistently exhorted the business sector to break the spell cast on them by colonial history, a spell that irrationally attaches them to the West for investments, imports, exports, loans and even for "best practices".This neo-colonial dependence syndrome has been our repeated ruin. Traditional business enterprises that have shaped and defined our thrust are, in the majority of cases, unambitious subsidiaries of major companies in South Africa, Britain and America, caught in a time warp and hopelessly hide-bound. Consequently, enormous possibilities presented by burgeoning Third World economic regions doing much better than the much vaunted, yet risky and even declining West, have escaped us.Happily, we have not gone too far down this path. We have halted the policy of blind privatisation, and the expectation is that our parastatals, once reformed and commercialised, and properly re-oriented, will be the cutting edge of our economic policy. I have urged parent ministries to give closer and tighter supervision to these vital units, ensuring at all times that accountability is fully met in ways that satisfy international accounting standards and the rigorous reporting calendar of the Zimbabwe Stock Exchange. I am happy that the Reserve Bank of Zimbabwe has now made proof of clean finances a precondition for any form of support from Government

Mr Speaker, agrarian reforms have claimed significant national resources. Presently, the accent is on enhancing our irrigation capacity and mechanising this crucial sector. The objective is to ensure the attainment of critical levels of mechanisation to guarantee productive efficiency in the agriculture sector.The past agricultural season has also shown that efforts at resolving questions of production must be matched by dynamic and responsive pricing policies, as well as by a coherent bid to develop local and overseas markets for our produce. Wrong pricing policies can induce "flights" from strategic crops such as maize, which is at the heart of our national food security. Plans for the summer crop should be mindful of these broad issues. We have to work with higher targets attuned to world markets. The revival of the Agricultural Marketing Authority (AMA) should be speeded up. AMA should help our agricultural planners in setting targets, crop-by-crop, possibly farmer-by-farmer, informed by existing demand, both national and international. Equally, it should help our planners determine the directions of investments and mechanisation in ways that tie them to specific products attuned to specific markets.Mr Speaker, a number of issues related to land reforms remain outstanding. The demand for land remains and the ongoing land acquisitions should be able to meet it. Let me emphasise that Government policy remains that of settling people under both the A1 and A2 schemes, the latter programme being fully commercial. Whatever irregularities have occurred in the process of land reform are now being attended to so they can get corrected. The Presidency is dealing with this matter and at the end of the exercise, some measure of justice and fairness will have been attained. The issue of security of tenure for those on the land is also being resolved, and a National Land Board will be established to preside over the administration and implementation of the land policy.

My Government will remain resolute in its efforts to eradicate the cancerous scourge of corruption in all its manifestations. In this regard, therefore, the Anti-Corruption Commission created under the Anti-Corruption Act will be constituted during this Session. The Commission will, inter alia, institute mechanisms to investigate and prosecute all established cases of corruption in both the public and private sectors. At the same time, the Zimbabwe Republic Police (ZRP) will embark on vigorous capacity-building programmes to enhance their investigating work. The Home Affairs Command and Control System, a public and private sector project to establish effective and efficient information technology systems in the majority of our police stations, will take off during this Session. To improve the housing situation affecting the Police Force, the ZRP will continue to intensify the existing housing programmes. The Audit and Exchequer Act will be reviewed to provide for the creation of a separate Public Financial Management Bill. The Bill will facilitate effective implementation of public sector reforms and minimise fraud and misappropriation of funds. The Mines and Minerals Act is being amended for purposes of streamlining and rationalising the acquisition and maintenance of mining rights as well as providing the guiding principles for the indigenisation of the mining sector. The Small and Medium Enterprises Business Bill, which should give fresh impetus to the development of the SMEs sector, will also be tabled during this Session.

Mr Speaker, investing in the youth is investing in our future. Those detractors bent on derailing this thrust are better advised that theirs is a forlorn hope. Our youth development programmes will continue to be revamped and rationalised all the time, a process which should be assisted by the establishment of the National Youth Council as the fulcrum for national youth development activities. On the basis of both the national debate and, of course, our experiences in running elections since 1980, Government is proposing far-reaching reforms to our electoral law. These proposed changes, which also take into account ongoing regional consultations on developing electoral norms and standards for the Southern African Development Community (Sadc), envisage the creation of an independent electoral commission as the principal player in running all our elections. Other changes proposed include reducing the voting period to a single day, as well as providing for the counting of votes to take place at polling centres. These proposed changes will need your collective deliberation and judgment so they become part of the law of our land.

Tourism remains one of the pillars of our economy. Through the Zimbabwe Tourism Authority, Government continues to intensify promotional efforts in the Asian markets. Already, statistics show an increase of 40 percent in arrivals from that region following the establishment of tourism promotional offices in Beijing and Kuala Lumpur.Government has formulated a policy on Land-Based Wild Life Management in conservancies and game ranches to facilitate, among other things, indigenisation of this lucrative sector. This has to be viewed as part of the broader and continuing programme to give our people control of the levers of economic power. An Empowerment Bill providing the framework for a more comprehensive and systematic Economic Empowerment and Indigenisation Programme shall be introduced in this House.
As a fellow African nation and a brotherly neighbour for that matter, Zimbabwe greatly rejoices over South Africa's successful bid to host the 2010 World Cup Soccer Finals. This development holds some potential for huge positive spin-offs for our tourism sector, and will no doubt uplift the continent's stature in the world of sport.The problems besetting the transport sector remain a great concern, more so given the sector's central role in the economy. As part of efforts to address the challenges, Government is refocusing the National Transport Policy, while new strategies are being pursued to speed up ongoing transport infrastructural development projects. In line with the Sadc Protocol on Transport and Communications and Meteorology, Government shall during this Session, amend the Road Traffic (Licencing of Drivers) Regulations to provide for a Sadc driver's licence, while new road traffic signs and signals similar to those of the rest of Sadc shall be gazetted.

Mr Speaker, my Government is fully cognisant of the importance of Science and Technology in the various processes of national development. It is for this reason that the Harare Institute of Technology shall be transformed into a full-fledged university with a technology thrust. This initiative will give added impetus to industrial research, innovation and technology transfer, thereby boosting the competitiveness of local industries and exports. A Bill to that effect will be tabled before this august House during this Session. However, it is always necessary to remain alert to the potentially negative flipside of Science and Technology. Accordingly, Government shall during the course of this Session, table in Parliament, the Cartagena Protocol on Biosafety; the National Biosafety Bill for the transformation of the Biosafety Board into a National Biosafety Authority; and the National Meteorology Bill for the establishment of national measurement standards. Apart from the safety aspects, the proposed legislative measures will help to enhance the competitiveness of the country's exports. Government remains keen on ensuring that the National Oil Company of Zimbabwe (NOCZIM) plays its strategic role more significantly. To cater for this and holistically address the needs of the deregulated oil industry, a Petroleum Bill shall be tabled before the House during this Session. Quite significantly, the Bill will seek to ensure that all players in the industry adhere to fair practices in terms of pricing, product quality, health, safety and environmental requirements.

Mr Speaker, non-governmental organisations (NGOs) must work for the betterment of our country, and not against it. We cannot allow them to be conduits or instruments of foreign interference in our national affairs. My Government will, during this Session, introduce a Bill repealing the Private Voluntary Organisations Act and replacing it with a new law that will create a Non-Governmental Organisations Council, whose thrust will be to ensure rationalisation of the macro-management of all NGOs. Government will also table the Zimbabwe Political Ex-Prisoners, Political Detainees and Restrictees Association Bill catering for the welfare of persons imprisoned, detained or restricted during the country's war of liberation and for reasons relating to it.

In the sphere of education, focus will be on raising the quality, competitiveness and utility of the country's education system. In this regard, the Zimbabwe Qualifications Authority Bill for the establishment of a National Qualifications Framework will be introduced in this House during this Session. The Qualifications Framework will, among other things, align all local qualifications to the Sadc Regional Qualifications Framework.A new Education Bill to enhance service delivery by the Ministry of Education, Sport and Culture; and a Zimbabwe Examinations Council Bill providing for the establishment of the Zimbabwe Examinations Council as the administrator of all examinations in Zimbabwe, will be introduced during this Session. I wish to point out that Government is determined to safeguard access to education as a basic right for every child. We will not tolerate any surreptitious attempts to make education the preserve of a privileged few.In the health sector, we continue to grapple with the challenges of massive brain drain owing to, among other things, concerns over conditions of service in the sector. The Health Services Board Bill, which seeks to create the Health Services Board for the purpose of determining appropriate conditions of service for public health workers, will be tabled in Parliament. This Session will also see amendments to the Family Planning Council Act, while a Food Safety Bill shall similarly be brought before the House. Concerning HIV and Aids, my Government's thrust is to step up efforts aimed at preventing its spread while simultaneously broadening access to anti-retroviral drugs.

Mr Speaker, the colonial era eroded the roles of our Traditional Chiefs as repositories of wisdom and justice, and systematically stripped them of their legal and moral authority in preference for foreign values and systems. In ongoing efforts to remedy these colonial transgressions, the Customary Law and Local Courts Act will be amended to increase the jurisdiction of Chiefs in customary law matters. It is also intended during this Session, to introduce amendments to marriage laws with a view to ensuring that, to the extent possible, all marriages enjoy the same legal status irrespective of the marriage regime chosen. Furthermore, the Criminal Law Code, which seeks to codify the common law of Zimbabwe concerned with non-statutory crimes, as well as the Security of Communications Bill meant to bolster the security of our Nation, shall be introduced in this House. As has been confirmed by the Transport and Communications Portfolio Committee of this House, the national television and radio broadcast transmission network is in a sorry state and stands in urgent need of comprehensive refurbishment and expansion. Resources will be mobilised to ensure that this is done.

Mr Speaker, at the continental level, it is gratifying to note that steps towards enhancing and consolidating Africa's integration under the auspices of the African Union continue to gather momentum. The inauguration of the Pan-African Parliament in Addis Ababa on 18 March this year marked a watershed in the conduct of inter-African relations. While enlarging her institutional capital, Africa must, however, remain vigilant in safeguarding her institutions against outside interference and insidious attempts to control them. The institutions must remain truly African so they can express her will and defend her interests. I am confident that this growing capacity will further the African agenda in the global context. In the wider international arena, my Government remains committed to meaningful collaboration with all peace-loving countries and peoples of the world, based on mutual respect and sovereign equality. We nonetheless remain patently opposed to the current mutant strain of imperialists who have arrogated to themselves the role of patrons of democracy and human rights, which they shamelessly trample upon in their pursuit of bloated self-interest.Those who only yesterday were our colonialists and for decades trampled upon our own rights as Zimbabweans have no human rights or democracy lessons to impart to us when we taught them these values through a protracted armed liberation struggle that cost us thousands of lives. To alleviate the current acute shortage of office space for Members of Parliament and officers, and in order to have a Parliament reflecting our history, personality and aspirations, plans are underway for the construction of a New Parliament Building in the Kopje area. A Technical Committee has thus been put in place to spearhead implementation of the project which is set to commence soon. Mr Speaker, Sir, I commend these matters for your consideration and now declare this the Fifth Session of the Fifth Parliament of the Republic of Zimbabwe duly open.

From, The Herald, 21 July 2004

Gambia: Corruption Commission Begins Hearings, Then Stops for Lavish State Celebration

Gambia's anti-corruption commission has begun hearings in the capital Banjul, with ministers publicly detailing how they paid for their cars, their wives' jewellery and the kitchen microwaves to the seven-member panel.The commission is part of President Yahya Jammeh's "Operation No Comprise" and has been billed as the first time a sitting African government is probing itself. Over the next three months, the commission, which is chaired by a Nigerian judge, will look into the assets of active and retired ministers and senior military officials during Jammeh's 10-year reign. But no elected member of parliament will have to appear and neither will the president.

Some Gambians are questioning what real impact the commission will have and are sceptical about the timing of the hearings. They started on Monday and adjourned just 24 hours later to make way for lavish celebrations to mark the 10th anniversary of Jammeh taking power in a military coup on 22 July 1994. Media reports have put the cost of the celebrations at 80 million dalasi (US$ 2.7 million). An official on the National Organising Committee told IRIN that a host of parades had been planned, as well as dinners for visiting heads of states. Special vehicles had been bought to ferry dignitaries around and the government was footing the bill for a nine-nation celebratory football tournament, the official added. He declined to confirm the total cost. "I think this is just a process designed to divert attention away from the president's current problems," was political analyst Ebou Sillah's verdict on the commission. "The economy is a shambles, good governance is in question and Gambians are finding it increasingly difficult to live," he told IRIN on Tuesday. Banjul resident Njundou Bah agreed, saying he didn't expect the commission's report would ever see the light of day. "A similar commission was set up to probe the affairs of former regime ministers soon after the 1994 coup but the report was never made public as promised, so why should we be optimistic about this one?" he asked. Meanwhile, Gambian newspaper The Independent criticised the president's exemption from testifying. "People would like to know how he was able to transform himself from a poor army lieutenant in 1994 to one of the richest men in the sub-region today," it wrote in a recent editorial. "Indeed if President Jammeh suspects some of his colleagues of dipping their hands into the pie, then he should know that unless he tells us the sources of his wealth, people would conclude that he is also doing exactly that," the daily continued.

But not everyone on the streets of Banjul was so critical of the new anti-corruption commission. "It will prove to all the doubters that President Jammeh is serious about tackling government corruption," Jalamang Susso, an unemployed youth, told IRIN. The commission started its hearings about two months after Baba Jobe, a one-time presidential aide and House Majority Leader, was imprisoned for economic crimes. These included his failure to pay import duties and other business taxes. At the end of last year Jammeh sacked his information minister, Yankuba Touray. No official explanation was given but intelligence sources linked the dismissal of Touray, who also served as tourism minister, to an alleged illegal land deal involving a site reserved for Gambia's tourism development. One of the first on the stand before the corruption commission on Monday was the current Communications Minister, Amadou Janneh.In his testimony, Janneh said he had put away about 50,000 dalasi ($US 1,700) in a savings account since he began working for the government in April and had bought US$ 50 worth of jewellery in Egypt for his wife. When asked about a house he was building in neighbouring Senegal, he said he had acquired the plot of land five years ago, well before becoming minister. "The financing of the building, which is now near completion, is coming from my wife in the USA," Janneh told the commission, adding that his refrigerator, microwave and generator had all been bought before he became minister for a total estimated cost of 11,500 dalasi (US$ 392). He said he had taken no personal loans from the government, explaining that his internet cafe and telephone centre had been set up with his earnings from 10 years of lecturing in the United States. "I have not helped any company to secure government contracts nor have I benefited from any contract awarded by me," the minister testified. Gambia's finance minister, sports minister and works minister also detailed their assets to the commission before it adjourned until next Tuesday.

From, Africa, 21 July 2004

Watchdog Group Urges Kenya to Cut Corruption or Lose Aid

In Kenya, an anti-corruption watchdog has urged the Kenyan government to seriously consider donors' demands to stamp out corruption as a condition of receiving aid. The donors are losing patience with corruption in Kenya. The director of Transparency International's Kenyan office, Gladwell Otieno, says it is not only the European Union and other donor countries, but Kenyans themselves who demand clean-up in Kenya's government. "I certainly hope that the government will respond to the issues raised because, as I say, these are being raised by the people as well as by the donors," Ms. Otieno said. I think the sad thing is that the government, which came into power on this overwhelming popular mandate has to be reminded of its responsibilities towards its own people by foreigners." At a four-hour meeting Wednesday with Kenyan President Mwai Kibaki and his Cabinet, EU officials urged the government to adopt specific measures to curb corruption.
They include prosecuting corrupt civil servants and politicians, public disclosure of major procurement projects, and the strengthening of anti-corruption bodies.

The European Union said, because of the recent corruption scandals, it will defer a $60 million aid package to Kenya until September, when it will review the progress the government has made in implementing anti-corruption measures. The freezing of EU aid is bad news for Kenya, which is facing a $10 billion budget shortfall this year and next. Analysts say President Kibaki is in a tight spot because implementing the anti-corruption measures may require him to fire some ministers, and that may erode his political support. The head of the EU delegation in Kenya, Gary Quince, says the European Union is not demanding the president fire any specific members of his cabinet. "We never discussed this morning the question of any cabinet minister being dismissed or resigning," he said. But Transparency International's Ms. Otieno says some ministers found guilty of corruption should be dismissed. "There is the question of political accountability, where people who are responsible for things which go on, you know, under their mandate are being asked to take responsibility for those things, so it's a very complex situation," Ms. Otieno said. Ms. Otieno says the time for the government to act is now because the donor countries and the Kenyan people are, in her words, in no mood to be fooled with half measures.

From, by Cathy Majtenyi, Nairobi, 22 July 2004

President Bingu Warns on Corruption

President Bingu wa Mutharika has vowed to prosecute government officials who have been involved in corruption. "Corrupt officials in government and parastatals will soon have no place to run to" said Mutharika on Friday when he officially opened the 16th Malawi International Trade Fair (MITF). "We will pursue them and we will make them answer, " said a calm Mutharika.In his inauguration speech in May this year, Mutharika pledged to root out corruption - a vice that state prosecutors say eats up a third of the country's national budget. Just this week, newly-appointed Director of Public Prosecutions Ishmael Wadi said former president Bakili Muluzi's cabinet swindled more than K10 billion of tax payers money through corrupt means. Mutharika said his administration will continue to pursue expenditure reduction measures to cut the domestic debt estimated at about K55 billion. Analysts say this debt burden is not sustainable. The President said for this country to reduce poverty, the economy needs low interest rates, a steady exchange rate regime and low inflation. "I If we achieve these, I am sure that both domestic and foreign direct investment will be stimulated, new jobs will be created, greater income distribution will result and hence poverty reduction will be achieved," he said. Malawi Confederation of Chambers and Commerce and Industry president Martin Kansichi asked authorities to instil in Malawians a culture of self-motivation and hard for work if government is to achieve its economic targets.

From The Nations, Malawi, by Ephraim Munthali, 23 July 2004

Act On Corruption, Kibaki Told

Pressure continued to mount on President Kibaki to act on corruption in his government. Mbita MP Otieno Kajwang' called him a stumbling block in the fight against graft. The looting of public resources by senior government officers, he noted, showed that the head of state had failed to live up to the mandate given him by Kenyans who voted him into office. "The President was elected by Kenyans with the express mandate to safeguard the Constitution, human rights and wealth, but he has taken care of none of these, making him a big let-down to his own people," the MP said. The President was to blame because he had refused to sack his officers mentioned adversely in questionable deals that had caused concern among the international community. "Some of his personal friends that sit in his Cabinet have been linked to corrupt deals, but nothing seems to worry him. He has instead put a shield round them and remained tight-lipped as these people ruin the country." Mr Kajwang' was addressing a fund-raising meeting in Kisumu town for the funeral of Pope Lawrence Pius Chiaji of the Legio Maria sect, who died last week. He was with Kisumu Town East MP Gor Sunguh and the sect's Cardinal Dean Mr Raphael Adika.porate other parties then he must consult widely wi A group of civil society leaders urged the President to resign if he could not sack corrupt ministers. They demanded stern action against people implicated in graft.

Under the auspices of Kenya Human Rights Network, they also asked foreign donors to withhold aid until action was taken. They told journalists outside Integrity House, Nairobi, the headquarters of the Kenya Anti-Corruption Commission, that President Kibaki must act decisively. "The honourable thing for the President is to confirm his impotence and resign so that we may elect a person capable of forming a cabinet that he or she will control," they added. Led by Mr Kang'ethe Mungai, the NGO officials said they would take to the streets on August 8 to press for the sacking of corrupt officials. Four MPs said the President risked losing Kenyans' support over corruption. Machakos Town's Mr Daudi Mwanzia, Mr Joseph Nyaga of Gachoka, Samburu West's Mr Simeon Lesirma and Mr Joseph Nkaissery of Kajiado Central urged him to sack all the implicated officials. They were speaking at Dalalekutul village in Kajiado Central constituency during a culture festival.
Speaker after speaker accused the Narc government of not fulfilling its pre-election pledges, including zero-tolerance on corruption. "If Mr Kibaki wants us to support him fully, he should sack the people around him who have been engaged in looting tax-payers money," Mr Mwanzia said. He accused the President of failing to act even after promising Kenyans that all the corrupt government officers would be dealt with according to the law. He said that councillors too had started looting. "Kama wakubwa wanapora na hawaulizwi, nao wadogo wao wameamua pia kupora mali ya uma bila kuogopa (If the ministers are looting without being questioned, their juniors have decided to loot without fearing)." Mr Nkaissery said Cabinet ministers had failed Kenyans who elected them by watching from their offices as the people died of hunger. Environment minister Kalonzo Musyoka called for the "naming and shaming" of people implicated in corruption.

"Investors' perception that the country is yet to root out graft has tarnished its reputation," he said, and called on Christians to pray for Kenya. "Corruption needs prayers as it spoils the reputation of the country. Let the culprits be revealed and shamed. We should not be a complaining nation. Everyday (in government) is saying: 'We are fighting corruption', yet we are stuck where we started," he said. Mr Musyoka was speaking to the faithful at Neno Evangelism Centre, Nairobi, during the its opening. Kinango MP Gonzi Rai also asked the President to sack corrupt Cabinet ministers. Addressing a meeting at the Kwale town's Jamhuri Park during the district's secondary and primary schools prize-giving day, he said the country should not be criticised just because of a few individuals.

From, Africa, by A. Odhiambo, T. Kago, P. Githaiga, P. Udoto and K. Mwatela of The Nation, Nairobi, 26 July 2004

Loopholes That Allow Corruption to Thrive

As the mystery of the Anglo Leasing scandal unfolds by the day, the question that is begging for answers is what is it about the government system that makes it so vulnerable to corruption and abuse? With every major revelation of grand corruption, fingers are pointed in all directions, with no one in authority taking the ultimate responsibility. Various laws including sections 48, 99 to 105 of the Constitution, the Public Audit Act, the Paymaster-General's Act and the Regulations (Cap 413) together with the External Loans and Credits Act (Cap 422), the Internal Loans Act (Cap 420) and the Central Bank of Kenya Act (Cap 491), give very specific details on public finance management. Critics say that all these laws vest too much power in the executive, especially the Treasury, without adequate checks from Parliament.
Studies by the Institute of Policy Analysis and Research (IPAR) and the Institute of Economic Affairs (IEA) show that glaring loopholes in the legislative framework have led to massive loss of public funds. Analysing the public finance system late last year, IEA researchers Albert K Mwenda and Mary Gachocho found huge defects in the government's payments system, which is now under the spotlight as ad hoc inter-ministerial committees are formed to seal perceived loopholes. A similar study by IPAR's Japhet Masya and Peter Njiraini on the budgetary process recommended that radical changes be made to stem the massive loss of public funds. An examination of reports and earlier studies give a clear indication of how the British envoy, Sir Edward Clay, arrived at the figure of Sh15 billion as the money lost in the past 18 months alone.

The Centre for Governance and Democracy 2001 survey revealed that the government lost more than Sh475 billion between 1991 and 1997. According to the survey, the money was lost through corruption, neglect, wastage and a 'don't-care' attitude by public officers. During this period, wasteful expenditure amounted to Sh69 billion, undelivered goods and services Sh39.8 billion, irregular payments Sh54 billion, un-surrendered or uncollected revenue Sh236 billion, and pending bills Sh77 billion. The figures came entirely from government records. The IEA report says that the situation has been aggravated by other factors such as the misallocation of public expenditure. The Anglo Leasing deals are just the latest example of off budget expenditure receiving priority. The old office of the Controller and Auditor General was blamed for the huge losses of public finances. Although the Constitution in section 105 states that the Controller is supposed to report to Parliament and ensure that all reasonable precautions have been taken to safeguard collection of revenue, and all money appropriated by Parliament has been disbursed for the stated purpose, the loss of money by the government has been the norm rather than the exception - and without consequence. Losses have been caused by changes in the Constitution over the years that effectively took power from Parliament and gave it to the Executive. For instance, the C&AG had to report to Parliament through the Ministry of Finance. This requirement usually led to delays in tabling the reports and, besides, it has always been feared that officials at Treasury tampered with the report before presenting it to Parliament. Expectations were high when the President assented to the Public Audit Act, which effectively repealed the Exchequer and Audit Act. The new law created the National Audit Office with more powers to act on any misappropriation even before the end of the financial year. But the new law still has the weakness that reporting is still done through the Ministry of Finance. In addition, it is the President and the Minister for Finance, not Parliament, who appoint all the top officials involved in public auditing.

From, Africa, by Gordon Opiyo of The East African Standard, Nairobi, 26 July 2004


Audit Mechanism Will Help Curb Corruption

The National Audit Office (NAO) is reportedly going to audit all central government offices, Communist Party of China departments and public institutions after it disclosed widespread misuse of funds by public institutions. Together with the latest audit report, this shows resolution and confidence to curb corruption and build a clean government. Until last year, the country's top audit body only audited departments and institutions of the State Council. On June 24, Auditor-General Li Jinhua stated in his report to the national legislature that abuse of public funds was found in 41 of the 55 ministries and commissions under the State Council. The revelation drew broad attention nationwide. Premier Wen Jiabao called on public institutions at all levels to draw lessons from the serious problems uncovered in auditing the 2003 central budget. While appealing for due punishments for all violations, Wen promised the State Council would give a special report on follow-up actions to the country's top legislature at the end of this year.

The next report should try to answer the following questions triggered by the audit crisis:
How can the internal auditing mechanism supervise the use of public funds?
How to find out and deal with the people who are really responsible for the embezzlements?
While NAO does its own job, who will serve as the watchdog for areas beyond its jurisdiction?
How can governance according to law be fully achieved?

The Law on Administrative Licensing just took effect last Thursday to regulate behaviours of governments and crack down on corruptions. The auditing and follow-up moves should show how it gets enforced. Now the audit department is reportedly enlarging its jurisdiction in order to better handle the growing workload. In addition to other mechanisms that are in place to oversee government performance, auditing, as an effective way to check corruption, should play a larger role.

From China Daily, by Goa Zi, 7 July 2004

UPFA Receives Massive Mandate against Corruption and Poverty

Media Minister Mangala Samaraweera said yesterday the people have once again approved the United People's Freedom Alliance's (UPFA) vision to take the country forward giving a massive mandate to the Government to implement its policies. Under President Chandrika Bandaranaike Kumaratunga, the Government will shortly implement a massive development process named "Yodha Sanwardana Sangrama" while taking stern legal action to curb bribery and corruption from grassroots level to the top using this clear people's mandate, Minister Samaraweera told a media briefing at the Sri Lanka Foundation Institute in Colombo. The Government will bring development to village level through this program stagnated during the past two years of the UNF regime. "Those in Parliament as well as the public should cooperate with this people's Government," Samaraweera said. The Minister said people have placed their utmost confidence in the Government at the Provincial Council election giving a one million majority to the UPFA. This clearly indicates that the people have again approved UPFA policies. The UPFA also obtained nearly 760,000 majority votes at the April 2 General Election which was also a record in recent political history.

Due to the complex situation created by the J.R. Jayewardene Constitution, the UNP hatched conspiracies against the UPFA Government without respecting the people's mandate. The UNP through its media mafia attempted to mislead the public saying the Government has not fulfilled its pledges given to the people, the Minister said. He said the Government has the majority in Parliament with 106 seats. But the UNP has only 85 seats. However, the UNP without accepting this reality, implied that they have a majority in Parliament by forming a Joint Opposition. The Provincial Council Election clearly shows who has the majority. The Minister said: "Except the 2001 General Election won by chance, Ranil Wickremesinghe is the only party leader in the world who has been defeated 13 times. This may be a Guinness record. Therefore he should immediately resign from his post allowing the formation of a people-friendly leadership in the UNP who can closely work with the Government." The Minister said the UNF Government through its 100 days program cheated the people giving them various false pledges. The UPFA Government during these three months has fulfilled a number of pledges in its manifesto. The Government has already given the fertiliser subsidy to the farmers while formulating a program for graduate employment. The Government has already stopped the vesting of lands in foreigners while taking action to vest Government lands taken over by UNP politicians. The Government has allocated funds for school uniform material. He said the Government also halted the UNF's attempt to privatise key state institutions such as the Port, CEB, State banks. "No Government has fulfilled such a large number of pledges during a short period." Meanwhile, the UNP has claimed that the Kollupitiya blast would mark a return to war. The election result has once again confirmed that the UNP could not deceive the people, the Minister said.

JVP Propaganda Secretary Wimal Weerawansa said after the April 2 General Election, the UNP launched a massive publicity campaign to create panic among public that the UPFA Government has not fulfilled its duties. To carry out this process, Opposition Leader Ranil Wickremesinghe appointed two Media Spokesmen. They divided their time and conducted press briefings daily. In addition, Wickremesinghe also appointed a National Organiser. "Various futile attempts were made by the UNP to win even the Central Provincial Council. The UPFA Government achieved this victory amidst these various attempts. The UNP, trying to cover the nakedness of their defeat, points out the nakedness of others and says the vote percentage has decreased. However, the people have completely rejected the UNP conspiracies," he said. UPFA General Secretary, Power and Energy Minister Susil Premajayanth said as a whole 55.5 per cent of voters have cast their ballot at the Provincial Council election. In certain areas in the Southern Province such as Matara and Hambantota, this percentage had increased to 62 per cent and 63 per cent. The UPFA won only two electorates in Badulla district at the April 2 General Election. At this Provincial Council election, the UPFA won all electorates including the Haputale electorate represented by Speaker W.J.M. Lokubandara. The UNP obtained 54,000 majority votes from Colombo district at the April 2 General Election. This time, the UPFA has won the Colombo district too. "We tell the UNP who cannot cover up the nakedness of its defeat and several private media institutions biased towards the UNP that the people have given a clear mandate to the UPFA to continue its progressive programs," he stressed.

From Daily News, Sri Lanka, by Uditha Kumarasinghe, 14 July 2004

'Governance in Dhaka riddled with corruption'

Governance in Dhaka is riddled with both high-level and petty corruption that is on the way up. Coordination among service-providing agencies in the capital is also unsatisfactory. These are some of the findings laid down by Prime Minister's Principal Secretary Kamal Siddiqui in his book 'Megacity Governance in South Asia', a comparative study of governance in five megacities of South Asia. The author has tried to look into the urbanisation trends, extent of city services and the major components of good governance in the five major cities - Dhaka, Kolkata, Mumbai, New Delhi and Karachi. He took into account four factors -- social capital-based informal governance, power structure, advocacy and internal resistance -- that hindered or fostered good governance in these megacities. It was an output of three-year effort of eight people, with the first year spent on data collection, the second on studying those and the third on writing the book. The co-authors are Archana Ghosh of the Institute of Social Science (ISS) of Kolkata, Sharit K Bhowmik of the University of Mumbai, Madhulika Mitra of the ISS Kolkata, Shuchi Kapuria of Delhi University, Jamashed Ahmed of National Institute of Local Government, Bangladesh, Nilay Ranjan of Jawaharlal Nehru University, India, and Shahih A Siddiqi, vice-chancellor of Ziauddin Medical University of Karachi, Pakistan. The formal launch of the book was held at the LGED auditorium yesterday afternoon, followed by a review session. Managing Director of Grameen Bank Professor Muhammad Yunus was the chief guest at the function chaired by Professor Nazrul Islam of geography department, Dhaka University. Prof Sardar Aminul Islam of the sociology department of Dhaka University, Prof Salaudin Aminuzzaman of public administration department and Dr M Matiur Rahman reviewed the book published by the University Press Limited. Professor Yunus, in his deliberation, questioned the plans and programmes of the officials to deal with the problems of megacity Dhaka. He also underlined the need for functioning of an "effective" local government. Co-authors Archana Ghosh and Madhulika Mitra were also present at the function.

From The Daily Star, Bangladesh, UNB, Dhaka 23 July 2004

Nine Anti-corruption Judges Named

Indonesia has named nine special anti-corruption judges to tackle rampant corruption long-blamed for discouraging badly needed foreign investment. A decree signed by President Megawati Sukarnoputri said three judges each will be appointed to a newly created corruption court and an associated appeals court. Three will also be assigned to the Supreme Court. The corruption court will hear cases filed by the country's new Anti-Corruption Commission. International donors have cited Indonesia's shaky and corruption-prone courts as a major disincentive to foreign investment. In the latest case the local unit of British financial services giant Prudential was declared bankrupt over an alleged debt to a former consultant, until the supreme court overturned the ruling in June. The Anti-Corruption Commission is already handling high-profile cases including an investigation into Abdullah Puteh, suspended as Aceh province governor during probe into an overcharging scandal over a Russian helicopter. A survey earlier this year by the Political and Economic Risk Consultancy showed that Indonesia is perceived as the most corrupt nation in Asia. The survey questioned foreign business executives about how they viewed the problem of corruption in the country where they worked. In 2002 a report by the private Indonesian Corruption Watch said a "judicial mafia" tainted the system with systemic corruption from top to bottom.

From Sydney Morning Herald, Australia, 29 July 2004


Duma to Ratify UN Convention against Corruption This Year - MP

The Russian State Duma lower house of parliament will ratify the U.N. Convention Against Corruption this year, the chairman of the Duma's anti-corruption commission told reporters on Monday. The chairman, Mikhail Grishankov, summed up the result of commission's work in the first half of the year and reported on its priority plans and tasks. According to Grishankov, the committee "is engaged in a constructive dialogue with leading federal ministries and departments, which participate in fight against corruption". He said "the commission considers its contribution to an early ratification of international agreements, and first of all the Convention Against Corruption, as one of priority tasks". The parliamentarian also stressed that his commission had come out in favour of restoring in the Criminal Code a clause on the confiscation of property from the people sentenced for acquisitive crimes. The commission brings together 15 deputies: ten from the United Russia faction, two from the Communist faction, one from the Fatherland faction, one from the Liberal Democratic faction and an independent deputy.

From ITAR-TASS, Russia, 12 July 2004


Russian Organizations to Crack Down on Corruption Together

The Anti-Corruption Public Union, the Union of Right Forces (SPS) and the National Anti-Corruption Committee signed a statement on Wednesday pledging to join their forces in countering corruption. Anti-Corruption Public Union president Georgy Satarov, secretary of he SPS federal political council Ivan Starikov and National Anti- Corruption Committee chairman Kirill Kabanov signed the document on behalf of their organizations during a news conference in the Interfax main office. This anti-corruption effort comes as a follow-up to a 1999 initiative, which led to the creation of the National Anti-Corruption Commission, Satarov said, adding that this measure has proved insufficient. "Corruption rates have been on the rise over the past four years. The corruption market in the higher education sector more than doubled in 2001-2002, overtaking healthcare as the most corrupt business. The traffic police service still ranks third in terms of corruption," he said.

From Interfax, Russia, 14 July 2004

Corruption in Russia: The Government Sees the Danger

A government official was arrested for bribe-taking. He had extorted $10,000 from a businessman by promising him vacant premises in his ministry. The Russian papers abound in such stories. However, President Vladimir Putin and parliament have set up special bodies to combat corruption, which is commonly accepted to be one of Russia's eternal woes, thereby inspiring the hope that there will be fewer such stories in the future. The Presidential Council for Combating Corruption and the State Duma Commission on the Counteraction of Corruption, were designed as kind of think-tanks that will coordinate efforts against corruption. However, Russia is not a paradise for bribe takers, although it is often depicted as such. It is somewhere in the middle of the list of the 133 most corrupt countries in Transparency International's annual report, which was recently published. Nevertheless, it is difficult to overstate the damage the diverse forms of corruption inflict on the Russian economy and people's morals. Russian officials receive a total of over $30 billion in bribes every year, according to the Moscow-based INDEM public foundation that studies the causes of corruption. Social analysts provide many reasons behind the high level of corruption in Russia.Corruption usually flourishes in transitional countries. Russia is experiencing more than just modernisation. The country is overhauling old government, economic and social institutions in the most radical way. However, it will take time to eliminate the legacy of authoritarianism. Many people unable to adapt to the free market environment and start their own businesses remain in the civil service. Old stereotypes are still strong among Russian bureaucrats who are opposed to transparency and have no respect for private property. They regard bribes, among other things, as a kind of compensation for what they view as a lack of success. High business risks are yet another cause of corruption. Some businessmen are still after quick and great profits, the philosophy that prevailed in the business community in the 1990s. Besides, they do not feel the state's support and therefore seek to secure certain functionaries' support. Corruption is the shortest road to handsome revenues for business people of this mindset. The considerable gap between the salaries paid to managers at public sector enterprises and those at private firms is yet another reason for corruption. The former take bribes to make up for their low salaries.

There are many more reasons prompting Russians to offer envelopes under the table to government officials, policemen, and even judges. However, the Russian government has decided to launch a systematic, long-term campaign against corruption. This evil cannot be eradicated completely. Some experts even believe that it should not be. "Moderate" corruption is a useful signal pointing to weak spots in national legislation just like pain indicates an illness in the human body. The Duma Commission on the Counteraction of Corruption has begun work by improving the relevant legislation. Russia has signed the United Nations Convention Against Corruption and the European Criminal Law Convention on Corruption, but it has not brought its national legislation into compliance with these important documents to date. The requisite efforts are gaining momentum today. The Duma intends to amend laws dealing with the government's transparency, government officials' accountability, their duty to declare their business interests, and other anti-corruption essentials.

The Duma has already adopted a bill on parliamentary inquiries in its first reading. A draft law on witness protection will be considered in late July and is likely to be adopted, while a law on confiscating property for profit-motivated crimes, which was hastily removed from the Criminal Code last year for unknown reasons, has been revived. An anti-corruption mechanism has been introduced that will allow expert legal analysis to identify ambiguously-worded acts and those that are all but impossible to implement, which thereby provoke bribery in officialdom. The Duma commission has received hundreds of letters from business executives and ordinary Russians reporting instances of bribery and forgery, and other illegal acts. Deputies check the letters and file the relevant inquiries with prosecutor's offices. The commission, therefore, is going some way to compensate for the lack of public control over the authorities that is only detrimental to Russia.

From, Russia, 22 July 2004

Russian Interior Ministry calls for Crackdown on Corruption

MOSCOW - A Russian Interior Ministry official called for limiting presumption of innocence in corruption cases, as the incidence of such offenses in the country increased. Acting head of the control and methodological department of the Interior Ministry's Investigation Committee Sergei Manakhov told reporters Tuesday some 15,000 people in Russia were convicted for corruption each year. The number of such offenses increases each year. Russia reported 72,800 crimes of corruption in 1999, compared with 82,000 such crimes last year, Manakhov said. Law-enforcement bodies have reported 19,200 corruption crimes this year, in which 1,900 people have been held responsible, he said. In his view, it is necessary to amend the legislation, in order to fight corruption more effectively. The Interior Ministry has already submitted a number of proposals to the State Duma, envisioning a tougher penalty for corruption. In particular, the Ministry seeks more severe punishment for reoffending in corruption cases. According to Manakhov, it is also necessary to limit lawmakers' immunity from criminal persecution and lift the restrictions in investigations against prosecutors and judges. A special federal law should spell out a procedure for checking the persons aspiring to jobs of civil servants, he said.

From ITAR-TASS, Russia, 27 July 2004

Politicians Warned Not To Be Complacent about Corruption

The chairman of the Oireachtas watchdog on ethics said yesterday that Ireland's record on corruption in public office left "no room for complacency". High Court judge Matthew Smith said that he was satisfied that we do not have a major problem with corruption. However, he warned the latest Transparency International corruption index still showed that we were perceived "as being more corrupt than a number of member countries of the EU and, indeed, others who are our trade competitors". His introduction to the annual report of the Standards in Public Office Commission for 2003 intimated that the trustworthiness of our political leaders was a major issue. "Trust in our leaders and in the institutions of the State is the bedrock on which our parliamentary democracy is founded. "Rebuilding that trust should be seen as an urgent priority and should be led, in words and actions, by those whom we elect, whether at local or national level," Judge Smith said. He added we had reached a stage in this country where it was no longer acceptable to merely aspire to meeting the requirements of openness, accountability and transparency. "As the work of the tribunals continues there is need for reassurance that events which are being investigated and information which is being revealed are confined to recent history and that resonances of same are not to be found in our current public administration," the judge added. The report also refers to the tax clearance obligation for Oireachtas members, which was implemented for the first time at the time of the 2002 General Election. In this context, it gives an account of the position of Limerick West TD Michael Collins who is being investigated over the documentation he supplied. It also highlights that delay on the part of the Minister for Finance in bringing up to 250 state-sponsored bodies within the scope of the Ethics Act. The report also gives detailed breakdowns of political party spending and funding. Fianna Fail received the largest amount in donations during 2003, a total of €275,000 from 196 donors. The Labour Party was next, receiving slightly over €50,000 while Fine Gael received a modest total of €25,000.

From (Subscription), Ireland, by Harry McGee, 28 July 2004


PNP Code of Ethics a Good Move

The publication of a code of ethics to be adhered to by the contestants for the leadership of the People's National Party is a significant development by that party. Well ahead of the election the aspirants know what the rules are, which should mean that at the end of the vote no one should be able to claim that he or she was unaware of the parameters of the process. The possibility of a credible claim of a flawed election will likely be reduced, if not eliminated. Indeed, candidates still have time to address aspects of the code which they may deem not to be in their interest. We are particularly in support of two elements of the code, both relating to financing. The proposal for a limit on campaign spending, we think, is useful for its likely effect of neutralising the impact of money in the election campaign. Choosing a leader of a political party, who is also to be leader of the government and country is serious business. Those who make that decision should do so fully aware of the impact of the consequences of their action and with a clear appreciation of the strengths that the person they chose will bring to the job. Choosing a leader, therefore, ought not to be like selecting a glitzy package from a shelf. It demands far more substance than an image-maker's handiwork.

The election of the PNP's, and very likely Jamaica's next leader - even if only for a time - should not be primarily based on the capacity of this or that candidate to fund advertising and promotional campaigns or to finance other collateral activities to entice delegates. Indeed, such a serious process ought not to be resolved like a spectacle. In that regard, placing a cap on spending by individual candidates should help to even out the playing field. Candidates, hopefully, won't be able to buy their way to leadership. Hopefully, too, others won't be able to buy the candidates. Indeed, we support the admonition that aspirants should know their donors, lest some of those donors be of the type whose activities are outside the pale of legality and who would seek to buy political power by controlling politicians. But it is not only those who are involved in illegality against whom the process should guard. Political leaders have also to be careful lest they become beholden to any particular interest, who may seek to cash in that obligation to the detriment of the wider society. The suggestion, therefore, for limits on the contributions of individuals and entities to the campaign is, to our mind, eminently sound. Now that the PNP has set out the rules by which it will manage its transition, we look forward to a similar approach by the Jamaica Labour Party whose leadership change will happen ahead of the PNP's. Clear rules will help to eliminate some of the squabbling in the party. And it would be definitely good for democracy.

From Jamaica Observer, Jamaica, 27 July 2004




International Congresses Tackle Governance Issues

TThe International Institute of Administrative Sciences is holding its 26th International Congress in a joint effort with International Association of Schools and Institutes of Administration through July 18 at COEX Convention Center in Seoul. The 2004 Seoul IIAS-IASIA Joint Conference kicked off yesterday to discuss the themes of "E-governance: Challenges and Opportunities for Democracy, Administration and Law" and "Building Leadership for Modernization and Shared Governance," respectively. The annual meetings organized by IIAS bring together about 400 participants from more than 60 countries providing an opportunity to analyze current issues on an international level.

This year's congress is hosted by Kim Pan-suk, Secretary to the President for Personnel Policy at the Office of the President in Korea, with the assistance of a team of rapporteurs from other regions. Kim will launch the separate IIAS congress with an opening speech tomorrow on "Development of Democratic e-Governance in Cyberspace and Shaping e-Governance for Quality of Life." Four workshops have been scheduled for July 15-17: "Effects on Civil Society, Transparency and Democracy" hosted by Olli Maenpaa, professor of administrative law at University of Helsinki; "Changes in Administrative Structures and Processes" by Shunichi Furukawa, professor of government and public administration at University of Tsukuba; "Perspectives for Countries in Transition and Development" by Gordon M. Draper from Mona School of Business, University of the West Indies; and "E-governance and the Evolution of Law" by Herbert Mais, Conseiller d'Etat at the Conseil d'Etat.

IASIA's annual conference is held in different regions each year, providing more accessibility to members and this year, Guido Bertucci, Director of the Division for Public Administration and Development Management, Department of Economic and Social Affairs of United Nations, is the General Rapporteur. There are six working groups, July 13-14, for the general conference: Education and Training Program; Aligning Missions and Quality; State-market Partnership and Enterprise Management; Public Sector Reform: People in the Public Service; Local Governance and Development; Accountability, Culture and Trust; and New Tools for Public Financial Management. For more information, visit the Web site at

From Korea Herald, South Korea, by Hwang You-mee, 12 July 2004


Global Center Established to Recognize Business Ethics, Leadership Qualities

Laureate Award & Medal Series Also Unveiled
KPMG International, the global network of professional services firms, today announced the establishment of the Global Center for Leadership & Business Ethics, an independent entity designed to recognize those individuals who exhibit extraordinary business ethics and leadership qualities. "The Global Center is being founded on the conviction that leaders are defined by their actions, and that those individuals who exhibit exemplary business ethics should be recognized and honored," said Mike Rake, chairman, KPMG International. "Indeed, spotlighting leaders who embody the very best in business ethics is a tangible way of recognizing and rewarding principled personal behavior and responsible business practices."

The establishment of the Global Center closely follows the announcement last week that KPMG International had been named the Global Founding Partner of the Nobel Peace Center in Oslo, Norway. "As a demonstration of our fundamental commitment to the principles of leadership, integrity and ethics, KPMG is serving as a catalyst to establish an independent entity, the Global Center, that will recognize those business leaders who reflect the attributes of accomplishment and innovation," said Gene O'Kelly, chairman and chief executive of KPMG LLP, the U.S. member firm. O'Kelly further explained that the separate role of Global Founding Partner of the Nobel Peace Center -- in combination with the creation of the independently operated Global Center -- as well as the Laureate & Award Medal Series comprises the "Global Initiative on Leadership & Business Ethics."

"One of our highest priorities at KPMG is leading the restoration of credibility to the accounting profession," said Timothy R. Pearson, vice chair, marketing and communications, KPMG LLP. "The Global Initiative is inspired by the spirit of the Nobel Prizes and the principles and guidelines of the Nobel Foundation and the Norwegian Nobel Committee, and is aimed at recognizing outstanding business leaders." The Global Center will manage and administer the nomination process for the Laureate Award & Medal Series, which will honor those who are committed to excellence in business ethics. The processes, governance and nomination of the Laureate Award and Medal Series are modeled on Nobel.
* The Laureate Award will honor a leader who best exemplifies business ethics and who has shown his or her commitment to excellence. In addition to the Laureate Award, medals will be awarded for Leadership, Corporate Governance, Reporting & Disclosure, Social Responsibility and Education.
* A Chairman for the Global Center will be appointed shortly, and a call for nominations for the Laureate Award & Medal Series will follow. Winners will be determined in November and the awards will be presented in December the same week that Nobel prizes are given.

From PRNewswire (press release), New York, 13 July 2004

U.S. Says Development Bank Corruption 'Intolerable'

WASHINGTON -Corrupt use of World Bank and other development bank assistance is "intolerable," and more work is needed to root out abuses, a top U.S. Treasury official said on Wednesday. John Taylor, treasury undersecretary for international affairs, told a Senate committee the United States is seeking greater incentives for development banks to help track the flow of their funds. "If the flow of money is tied to concrete and measurable results, the chance of diverting (multilateral development bank) resources for corrupt purposes will be lowered considerably," he said in prepared testimony before the Senate Foreign Relations Committee.In May, the Senate Foreign Relations Committee heard testimony that corruption at the World Bank may top $100 billion, though a bank spokesman disputed the estimate. Taylor on Wednesday praised recent anti-corruption measures adopted by the World Bank and regional institutions like the Inter-American Development Bank, Asian Development Bank and African Development Bank. He said the banks need to tighten procurement policies, improve staff education and strengthen whistle-blower policies to ensure transparency in their lending and other operations.

From Reuters, 21 July 2004

World Bank bars Canada's Acres for corruption

WASHINGTON - The World Bank on Friday said it blacklisted Canadian engineering groups Acres International for three years for corruption in a massive bank-financed dam project that will transfer water from Lesotho to South Africa. Acres, bought in June by design firm Hatch of Mississauga, Ontario, will be barred from receiving any new bank-financed contracts for the next three years. Acres is the largest companies to be sanctioned by the World Bank, which is under pressure by shareholders like the United States to root out misuse of money it spends for global development projects in poor countries. Acres has already been prosecuted in the tiny African kingdom for bribing Masupha Sole, the former chief executive of the Lesotho Highlands Development Authority, who was convicted in 2002 of corruption and sentenced to 15 years in jail. The bank's move does not affect existing bank contracts with Acres, which includes projects in the West Bank and Gaza, Ghana, Ethiopia and Tanzania worth around $2.3 million. "The World Bank's sanctions committee found that Acres engaged in corrupt activities for the purpose of influencing the decision making of the then chief executive of the Lesotho Highlands Development Authority, the implementation agency of the LHWP," the bank said in a statement. Acres said in reaction it was "deeply disappointed" at the World Bank's decision. "The events in Lesotho occurred 10 to 15 years ago," and Acres has responded to these allegations over a five year period, the company said in reaction. "We have already moved on by implementing corporate compliance measures that include strict guidelines about those with whom Acres will work and how Acres engages and supervises contractors, employees and representatives," it added. The bank said Acres won significant contracts for technical work for the $8 billion Lesotho Highlands project in 1987 and 1991. The project, the result of an agreement signed in 1986 with South Africa, will redirect Lesotho's abundant water resources to South Africa's industrial heartland in Gauteng province through an elaborate network of dams.

From Reuters, 23 July 2004

Making Progress in Corruption Fight

The problem about corruption is that it is a moving target. What is "corrupt" today was permissible yesterday. Standards change. My own country is sanctimonious today but some of history's greatest corruption took place on the road to industrialization there - in the U.S. A great senator once stood up in the Capitol and demanded that his coffers be "replenished." Some people argue that once countries are rich, corruption will go away. True -- but the rate at which national wealth is obtained depends mightily on the amount of corruption. It's like population growth: Family size comes down when countries become rich, but absence of family planning ensures that wealth comes late. You can explain why Thailand is twice as rich as the Philippines by population programs alone. There are, arguably, four levels of corruption, and it bears consideration whether a country can concentrate on all four at once. At the bottom and top the answers are easy. "Tea money" or small scale corruption is present everywhere in poor societies and no one has ever found a way to prevent it, beyond getting rich. At the other end of the scale is the macro-corruption where leaderships change the whole national economic rules to enrich themselves and their families. Inevitably, the country becomes impoverished. Indonesians know all too well about this one. The minute you distort the macro-economic rules for your personal benefit you have introduced the highest form of inefficiency and the greatest market distortion possible.

But there are two kinds, or levels, of corruption that bear some thought, where perhaps middle-income or lower middle income countries can put emphasis. The second level is political corruption, and it is present everywhere and probably always will be: Rich people subsidize election campaigns in hopes of favorable treatment, companies give generously to politicians who can pass beneficial tax laws benefiting them. But it makes a great deal of difference how much they can give, and whether it is transparent. At the very least, parliaments can pass laws imposing stiff penalties for non-transparent political contributions. They can limit the amount anyone can give. Of course there are ways to get around this: Get all your children to support your candidate. But it becomes more difficult. The third level is the one where perhaps the greatest good can come from real reform, in a rapidly growing society like Indonesia's. Here we have the kind of dirty deeds everyone hears about: Generals taking a percentage from military purchases, politicians getting a cut from NGOs or AID-giving organizations. Big sums change hands.

In Thailand the phrase "unusually rich" was devised to describe what was an inappropriate amount of new wealth to have garnered from service in government - and the amount was about Rp300 billion. Anything below that in the 1990s was tolerated. Now the lines have been drawn at lower levels. The moving target again. This kind of corruption doesn't wholly distort the economy and subvert it in itself. But it hardly aids civic spirit for hard-working citizens to see political leaders getting rich. So cynicism about politics spreads. And who any longer wants to invest in a country where the deals are done under the table rather than on top? You don't know where you stand with the former and you are always under threat - that greedy hands will reach out as soon as you have demonstrated the ability to generate economic growth. And this form of corruption destroys personal virtue. It seems okay because "everyone is doing it". A "friend" pocketed about eighty million rupiah from me, out of a simple financial transaction in which he was supposedly helping me. Nothing so awful had ever happened in my experience, but people hearing of it hardly grew in their respect for the country. Every time a palm goes out at customs, the country's reputation takes a hit. Someone should take down names and send them in. Heads should roll. Why should the future hold anything different for Indonesia? If elected will Susilo Bambang Yudhoyono fall prey to the same temptations? Maybe - but maybe not.

In the Philippines a man of similar background, Fidel V. Ramos, became president in 1992 and ushered in the cleanest period of his country's politics ever. And mirabile dictu, investment poured in and economic growth soared. Ramos is held in an awe that corrupt money can't even begin to buy. Susilo can do the same and the results would no doubt be the same. There is the additional point that the public clamor for a clean-up is powerful today. The moving target is moving upwards. Pressure to end corruption comes from all sources. A new - or reelected - president could find sources of power in clean politics that would astonish and galvanize. The enormously successful, and largely clean, elections give a huge impulse to continue the reform - and catapult Indonesia from near the bottom of the list of the world's countries at least to middle levels within a very short time indeed. The makings are there, the incentives are there, and the country deserves nothing less.

From Jakarta Post, Indonesia, by W. Scott Thompson, Sukawati, Bali, 23 July 2004


Premier Tells Civil Servants to Get Act Together

BISHO - Eastern Cape Premier Nosimo Balindlela yesterday declared war on laziness, administrative apathy and financial chaos in her government. Pre-dawn meetings, spot checks on departments and a Big Brother-type facility for monitoring spending are among plans for tackling problems. At a press conference yesterday, Balindlela said an executive council meeting this week revealed levels of weakness and inefficiency in Bisho that were "unacceptable". In the area of HIV-Aids, for example, departments were either duplicating services or programmes were not linked and this weakened the government's strategy of an "integrated" approach to the disease. A slack attitude among government officials was also a concern, with the general work ethic remaining at "worryingly low levels", mostly owing to lengthy disciplinary processes. Effective management of finances, documents and general performance - particularly in the provincial treasury and Premier's Office - were also challenges, she said. Balindlela's solutions included continuing her "random follow-up" meetings and requests for regular departmental progress reports, her unconventional 4am meetings and the appointment of a deputy director-general to specifically focus on implementing government policy. Commenting on her sunrise indabas, the premier said she wanted to scrap a "rule-bound" culture by focusing on results - even if that meant rising early. Customer care units would be set up in all departments and a facility installed in the Premier's Office for monitoring departmental spending, particularly in "priority programmes" such as HIV-Aids. She admitted that politicians were partly to blame for the challenges currently facing the Bisho administration, because at times politicians made wrong decisions. - DDC-DDR

From Dispatch Online, South Africa, 16 July 2004

Civil Servants Go to Court Over Deductions

Over 1,000 civil servants have filed a suit at an Accra High Court against the Civil Servants Association (CSA) and two state departments for their alleged involvement in the continued unlawful deduction of one per cent of Civil Servant's monthly salaries. The departments are those of the Attorney General and the Accountant General. The plaintiffs are seeking a perpetual injunction restraining the Accountant General's Department from making any further deductions from their salaries, and a second perpetual injunction restraining the CSA from accepting, receiving or disbursing such deductions. They are also seeking a court order, directed at the CSA executive requiring it to account for any money it has received since 1993 by way of dues or salary deduction from its members, plus costs. Mr. Edward Kumi of Accra, who swore the affidavit on behalf of all the aggrieved Civil Servants, claims that CSA, whose membership comprises all civil servants in Ghana, was floated as a company limited by guarantee, with objectives that include securing better conditions of service for its members and protecting their interest.

From GhanaWeb, Ghana, 15 July 2004

Tanzania: Focus On Pay Increases for Civil Servants

Dar es Salaam - The Tanzanian government has raised the salaries of civil servants by between nine percent and 12.5 percent in its 2004/05 budget, but workers say the rises are not keeping pace with expenses. "Most civil servants can hardly survive from pay check to pay check even after the salary increase," the secretary-general of the Tanzania Federation of Free Trade Unions, Nestory Ngulla, told IRIN in an interview. Tanzania is one of the poorest countries in the world with more than half of the population living on less than US $1 a day. Nancy Kimaro is a 31-year-old primary school teacher in Tanzania's commercial capital, Dar es Salaam. She earns a monthly salary of Tshs 68,000 ($68). She has to sell buns to her pupils and teach two tuition classes every weekend to make ends meet. "I pay a monthly rent of Tshs 30,000 for my house, spend Tshs 15,000 for my transport and Tshs 10,000 for nursery school for my daughter, and that eats up about my entire salary. Where do I get the extra money for food and medical expenses?" She asked. "I am a single mother and have a five-year-old daughter to take care of. My daughter and I will continue living from hand to mouth even with the new salary increase."

Pay rise inadequate
Trade union leaders echo Kimaro's concerns, saying the salary increase for civil servants announced by the Tanzanian government is too small to make any positive impact in the lives of lowly paid public servants. "This is just peanuts, there is no way civil servants at the lower end of the salary scale can meet their basic needs with these types of salaries," said Ngulla. The salary increase meant that the minimum monthly salary for civil servants have been raised from around Tshs 55,000 to Tshs 61,000. On the other end of the spectrum, the monthly salary of the highest-paid civil servants had also been raised, from around Tshs 800,000 to over Tshs 1 million. "We had initially recommended to the government that the minimum salary for civil servants should [be] Tshs 139,000, but later agreed to compromise for Tshs 65,000," Ngulla added. "However, the government has let us down by increasing the minimum wage to just Tshs 61,000, while we had in fact all agreed to settle for Tshs 65,000 as the mutually acceptable figure." Ngulla lamented the gap between the lowest- and highest-paid civil servants in the country, describing the situation as "unacceptable."

Need for overhaul of pay structure
"The whole salary structure for civil servants must be overhauled to reduce the gap between those at the top and those at the bottom of the salary scale. The government must also ensure that workers are paid according to their performance," he said. He added: "Teachers, nurses, doctors and policemen are all complaining that their salaries are woefully low; it's only the politicians who seem to be smiling all the way to the bank at the end of every month." Ngulla vowed to mobilise trade union leaders to pressure the government to improve the salaries of civil servants and reduce the gap between minimum wage and top public servants. "There is a tendency of politicians paying themselves too much money, like what our members of parliament are doing at the expense of the majority of civil servants like teachers who are poorly paid," he said. Tanzania's Minister of State in the President's Office responsible for Civil Service Management, Mary Nagu, announced in parliament recently that the government would continue with reforms to ensure that Tanzania had an efficient public servic

Plan to improve civil service
President Benjamin Mkapa in 2000 launched the country's 12-year programme aimed at boosting the efficiency of the civil service. He said the Public Service Reform Programme 2000/2011 (PSRP) demanded not only changes of structures, systems and work environment, but also changes in culture, attitudes and behaviour of public servants. The overall objective of the programme was to achieve a "smaller, affordable, well-compensated, efficient and effectively performing civil service".
The programme has so far been implemented in two phases. The first involved restoration of the structural preconditions to support fiscal stabilisation measures, including the removal of ghost workers, staff retrenchment, rationalisation of the pay and grading system, and reinstatement of establishment and payroll controls. The second phase deals with institutional improvements, including a redefinition of the role of government, restructuring for organisational effectiveness and efficiency, outsourcing certain services, decentralisation of service delivery, and managerial capacity building. The government has also reduced the number of civil servants by approximately 27 percent from about 355,000 in 1992 to 260,000 in 2004. Recruitment was also encouraged into certain key sectors such as education, health and law.

Critics of the programme say that although the government has taken important steps towards restructuring its civil service, little progress have been made in revamping pay and promotion policies."Let's face it, salaries for civil service jobs in the country are just too low even with the new salary increase," Ngulla said.

From, Africa, UN Integrated Regional Information Networks, 20 July 2004


Civil Servants Issue Strike Notice

Civil servants countrywide braced themselves for a national strike after the Civil Servants Union issued a 21-day mandatory strike notice yesterday. This follows the collapse of salary hike and retrenchment talks between the Government and the Union on Tuesday evening. Secretary General Alphayo Nyakundi yesterday declared the talks dead and put the Government on notice. "We have exhausted all the channels for dialogue. Our patience has run out and it appears the only language the Government understands is confrontation, which we were avoiding," said Nyakundi. The union, which has been negotiating with the Government for the last two years, wants a 600 per cent salary hike for its members and an end to retrenchment.The least paid civil servant earns Sh2,580, which is below the Government's statutory minimum wage of Sh4,000.Nyakundi was accompanied at the press conference by the chairman John Cheruiyot, Treasurer Dr Agnes Kilonzo, organising secretary Ali Mohammed, among other officials.

Nyakundi said the notice is effective August 1, if the salaries are not in their July pay slips. "The mandatory 21-day notice will be effective on August 1, for the national strike if new salaries are not reflected in July pay slips," said Nyakundi. Nyakundi activated their 74 branches countrywide and put them on alert. Nyakundi advised civil servants against filling redundancy forms being "peddled" by the Government. "They will be sounding their own death knell. They should not sign those bogus circulars," he warned. He showed the press a letter signed by Titus Ndambuki on behalf of the Permanent Secretary in Office of the President, directing heads of departments to distribute retrenchment forms to their subordinates.The letter states in part that: "The targeted voluntary early retirement scheme has been declared as retirement under re-organisation/ abolition of office. The application forms have therefore been designed to comply with existing provisions of Law."

From, Africa, by Andrew Teyie of The East African Standard, Nairobi, 22 July 2004


Unveiled: Pay Rise for Civil Servants

The Government yesterday announced a pay rise for its 130,000 civil servants, only five days after their union issued a notice for a national strike. Labour minister Newton Kulundu, who did not divulge details of what the Government will offer its workers, only said the new salaries would be backdated to July 1. Last week, the Kenya Union of Civil Servants issued a 21-day strike notice, effective from August 1, 2004, to press for a 600 per cent salary increase. The strike followed a meeting on July 20, 2004 chaired by Permanent Secretary and Director of Personnel Management Simon P. Njau, which ended in a deadlock. Yesterday, Kulundu did not indicate whether the civil servants would get the entire 600 per cent raise they are demanding, but only said; "I assure Kenyans that what we have promised to the union is being worked upon and their salary will be backdated to July 1, 2004." The lowest paid civil servant at Job Group A earns Sh2,580 a month while the highest unionisable employee at Job Group R is paid Sh28,435. An increase of 600 per cent would see these figures dramatically rise to Sh16,228 and Sh167,198 respectively.

It would be the highest pay increase for public workers in Kenya's history. So far, teachers are the only public servants to have earned a hefty 200 per cent pay increase in 1997. But even this was staggered in phases and has proved an uphill task for the Government, which has several times reneged on its promise to implement new salaries. The Government has 134,000 mainstream civil servants and a 600 per cent pay increase would have major implications for its already bloated payroll. Already, the International Monetary Fund has expressed concern over the huge public service wage bill. Donors have set the ceiling for the public wage bill at Sh94 billion a year which the government would exceed with the new pay rise. The other way of absorbing the increment would be to accelerate the retrenchment of civil servants, which the government had said would be voluntary. Another option would be to resort to the domestic market to borrow money to fund the payroll, which would destabilise interest rates. Kulundu's promise was received with guarded optimism by union secretary-general Alphayo Nyakundi, who warned the Government against making "political" announcements. He said the strike would go on if their demands were not met.

The minister made the announcement when senior Central Organisation of Trade Unions officials, led by secretary-general Francis Atwoli, visited him at his offices at NSSF building in Nairobi to brief him on issues related to Kenyan workers. Kulundu said the Government acknowledged that civil servants had been ignored for a long time and thanked the union officials for their "patience" which, he said, would pay off. Without directly referring to the strike threat, the minister asked the union to consult with the ministry to avoid any industrial unrest. Although the union is not under Cotu, Atwoli promised to dissuade the civil servants from going ahead with the strike. Reacting to Kulundu's promise, union official Nyakundi asked what happened to Sh7 billion allocated for civil servants' salary increment in last year's budget. "We are not begging. We have already negotiated with them. The strike is still on," Nyakundi said.

From, Africa, by Athman Amran of The East African Standard, Nairobi, 26 July 2004


Wealth Forms for Civil Servants to Target Graft

A new round for wealth declaration by civil servants is due in three months. "This time round, we should be able to catch some people. All we'll do is compare the next list with the previous one, and any unusual movement of assets must be explained," Justice and Constitutional Affairs assistant minister Njeru Githae told the Nation yesterday. "If we find you tripled or multiplied your assets a thousand times within one year, all you'll do is explain how that happened and how you achieved it," he said. "Compliance last year was 98 per cent and we expect to do even better this year." Thousands of State workers have been sacked or had their salaries withheld for failure to comply. Special committees have been set up at the Public Service Commission to verify compliance. There is more space in the new forms where it was found to be inadequate. There were also complaints that the forms were not clear on what should be called assets and liabilities, but Mr Githae said this has now been clarified. But any hopes of the information being freely available to the public was dashed when the assistant minister said the law would have to be changed to allow this. "As it stands now, only privileged institutions and investigators like the police and Kenya Revenue Authority may have access. Any other person will have to apply to the High Court to be allowed," he said. In Uganda, there are no access restrictions on civil servants' wealth information.

From, Africa, by The Nation, Nairobi, 26 July 2004


Civil Servants Urged to Set Pace On Work

Information and Broadcasting Deputy Minister Gabes Shihepo on Monday urged public servants to spend their full eight working hours "on the job" for the sake of efficiency and effectiveness. Addressing a meeting of Ministry staff, Shihepo said public servants should be exemplary employees by getting to work on time and leaving their office at five o'clock - not before. The Deputy Minister also asked public servants to look after Government facilities under their control and to refrain from abuse and vandalism of State resources. He assured his audience that Government, through his Ministry, was working hard to ensure that some very important legislation, such as the Constitution of Namibia, was translated into local languages so that everyone could understand the supreme law of the country. According to Shihepo, the Namibian Broadcasting Corporation (NBC) was trying to do its best to promote local programmes on television in order for young Namibians to know the history of their country. He cited examples such as young children refusing to take traditional food to school because, they claimed, other children would laugh at them. As a result, Shihepo complained, young children nowadays were only interested in taking bread and soft drinks to school. "By promoting local programmes on television, young people might start realising the importance of culture. This can only become a reality if parents take the lead."

From, Africa, by Randu of The Namibian, Windhoek, 29 July 2004


Civil Servants Now Face Performance-related Pay

The National Personnel Authority, the government body that supervises public servants, has decided to introduce a performance-based wage system for civil servants, abolishing automatic annual wage hikes based on seniority, government officials said Friday. The agency wants to introduce the performance-based system in fiscal 2006. But it may be tough to get the measure approved, with the union and government ministries expected to oppose the plan. These bodies are expected to likely cite difficulties in devising clear standards for assessing appropriate wage levels for the nonprofit work that civil servants perform. The agency is already discussing the matter with the union and intends to include its basic policy in its annual salary recommendation for government employees, which will be issued in August. The agency's move is in keeping with the government's plan to submit draft bills concerning the introduction of a performance-based system to the next extraordinary Diet session in the fall. Many Japanese firms have introduced performance-based salaries, shifting away from the traditional seniority-based wages. The agency has been considering adopting this kind of system for civil servants amid strong criticism of the government's seniority-based system, the officials said. The agency initially plans to introduce a performance-based system for basic salaries before eventually applying the system to bonuses, the officials said. Chief Cabinet Secretary Hiroyuki Hosoda told a regular news conference Friday that the government welcomed the agency's decision. "The system has already been introduced by many private companies," he said "It is desirable that public servants be assessed for their performance and have differences in their wage hikes." The agency makes wage recommendations every year for central government staff, taking private-sector wages into account because the labor rights of civil servants are restricted under law.

From The Japan Times, Japan, 9 July 2004

How Much Should We Pay Our Public Servants?

The following are excerpts from the budget speech of our Minister for Finance, who also happens to be the Minister for Planning:
"We need a forward looking, efficient, honest and modern civil service respectful of the needs of people in general . . . we will promote civil servants on the basis of merit and efficiency." These indeed sound very comforting to us as the descriptors "efficient," "honest," "modern," "respectful," and "meritorious" are not lately used as attributes of our bureaucrats. When a Finance Minister also has the Planning portfolio, we can presume that the budget the government presents, is not only a ledger book of earnings and expenses, but also an explicit depiction of government's plans that will follow through to realise the objectives set in the national budget. Therefore, subsequent scapegoating for a widening fissure between plans and objectives does not remain an option. Plans for our civil servants in the budget. From the budget, we learn that the government is considering formation of a pay commission to determine a new pay scale for public servants to be implemented by January 2005. In view of the increased cost of living, government is trying to refix pay scales of the officers and employees of the government and autonomous bodies. This new pay scale will be implemented after evaluation of the recommendations made by the pay commission, which is going to be formed by July 2004. Understanding the absurdity of the existing payment status, the current government started taking some meager measures from last year. In his last budget speech in June 2003, the Finance Minister announced 10 per cent dearness allowance for all government employees effective from July 1, 2003 until their salaries are restructured. An amount of Tk 700 crore was allocated in the budget to cover the allowances. As an interim measure this year, the Finance Minister proposed to raise medical allowance of all government employees from Tk 300 to Tk 400 per month with effect from July 2004. He also proposed to offer one festival allowance equivalent to net monthly pension from the next fiscal year to all retired government servants.

Our oversized bureaucracy
From the UNDP reports we know that our public employment (in civilian government comprising state owned enterprises, ministries, departments, directorates and autonomous bodies) grew at an annual rate of 3.6 per cent to almost 1 million in 1992, after which it has remained nearly steady. The nearly 1 million government employees make one-third of all formal sector employments. If we compare the size of our government with some of our neighbors, we find that total government employees as a per centage of labor force is 6.2 for Bangladesh, whereas for India it is 4.5 per cent, and for Pakistan it is 1.7 per cent. We undeniably have an over-sized government. Unless the private sector flourishes, this sector will have to absorb most of our emergent workforce. If the bulk of bureaucracy remains so enormous, government cannot pay them generous salary because we simply cannot afford it.

Graft and low wage
The existing poor pay structure has been widely believed to nourish the widespread corruption customary to our bureaucracy. Transparency International reported that the Bangladesh government had to incur a financial loss of around Tk 600 crore because of 216 cases of corruption in the first six months of this year. Among those involved in corruption, 63.3 per cent were government officials and staff, and 12.9 per cent were elected representatives and political leaders and activists. In 35.9 per cent of the cases, misuse of power was the major method of corruption followed by bribery (20.4 per cent). The poorly paid government employees turn to graft as an easy source to "balance" the family budget. Some employees are often tempted to accept favors to the detriment of our natural wealth and national economy.Is it cheaper for us in the end to pay higher salary to our civil servants than to incur the huge burden of financial corruption? How much should we pay our civil servants that will work as filters and dispirit them from being corrupt? The government is in search of an acceptable compensation schedule, which will nevertheless let our public servants meet their physiological and safety needs in Maslow's Hierarchy of Needs; let us forget about their upper level needs of Esteem and Self-Actualisation for now.

Our underpaid policy- makers
We all are very familiar with how little our civil servants, ministers, elected representatives and judges get paid. Some of them whine that the private sector pays way higher than what the government pays. Lets have a look at the prevailing salary structures in the public and private sectors in the US and Canada.In the US, the President gets $400,000 a year, the Vice President, House Speaker and the Chief Justice get $198,600, Justices receive $190,100, Majority/Minority Leaders get $171,900, Circuit Judges get $164,000, Senators and Representatives receive $154,700, and District Judges get $150,700. Corporate America pays its CEOs exorbitantly. The median salary for a typical Chief Executive Officer in the US is $541,166. An example of a corporate star would be the CEO of Colgate-Palmolive, who gets a cash compensation of $1.7 million per year, with bonus it becomes $10 million. He also has a stock options plan valued at $156 million. The Canadian Prime Minister gets an annual salary of $262,988; whereas, in the private sector, the CEO of Air Canada gets $1.66 million, and the CEO of Bank of Nova Scotia gets $1.35 million annually. The difference of payment between public and private sector employees is ubiquitous everywhere (except the communist states). The Bangladesh civil servants have to realise and accept this fact of market-economy. Comparing and contrasting their pay structure with that of the private sector will only aggravate their agony and anguish. But, as we see, the pay structure in North America is such that the public sector officials can live a decent life. Our civil servants rightfully deserve reputable salary.

A slim but functional bureaucracy
There is a valid cause for envy and demoralization among our civil servants about their current pay structure. This wage, especially for the third and fourth-class employees, is often below the poverty-line requirement. The schoolteachers who educate the masses of our children and the policemen with the risk and hazard attached to their work receive compensation not commensurate at all to their duties and responsibilities. Our civil servants retire only at age 57. Most of them can neither complete raising their kids nor can they save enough for their retired life by then. Therefore, most become job hunters again. The budget has set aside Taka 200 crore to fill-up most essential vacant posts next year. Rather than enlarging further our jumbo bureaucracy, we should focus more on retaining fewer people but start paying them better. If one of the poorest countries in the world can allocate Taka 4,416 crore for its defense forces, it can certainly pay its civil servants a little more.The government and the pay commission should adopt an open and transparent policy of compensation for civil servants based on just standards. If raising the pay structure can improve productivity and reduce the extent of corruption to some degree, the financial gains from that will be enough to cover the higher costs incurred by a superior pay scale. The commerce and finance ministry should also ensure that a pay rise in no way spike a price spiral in the market, and eat away the better quality of life, we are to promise our civil servants through this new pay schedule. The real struggle is how not to let the cost of living ascend as a consequence of any elevation in compensation.

From The Daily Star, Bangladesh, by Hasanat Alamgir and Habibur Rahman, 2 July 2004

PM Against Frequent Transfers of Civil Servants

New Delhi - Prime Minister Manmohan Singh has spoken out against the "frequent transfers" of civil servants, saying these moves not only affect their morale but impact on governance. He has also called for reform of public institutions and accountability in public services in letters to state chief ministers. "Frequent transfers of public servants have a debilitating impact not only on their performance and morale but also on the whole process of governance," the prime minister said in letters to the state chief ministers. He urged the chief ministers to ensure the stability of the tenure of key officials, saying this was important for effective administration and public services. At the same time, he emphasised the importance of accountability of public services. Copy of the prime minister's three-page letter to the chief ministers was officially released here Sunday. "Challenges of law and order as well as development require stability of tenure of officials in key positions," he said. By writing the letters, Manmohan Singh was reviving a practice followed by the country's first prime minister Jawaharlal Nehru in reaching out to chief ministers and involving them in the implementation of the social and economic development programmes. His officials said this was first in a series of letters that the prime minister planned to write to the chief ministers.They said Manmohan Singh felt that the common minimum programme (CMP) of the ruling United Progressive Alliance (UPA) can be implemented effectively only through joint action by the centre and the states. The letters to the chief ministers would be in addition to periodic conferences with them that he intended to hold with them on specific issues, they added. Manmohan Singh, in his letter, also emphasised the need for the reform of public institutions. He called on both the union and state governments to introduce reforms in the processes of governance and ensure accountability in public services. "It will involve energising institutions of governance and ensuring accountability in the provisions of public services, transparency in handling of public funds and aligning incentives with desired outcomes," he said. He specifically referred to the "critical importance" of maintenance of law and order to create an atmosphere conducive to economic development and social harmony. He also urged the chief ministers to play the role of "visionary leaders".

From New Kerala, India, India News, 18 July 2004

National Security Course For Senior Public Servants

It will help them understand terror threat better.
A NEW postgraduate course in national security is being developed for senior officials in the public service to deepen their understanding of terrorism and Singapore's response to this transnational threat. It will be for those holding the post of director and deputy director and equivalent appointments in the uniformed services, intelligence and defence technology agencies, and various ministries.

The course is one of the first initiatives to be rolled out by the new National Security Coordination Secretariat, a government agency being set up to give top priority to security concerns. It was announced in Parliament on Tuesday that the secretariat, headed by a permanent secretary for nationalsecurity and intelligence coordination, will report directly to the Prime Minister. The postgraduate course will be developed by one of two arms of the new secretariat, the National Security Coordination Centre (NSCC). This will focus on policy coordination and planning. The responsibility for coordinating intelligence sharing, a key weapon in the fight against terrorism, falls to the other arm, the Joint Counter-Terrorism Centre. Giving more details of course for senior public servants, a spokesman for the NSCC said yesterday: 'The course aims to deepen understanding of the threat of transnational terrorism, Singapore's national security architecture including the inter-agency linkages and processes, as well as the roles and responsibilities and development plans of other security agencies operating within Singapore's national security network.' It will be supported by presentations and discussions with experts from the NSCC, intelligence agencies, academic institutions such as the Institute of Defence and Strategic Studies and other agencies. Course participants will also hold discussions with key ministers and permanent secretaries. On other projects to be rolled out once the new secretariat is up and running, the spokesman provided details. on two areas:

Bio-terrorism defence: In the wake of the Sars crisis, a major concern has been to develop a comprehensive capability to deal with a bio-terrorist attack. Singapore remains vulnerable, given its open economy, high population density and the highly infectious nature of biological agents. Lessons learnt from the Sars crisis will be useful in re-engineering medical surveillance, quarantine, diagnostic and other systems, as well as in developing contingency and response plans, the spokesman explained. 'The security agencies are also working with Singapore's health authorities to develop a nationwide surveillance and alert system for the early detection of biological outbreaks,' he added.
Cyber security: To protect communications, banking and finance infrastructure, a multi-agency effort is underway to develop an info-communications security masterplan led by the Infocomm Development Authority. 'This will provide a strategic roadmap to protect Singapore against external and internal cyber threats,' said the spokesman.

From Straits Times, Singapore, 22 July 2004

Allowance for Transferred Public Servants to End

The National Personnel Authority has decided to abolish a system in which public officials are allowed to receive cost-of-living allowances for being stationed in big cities even after they move to lower-cost locations, authority sources said Thursday. The authority will review rules on salary changes resulting from relocation of residency and will include new guidelines in recommendations to be announced in early August. Under the system currently in place, national public officials who work in cities where the cost of living is high, can receive living allowances of up to 12 percent of their basic pay. If the officials move to regional areas where living costs are relatively low, they can continue to claim the allowance for two years under a so-called allowance guarantee that is designed to protect officials from sudden drops in income. The allowance is intended to eliminate a gap in salary levels between national public servants and private sector workers in local areas. Under the review, the authority also plans to revise the allowance system to ensure that officials receive pay levels comparable with company employees in the area in which they work. According to the authority, as of April 2003, of about 460,000 national government officials across the nation, about 280,000 received living allowances. Of them, about 60,000 are receiving the allowances despite having moved to low-cost areas.

The allowance guarantee system has drawn criticism since such preferential treatment is not available to private sector workers. The system is also open to abuse. The authority found that officials of some ministries and agencies including the Japan Coast Guard and the Education, Science and Technology Ministry received allowances despite working for only part of the time in major cities. According to the authority's survey, over the 10 months since April 2002, 107 officials from 10 ministries and agencies were transferred to major cities on a short-term basis so they would be able to claim the cost of living allowance. Since fiscal 2004, the authority has cut from three years to two years the period over which it will continue to pay allowances after a person moves. The authority has also cut the amount of allowance by 20 percent and changed eligibility rules so that officials who have spent fewer than six months posted to a major city are not entitled to claim the expenses. The authority has now decided to abolish the allowance guarantee system altogether and review the living allowances. In lieu of abolishing the allowances, the authority decided to expand travel expenses currently paid to transferred officials and to introduce a relocation allowance system comparable with the private sector.

From Daily Yomiuri, Japan, by Yomiuri Shimbun 30 July 2004


"No" to Public Servants' Strike Rights

On July 30, Minister of Labor Kim Dae-hwan announced the public servants' right to strike, saying, "We will not yield an inch to them." He mentioned the government's position, stating, "It seems like the issue of the creation of a public servants' union will surface after the summer holidays end," while giving a speech on the "Government's Labor Policy to Establish Reciprocal Labor and Management Relations" at the 18th Jeju Forum held on this day at the Shilla Hotel. "The government has been criticized over the delay in legalizing the public servants' union by the International Labor Organization; however, we are planning to legislate the bill to give permission to them to create a union in the latter half of this year," he added. He also emphasized, "The government's stance on the public servants' strike against the nation is disapproving considering its legal position as a public servant, although the right to create a union is legalized." Minister Kim said, "The National Public Servants' Union and other unions want to wage an all-out war against the government on the issue; however, the government will never yield an inch to them. This will cause some tensions, but the government will tolerate their union creation on the level of public consensus."

From Donga, South Korea, by Won-Jae Lee, 30 July 2004


Hidden Value of Civil Servants

Is it just me, or was there something odd about the Government's spending review last week? Gordon Brown said he was slashing more than 100,000 public sector jobs and almost no one gave a cheep. Suppose those had been manufacturing jobs. Think of the brouhaha. From a right-wing perspective, this lack of response was natural enough. Civil service jobs are created by central planning, not the market, and are therefore deemed suspect. But even traditional friends of the public sector, such as the BBC and the Guardian, were curiously subdued. Though I have been in the private sector almost all my working life, this bothers me slightly.

There seems to be a universal presumption that public-sector jobs are undesirable per se.But for better or worse, most of us rely pretty heavily on public services. If they are doing a bad job - and many of us think they are - why would they do it better with fewer staff? We are told those being axed are not in the so-called front line, and therefore belong to that despised class, the bureaucracy. Maybe so. But we were also told recently that the future of Marks & Spencer hung between Stuart Rose and Philip Green, neither of whom proposed to man the tills. People in the front line need to be managed; and in the private sector, investors pay far more attention to the quality of management than to the staff. But the real fallacy, I suspect, lies deeper. It so happens that we pay for central services collectively, through the tax system. This does little to affect the nature of the services themselves. But it leads many of us into the trap of supposing that while the private sector produces wealth, the public sector consumes it. In simple economic terms, this is nonsense. The wealth of a nation consists of the sum of its goods and services. It is perhaps disconcerting to note - as in the latest Guardian educational supplement - that our universities will pay more these days for a disability co-ordinator than for a lecturer in psychology. But a day's work by a disability co-ordinator is as much an economic output as a tractor, or indeed a concert by Robbie Williams.

We seem curiously impelled, though, to rank all those outputs in a kind of league table. In 18th-century France, the physiocrats, a group of proto-economists, argued the only real wealth came from the gifts of nature: minerals in the ground, the multiplication of crops and so forth. If you cut down a tree, you were creating wealth - but not if you made a set of chairs out of it, since the extra value created was wholly consumed by the cost of manufacture. We may have come some way since then, but not much. Farmers will still tell you the whole country depends on them, despite the fact that their share of national output is maybe 1 per cent net of subsidies, and we could import it all tomorrow. Manufacturers will claim the service sector depends on them, even though they are mostly dwarfed by companies such as HSBC and Vodafone, which do not produce any tangible objects at all. But when we are all exhausted by those arguments, we can still unite on one thing: that the civil service is useless. In Margaret Thatcher's first term, she appointed a senior Marks & Spencer man, Derek Rayner, to look into the civil service. His first recommendation - funnily enough - was to cut just over 100,000 jobs. But he was also surprised by the high quality of the senior managers. When he reported this to Mrs Thatcher, he was told that was the wrong answer. He must go away and think again.

Ever since the collapse of the Soviet Union, that kind of thinking has become more entrenched. In reality, most people still seem to want at least some public services. But in a curious way, they also seem to despise those who provide them: to picture them, as our sister paper the Daily Telegraph did on its front page last week, as an army of faceless men in bowler hats. Eventually, we will have to make our minds up. If we agree that all services should be provided by the market, well and good. But if we persist in regarding public servants as drones, one of two things will happen: we will get poorer quality servants, or we will have to pay them more. Or very possibly both - and serve us right.

From, United Kingdom, by Tony Jackson, 17 July 2004

Berlin Proposes Ban on Religious Symbols for Civil Servants

Berlin's city government put forward a bill banning police, teachers and other civil servants from wearing or displaying religious symbols such as headscarves in public, the city-state's Interior Ministry said. The legislation balances ``the constitutional rights to freedom of religion and belief that every civil servant enjoys'' with the state's constitutional obligation to neutrality in these areas, the ministry said in a statement on its Web site. Should the state parliament approves the bill, Berlin would be the first of Germany's 16 states to introduce an across-the- board ban on religious symbols for all civil servants. In April, two other states, Lower Saxony and Baden-Wuerttemberg, passed laws forbidding Muslim teachers from wearing headscarves in publicly run schools. Legislators in other states, including Hesse, Bavaria and Saarland, have also put forward proposals to ban headscarves in their classrooms. The measures were taken after Germany's Federal Constitutional Court ruled last September that Muslim teachers may wear a headscarf in state schools as long as state laws don't forbid it. Fereshta Ludin, a German of Afghan origin, took the case to the court after Baden-Wuerttemberg banned her from working as a teacher in a state school because she wore a headscarf. The state argued that she had violated teachers' obligation to neutrality on religion. Ludin argued that the German constitution guarantees freedom of religious expression. The Berlin state government also proposed changes to its daycare law, the ministry said. Under the proposal, teachers in public kindergartens and day nurseries ``shall pay attention to neutrality of religion and belief.'' While the proposal doesn't seek to ban religious symbols outright, it would force teachers to comply with requests by parents for them to abstain from wearing them.

From Bloomberg, by Claudia Rach, 20 July 2004

100,000 Civil Servant Jobs to Go

BRITAIN'S Labour Government today announced plans to axe more than 100,000 civil servant jobs, while at the same time pledging extra cash for public services, as it set the scene for elections expected next year. Mapping out the Government's spending plans for the three years to 2007-08, Chancellor of the Exchequer Gordon Brown said that 84,150 civil service jobs would be lost in England. A further 20,000 posts would go from the devolved administrations in Scotland and Wales, and from the Northern Ireland Office, said Mr Brown, the finance chief of Prime Minister Tony Blair.The job losses include the axing of 40,000 civil servant posts already announced by Mr Brown in March. Britain's leading unions, while backing the extra investment in public services, attacked the job cuts. "We again welcome the Government's commitment to extra spending in health and education, but we are alarmed to learn of the chancellor's plans to cut jobs from the civil service," said Kevin Curran, general secretary of the GMB union, which represents workers across a range of service sectors. Mr Brown also announced plans to speed up the relocation of 20,000 civil service jobs from London and southeast England and promised a clampdown on absenteeism in the workplace.

Total government departmental spending was to rise from 𧷏 billion ($715bn) this year to 𧸌 billion ($872bn) by 2007-08. Mr Brown's spending plans for 2005-8 drew the battle lines ahead of an upcoming general election, due by mid-2006 at the latest but likely next northern spring, when the ruling Labour party hopes to win a third consecutive term in office. Labour was elected in 1997 and re-elected four years later on a pledge to pump billions of pounds into Britain's creaking public services, but with the government's finances deep in the red spending growth has slowed. Spending on frontline public services, including health and education, was set to rise by an average of 4.2 per cent per year until 2007-8, said Mr Brown, whose spending review is given every two years. "In this spending round three-quarters of all new spending is going to these vital front line public services," he said.

The Government said it had set aside an extra ١.7 billion (9.5bn) a year for its armed forces by 2008, while also boosting spending on domestic security. The budget for the armed forces was to rise from 㿉.7 billion ($76bn) this year to 㿍.4 billion ($85.6bn) by 2007-08, an average annual rise of 1.4 per cent above inflation, Mr Brown told parliament. There have been reports that the Ministry of Defence, facing growing strains on its budget, will announce plans to slash its non-military staff, totalling 93,500, by as much as 10 per cent in the wake of the review. Mr Brown said spending on national security would rise from ٟ.5 billion ($3.8bn) this year to ٠.1 billion ($5.3bn) by 2007-08. "Since the tragic events of September 11, the needs of national security at home and action against terrorism abroad have rightly assumed a new importance," the chancellor said. Overseas, ٟ.5 billion ($3.8bn) was to be provided to tackle AIDS in Africa, while Sudan would be provided with an extra 𧵎 million ($384m) of aid over the three-year period.

From Melborne, Herald Sun, Australia, from Correspondents in London, 12 July 2004

Civil Servants Face Total Smoking Ban

Ulster civil servants are to be barred from smoking, even when driving work vehicles or sailing in Government-owned vessels, it can be revealed today. A ban on smoking across Government departments in Northern Ireland is due to be introduced at the beginning of next year. The implications of the move have now been explained in a new memo circulated to staff. It states that the ban will include "the cabs or other enclosed areas of all Government vehicles, including official cars, vans, lorries, sea-going vessels etc". Anyone visiting Government premises will be prohibited from smoking "including staff, consultants, contractors, visitors and members of the public". It also states: "A member of the public or a visitor who refuses to observe the ban should be asked by local management or the premises officer to leave the premises.

"Departments should already have procedures in place for dealing with a visitor/member of the public who refuses to leave." The memo says staff will not be permitted to leave their workplace solely for the purposes of smoking "outside of the lunch time period". Civil Service line managers are advised to take immediate action if a staff member breaches the ban. "Some leniency" can be shown in the "first couple of weeks" but staff who persistently ignore the measure should be handed an informal disciplinary warning, the document states. Further breaches will be dealt with in accordance with Civil Service procedures. The Government circular says the ban is being introduced on health and safety grounds, due to the "serious threat" posed by passive smoking. "Tobacco smoke is a particular issue in the workplace as it is linked not only to cancer but chronic conditions such as asthma, bronchitis and coronary heart disease. "It has also been found to be virtually impossible to control the leakage of fumes from designated smoking rooms, with staff in the vicinity always likely to be contaminated by the odour if not some of the actual smoke itself," the document adds. All existing smoking rooms in Government buildings are to be closed from January 1, 2005, and converted back to office or other use.

From Belfast Telegraph (subscription), UK,by David Gordon, 23 July 2004


Ethics at work: Corporation and Community

Last week we discussed the issue of corporate community involvement. We concluded that such involvement is justified because shareholders want it, because it is good for business, and because it is simply irresponsible for firms to ignore their vast impact on communities. At the same time, we don't want to see the cultivation of "corporate busy-bodies." The main focus of corporate concern should be on those groups, which are most directly impacted by corporate activity, known in business jargon as "stakeholders." One popular way to express this involvement is to give money, or company products, to community institutions. What is the actual extent of this phenomenon? The Web site of "Business for Social Responsibility" ( writes: "Companies considered 'leaders' typically commit to donating between 1 and 5 percent of pre-tax profits to charity." The picture in Israel emerges from a recent report by Maala, the Israeli partner organization of the BSR, which gives figures for the most generous publicly-traded Israeli companies. The average for these companies was just below half a percent of pre-tax profit; six profitable companies donated at least one percent. There are many motivations for such giving. Among them are: gratitude, desire to build constructive community relations, pressure from community groups or investors, and a positive image among customers. Today there are billions of dollars in "Social Responsibility" investment funds, which both screen firms for ethical policies and use their investments as leverage to influence policies; many of these funds use corporate philanthropy as a significant criterion in investment policy.

While corporate philanthropy might sound like an unqualified benefit, it actually raises a number of ethical concerns. Here are two: Legitimacy. Management might support its personal favorite charities at the expense of the financial and ethical interests of the owners. This concern was voiced by Milton Friedman, who complained that when a firm pursues social responsibility, "the corporate executive would be spending someone else's money for a general social interest." Authenticity. There is nothing wrong with marketing and advertising, but sometimes marketing expenses are camouflaged as charitable contributions. For example, a prominent marathon race has a number of sponsors. One is a private family; this is probably a charitable donation. Another is a maker of running shoes, which probably hopes to influence a natural target audience. While there is nothing objectionable about such sponsorship, it hardly qualifies as community involvement. This concern was voiced by World Bank president James Wolfensohn, who stated that multinationals often give most of their donations in the home country when their most important and needy stakeholders are actually in underdeveloped countries where production facilities are located. This may be a result of the fact that managers are just more aware of and disposed towards charities in the home country; alternatively, it may reflect a desire to create good will among customers. Again, there is nothing objectionable about this but it is not a substitute for community involvement.

From Jerusalem Post (Subscription), Israel, by Asher Meir, 22 July 2004


A Sound Academic Experience is About More Than Books

Sir, I am glad Michael Skapinker in his column "Business schools must accept their responsibilities" (July 14) tried to take an objective view of the hand-wringing that is going on among some academics in business schools. It is asking for the impossible to make sure that the students who go through such schools don't end up cooking the books and siphoning off money for their personal gratification. Let me say that you cannot lead a student to a subject and make him learn. He must want to learn. In this regard, the process of education is increasingly one of interaction between students and their instructors (I prefer to use the terms participants and facilitators) as well as between students themselves. At Universitas 21 Global, for example, we try to pass on a sense of community through discussion and debate on any number of issues that relate to each subject undertaken by our students. This open forum allows for the expression of concerns that students have about subject material or related experiences in their workplace. Certainly, corporate social responsibility and business ethics cannot be dismissed. Nor can assorted cultural differences that affect how people do international business. Our students can engage in discussion about their own experiences, gaining new insights from the responses of their colleagues who are subjected to more or less legislation in the broader economy, or regulation within their own corporate domain. As for management consultancies and investment banks recruiting people and teaching them what they need in a fraction of the time of an MBA programme, I wish them good luck.

What is overlooked here is that a sound academic experience is not just about learning information in a given subject area. If that were the case, we may as well expect that reading a book is good enough. An academic experience is about making people think about issues and topics. I believe this involves a mindset shift, one that should put a well-educated graduate in a better position to understand the complexities of the changing global environment than could be gained from a thinner corporate training programme.In the end, with any educational experience, responsibility rests with the individual, the company they work for and the country in which they live and operate. For every corporate criminal exposed, there are many who uphold the ethics their businesses represent. Unfortunately, it's the bad apples that always make the news.

From Financial Times, UK, by Cornelis Reiman, 19 July 2004




India Shining - At least on E-governance

Its official: All that talk about India shining may just have some truth to it. e-governance has delivered a major push to technology adoption in Asian governments, and the horizon for information technology looks bright and sunny. A recent IDC study has found that the focus of many Asia/Pacific governments is on squeezing more value out of their IT investments. In the region, Asian governments with aspirations to position themselves as global e-government leaders are beginning to view the value derived from IT investments as a measure of their capabilities. "Reflecting on the last five years, Asian government's approach to building their IT infrastructure has been 'if it's possible to build, then we need to build it'", said Nathan Midler, research manager, public sector research, IDC Asia/Pacific. "Today, leading governments realize that aligning government needs with IT solutions, and making strategic investments can cost less, yet deliver more in terms of cost savings, recognition, and user satisfaction," added Midler. Reminiscent of the dotcom boom years, governments have designed bold and grand plans for e-governance, but in many cases their efforts have failed to deliver the intended outcome. Plans have envisioned improving user satisfaction and modernizing the government, but despite their high aspirations, many e-services remain under utilized. Many governments continue to rely on offline work methods, or worse, with new IT solutions in place, continue to carry out the same inefficient work processes that existed offline previously. And the vendors are all the more excited at the proposition of bagging meaty government contracts. Speaking to CXOtoday, Javed Tapia, director, Red Hat Linux India, said, " In India, governments are adopting Linux for three main reasons. Firstly, the low cost high value proposition that Linux represents. Secondly, reliability; like their commercial counterparts, government users expect their systems to be up and running 100% with no failure. And third, Linux and open source solutions lower total cost of operations and require less maintenance. Open Source software is also standards-based, which enables Linux to be widely deployed in various government agencies."

The key to increasing the value of IT is to align IT solutions with government needs. Today, leading governments in Asia are gaining more value from their IT investments through focusing on cross-agency solutions, reorganizing their internal management of IT and e-services, increasing IT training, placing greater emphasis on tracking and evaluating performance indicators, and promoting collaboration. In order to bridge gaps and overcome the barriers to communication, government policies are being implemented to establish a common set of technology standards to which departments must adhere. Only when inter-department communication and data transfer across the entire network is achieved will the government be able to realize the benefits of IT investments and advance to the next stage of e-government, the study evaluated.

K P Unnikrishnan, marketing director, Sun Microsystems India, said, "Defense, intelligence, and law enforcement agencies have a greater need for fast, secure network collaboration and information sharing than ever before. We are providing solutions for the specific needs of government agencies and departments for deploying confidential or classified networks and intra-organization collaboration and data management." "Governments today are evaluating if funds can be better channeled elsewhere rather than investing in resources that simply duplicate work processes. For example, governments are now seeing the potential benefits of combining non-core government functions, such as human resources, via a centrally managed IT solution", added Mr. Midler. At the same time, greater value in how IT is used to deliver government services is possible, particularly with citizen-focused e-services. Despite large investments, e-services have not managed to significantly reduce the use of offline channels of government interaction. In many cases, government employees have been under trained to use their own e-services and, not surprisingly, have difficulty inspiring citizens to use these e-services. As governments continue to rely on offline channels to interact with citizens, large investments in e-services are under utilized, the study concluded.

., India, by CXOtoday Staff, 2 July, 2004

e-governance Takes Penguin To Rural India

The e-governance wave is spreading like wildfire across the nation, and the initiative has reached a nationwide magnitude with the pro-rural budget being announced last week. Linux has a significant role to play in the movement, claims Prakash Rane. What sounds really hard to digest, is the fact that a body as 'red-taped' as the Indian government has jumped on to the Open Source bandwagon both quickly and efficiently. Speaking to CXOtoday, Prakash Rane, managing director, ABM Knowledgeware Ltd., said, "The focus on e-governance has reached peak attention levels, with the Government of India earmarking Rs 12,500 crore towards an ambitious five year spending plan. The rural approach taken by the budget is excellent. Falling hardware prices will drive demand, and as the rural economy improves, the pathway for introduction of technology in backward sectors will be cleared. The Linux perspective has seen a dynamic turnaround. Until a few years back, Linux was simply branded as an 'experiment' in government circles, and now its not. Period. The use of Linux on RDBMS has jumped significantly, removing all earlier apprehensions.""Another significant contribution to the changing mindset has been the availability of good support. Today we have at least 2-3 Linux certified engineers in every team working on e-governance projects. Linux suits the market needs perfectly, as by a thumb rule, e-governments are very cost conscious customers. There is absolutely no disputing the fact that one of the biggest gainers from the e-governance wave will be Linux. As DNA, .Net, SQL Sever 7.0/2000 and Microsoft MSDE are increasingly finding their way into e-governance projects, judging on a head-to-head scale, I would say that the Linux-Microsoft share would be 50-50. That's a significant win for Linux in the country," added Rane.

Describing a few of the latest initiatives where Linux has made a significant contribution, Rane said, "Public Sector Undertaking, National Fertilizer Ltd., the engineering department of the Delhi Municipal Corporation, Citizen Facilitation Centres (CFCs) in 2-3 corporations in North India, and financial management projects in the interior parts of Gujarat are a few examples. For places outside Maharashtra, we are in the process of starting a few migration projects, which will involve the conversion of legacy Foxpro systems. Although the RDBMS has not yet been decided, it will most probably be an Oracle-Linux combo." Describing the challenges faced in e-governance projects, Rane said, "It is common knowledge that government procedures are extremely slow. The challenge that e-governance technology enablers like us face is not red tape. Rather, its change management that poses the biggest hurdle, as most government employees possess the so-called 'Fear Of The Unknown'. They take time to adjust to changing paradigm shifts. Also, we face resistance from a certain section of the society that opposes the influx of technology, primarily because of the transparencies that it introduces into the system."

ABM has used Linux to create a complete e-governance solution for Kalyan Dombivili Municipal Corporation, which was selected by Govt. of Maharashtra for roll out across all the 245 Municipal Bodies in the State of Maharashtra.. The KDMC project has been recognized as one of the top ten implementations of the year, from 150 different applications across 14 commonwealth countries. The Government of India has seen the project, and has recommended the same to be followed throughout the country, claimed Rane. "It has been noticed that in the context of Indian e-governance, several successful pilot projects are carried out but its successful replication has not taken place due to several factors. Replication of e-governance solutions can result in much faster roll out with substantially lower cost and lower chances of failure. Our SETU initiative first started at the Thane Collectorate has been replicated in Nagpur, Hingoli Zilla Parishad and 27 cyber cafes. The Government of Maharashtra has standardized the concept for replication across the state. We plan to take this initiative forward to the rural and interior most parts of the country, for enabling hassle-free administration in backward regions," said Rane. BMC's Citizen Facilitation Centers (CFCs) still run on a legacy Microsoft environment, and the body is evaluating various aspects for migration. Whether they switch over to Linux or not still remains to be seen, claimed Rane. ABM Knowledgeware develops tailor-made e-governance solutions for different customers, and has its offices in different states in India and abroad.

From, India, by Hinesh Jethwani, Mumbai, 14 July 2004

Turkey Cracks Down on Tax Dodgers with New E-gov System

The Turkish Ministry of Finance has announced a $64m deal with Siemens Business Services to augment the country's burgeoning e-government system. The VEDOP-2 project will focus on the General Directorate of Revenues, which oversees tax collection, and should be completed by the summer of 2005. The government aims not only to improve its efficiency in processing transactions and to allow tax payers the convenience of filing returns online but also to increase revenues by cracking down on Turkey's 'informal' economy, or black market.
Osman Arioglu, general manager of the Turkish Ministry of Finance, said: "The most important [part of the project] to us" is the development of a data warehouse for all tax information. The government hopes the data warehouse will aid in exposing unregistered transactions, ease the investigation of suspicious activities and the enforcement of penalties and build public trust in the tax-collecting system. Arioglu said: "We believe a more efficient system means more people will comply [with tax laws]... If the people know the informal economy is collapsing, they will feel more confident in the political and economic systems. The new technology will help combat the informal economy." Turkey's black market is estimated to make up as much as one-third of the country's economy.

Mustafa Cagan, country manager for Siemens Business Services Turkey, said the new automated tax system will increase tax income "rapidly", though the government says it does not have specific revenue growth targets. As part of VEDOP-2, Siemens will set up a backup and disaster recovery system; implement the technology for a call centre that tax payers can call for information; integrate all tax offices with the Turkish communications network, GELNET; build an infrastructure for data exchange with other institutions; and unify the Tax ID and Citizen ID number systems for better tracking of individuals' actions. In addition, Siemens will teach around 15,000 Turkish government employees to use the new system and train them in basic word processing, which Arioglu said will "help Turkey's transition to an information society".
Electronic signatures will play a role in the e-government scheme as well. Siemens will provide hardware and software for the technology, while a law allowing the use of e-signatures is progressing through in the Turkish Parliament. It is expected that by January 2005, digital signatures will have the same legal meaning as handwritten signatures. Security on the e-government system will be ensured through public key encrypted data (including encrypted digital signatures) and password protection. The benefit to Turkish citizens is that online filing means they no longer need to visit the tax office in person each month. Because salaried workers don't file tax returns, online filing will affect most directly the three million people who account for the 75 million transactions processed by the office each year. Still, the new system will include the filing of vehicle taxes, which affects a large portion of the population.

Turkey lags most European nations and the US in providing online government services. When asked why the country is behind, Siemens' Cagan pointed to Turkey's recent economic instability, including significant debt and negative GDP growth in 2001 and 1999. Cagen said: "IT comes if you have a stable government and economy. If you have structural problems, IT makes it worse." Recently, though, Turkey's economy is looking healthier, with positive GDP growth in 2002 and 2003 and falling inflation. The markets for IT services in general and government IT services in particular are growing at a slow and steady pace, according to IDC. In Europe, IDC predicts government IT services will grow by 10 per cent to a $7.4m business between 2004 to 2006. By 2006 they will make up 12 per cent of the total European IT services market. For the overall IT services market, more growth will be seen in Central Europe and Middle Africa (CEMA) than in Western Europe. In CEMA, IDC sees 25 per cent growth from 2004 to 2006, to create a $6.2m business. In Western Europe, the overall IT services market will increase by 9 per cent to $53m in the next two years, says the market research firm.

From, UK, by Sylvia Carr, 5 July 2004

Infy to enable e-governance for Delhi

After its success in Bangalore, the Infosys is now going to help Delhi civic bodies to switch over to e-governance to improve their services. A Memorandum of Understanding (MOU) was today signed by the Municipal Corporation of Delhi (MCD) with the eGovernment Foundation, a non-profit organisation sponsored by the Infosys CEO Nandan Nilekani for promoting E-governance in civic bodies. Infosys has a number of software products which are ready for application in areas like property tax, grievance monitoring, GIS and Fund Based Accounting, which the MCD will now introduce into its functioning. The eGovernment Foundation was set up in 2003 to promote IT in urban management and bridge the divide between the citizen and civic bodies in delivering services efficiently. It has got vast experience in Karnataka and is now in a position to share this knowledge with MCD. The foundation will soon station a dedicated team of Project Managers and Software Developers to start work on the identified projects. Delhi Chief Minister Sheila Dikshit, who was the chief guest on the occassion described the agreement with eGovernment Foundation as the ''red-letter day'' for MCD, saying it will transform its functioning and make it more accountable. She said eGovernance would greatly help in making people-government interface more friendly.Later, addressing a press conference after the signing of the MOU, Nandan Nilenai said increasing public accountability is the call of the day and it is only through the use of technology that transparency can be ensured, which would automatically take care of public accountability. Replying to a question over corruption in the MCD, he said once citizens were better and timely informed, quality of service of civic bodies will automatically improve. On this occasion MCD Commissioner Rakesh Mehta Expressed the hope that the technology developed by the Infosys will greatly help the MCD to modernise itself up to world standard.

From Sify, India, 21 July 2004

E-governance: IT Firms' Role to be Studied

Thiruvananthapuram - The Information Technology and Industries Minister, P K Kunhalikutty, on Thursday assured the State Assembly that the Government would examine the issue of ensuring a level-playing field for Kerala Information Technology (IT) companies in its e-governance programmes on the lines of similar programmes being implemented by Andhra Pradesh. Replying to a calling-attention motion of the Congress MLA, Adoor Prakash, on the need to simplify norms to facilitate the participation of IT companies in e-governance programmes, Mr. Kunhalikutty said the Government would study the programmes implemented in States such as Andhra Pradesh and take suitable measures. In his calling-attention motion, Mr. Prakash pointed out that the Government was implementing e-governance programmes to the tune of Rs. 500 crores spread over various departments, including Motor Vehicles, Civil Supplies, Registration and Power. However, the higher qualifying norms stipulated in the tender were working against the interests of the Kerala-based IT companies, he said. Referring to the Secretariat e-governance programme, he said the tender stipulations asking for Rs. 20-crore annual turnover for the last three years was detrimental to the interests of the local IT industry. He was of the opinion that only large companies, with hardly any presence in the State, would be able to qualify for participating in the tender process.

Andhra Pradesh, which has set the IT revolution, had stipulations to ensure participation of the local IT industry in its e-governance programme. The tender documents stipulated that the participating companies should have a registered office in the State, with the prescribed years of presence and record of having implemented such projects. The stipulations regarding annual turnover was also considerably less at Rs. 4 crores. The Minister said that the Government was of the view that the Kerala IT industry should also be given a role in e-governance, but there were practical difficulties in implementation. The programme was complicated and only companies that had required expertise and financial clout could implement it. This issue has to be given considerable thought in order to prevent future problems, he said. The Minister said the qualifying norms for participation in e-governance programmes had been prepared after studying the experiences of States like Andhra Pradesh.

From Sun Network, India, 23 July 2004

E-Governance in Municipalities

Various urban local bodies in India have started e-governance initiatives that aim to provide services of the Urban Local Bodies in a transparent and more accessible manner to all citizens. Visakhapatnam, which has taken the lead in these efforts, has many basic services online, including tap connection status, status of garbage pick-ups, sanitation tenders, and building plan status. Hyderabad has introduced accrual based accounting and management information systems, and has also implemented initiatives with regard to property tax, grievance redressal and e-procurement,. Bangalore has introduced a comprehensive, ward-wise management information system that includes a self-assessment property tax component and information available to the public on the city's budget. Bangalore has also successfully shifted to a fund based double entry accrual based accounting system and introduced a management information system. Coimbatore has computerized its database for property taxes and water charges, based upon which it has developed an: accounting module; management module; work flow module; and, grievance reprisal module. Surat Municipal Corporation has introduced an award-winning system for citizen complaints reprisal. Ahmedabad Municipal Corporation has introduced an online system for self-assessment of property tax, a grievance cell, and service tendering. Jabalpur has developed a management information system, based upon which the city has improved its resources mobilization.

National Mission Mode Project on e-Governance in Municipalities
The Ministry of Urban Development's National Mission Mode Project on e-governance hopes to draw upon lessons learnt regarding implementation and design issues from the various initiatives already on the ground, and plans to systematically integrate and build upon the various components and lessons from the same. Under the Mission Mode Project, e-governance is understood to include both Enterprise Resource Planning (including financial controls, operational management, analysis and reporting) and Citizen Relationship Management. Further the Mission Mode Project hopes to draw lessons from the implementation support provided at the state level where such initiatives have already been launched. This learning is to be integrated while developing the Project's implementation plan and for achieving any potential savings through sharing of hardware infrastructure and software development. In August 2002 the Government of India announced that it would implement a comprehensive programme to accelerate e-governance at all levels of the government to improve efficiency, transparency and accountability at the government-citizen interface. As an initial step, the Prime Minister's Office set up a high-powered Task Force on IT and Software Development. The Government of India subsequently approved the National e-governance Action Plan for implementation during 2003-07. The National e-Governance Action Plan has identified the formulation of various Mission Mode Projects in e-governance, including one for municipalities under the responsibility of the Ministry of Urban Development.

From Press Information Bureau (Press Release), India, 29 July 2004


E-government: Beyond the UK

Computing Looks at How the Newly Expanded EU is Putting Government Services Online.
By 2010, the European Union aims to be the most competitive and dynamic knowledge-based economy in the world. After the expansion of the EU in May the 10 new states, with a total population of 75 million, will need to improve the way they interact, communicate and serve their citizens to contribute to this goal. It's a huge challenge that is at the heart of the debate on European integration. Franz-Reinhard Habbel, a member of the German Association of Towns and Municipalities, believes that more people and companies are coming closer together, resulting in international divisions of labour. "The exchange of goods between European countries will increase, and companies will reorganise production facilities," he predicted. "In the course of this development, open and worldwide communication standards, legal framework conditions and e-government services will gain even greater significance in the years ahead."

Many of the new EU countries are making good use of the transformation process for technological innovation and organisational reform. "In many areas, the new member states are leapfrogging structures that are decades old, reforming their administrations from the bottom up and adapting faster to new challenges posed by the international economy," said Habbel. "These states are also using young, internationally trained personnel at their ministries and in administrations. New public sector employees are in some cases highly educated and competent. "With their international language competence, they can make swifter use of technological and organisational know-how that is increasingly dominated by the English language." The decentralisation of administration in the former Eastern Bloc necessitates networked information and communication systems. The new members have no problems with legacy mainframe systems. Internet and web services are aiding greater efficiency of administrative activity. Driven by the EU's deregulation policy, the new states are organising their administration to be more transparent and service-oriented, with a stronger element of public-private partnerships (PPPs). In the Czech Republic, for example, every kindergarten has to carry out cost accounting. This task is entrusted to a PPP. According to Habbel this was the only way to reach the target at short notice, because local authorities have neither the personnel nor the funds to carry out such tasks.

Piero Corsini, public sector European vice president at IBM, cited three key challenges that need to be addressed in government: reshaping citizen and business services; managing organisational effectiveness; and securing financial performance. "This needs process transformation, resulting in cross-agency and cross-governmental processes, an integrated, open, autonomic and virtualised IT infrastructure, and above all cultural change within the organisations," said Corsini. Edwin Lau, project leader on e-government at the Organisation for Economic Co-operation and Development (OECD), maintained that it is imperative for online services to transform the structures, processes and culture of public administration. According to Lau, OECD countries are beginning to understand that services should be organised according to customer needs, and not the internal workings of government. "Seamless online service delivery aims to provide users with a coherent and integrated package of government information and services," he said. "Such services can provide more value to customers than separate services. Seamless services improve the business environment through the creation of one-stop services and administrative simplification, thereby reducing the cost of doing business. "From the customer's point of view, government should appear as one organisation; from the government agencies' point of view, the customer should appear as a single customer." Government organisations dealing with information society and e-government need to restructure, clearly separating concerns and responsibilities, according to Gartner analyst Andrea Di Maio. States need to appoint a "whole-of-government" chief information officer and as many domain CIOs as necessary. It is one area where the UK is taking the lead, said Di Maio.

From, UK, by Laurika Bretherton, 14 Jul 2004

Irish Farmers to Get E-facility for Cattle

Ireland's department of agriculture and food has launched an "Online Herd Profile Enquiry" system for farmers. The facility, which will be made available through the department's Web site, will enable farmers to view details of their cattle herd profiles on-line, along with movements into and out of herds during a specified period. Agriculture minister Joe Walsh said the new facility would provide farmers with a valuable tool to assist them in their record-keeping and management of their bovine herds. Farmers who have already registered for electronic services with the department will be able to access the herd profile facility immediately. Minister Walsh said the new facility forms part of the department's Animal Movement and Identification (AIM) system, which is currently being developed as a generic animal database covering cattle, sheep and pigs. The minister also announced that a facility to allow farmers to register calf births on-line would come into operation over the next few months.

From, Ireland, by sylvia Leatham, 14 July 2004

E-government Investment 'Invisible' to the Taxpayer

Survey reveals that 73 per cent of the public had not noticed the impact of the current investment in the UK's e-Government initiative. A survey undertaken by Transversal (, the eService software provider, has revealed that the majority of people have a poor perception of e-Government. Almost three quarters of the respondents said that they hadn't noticed the impact of the investment made in e-Government and 50 per cent of them were unhappy with the current level of customer service. The survey investigated how the public contacts local authorities and government departments; one of the objectives of e-Government is to make public services more accessible to citizens by investing in more effective web and call-centre based services. Communication by phone was still the favourite medium for 58 per cent of respondents, compared with only 32 per cent opting to use e-mail or the web. This suggests that local authorities and government departments have yet to establish an effective way to deal with enquiries electronically. This is certainly supported by the fact that when asked about ways to improve public sector websites, the most popular answer from respondents (32 per cent) was: the 'ability to answer questions from the public'. Furthermore, 88 per cent said they would be more likely to use these websites if their questions were answered immediately and correctly.

Gerard Buckley, CEO of Transversal, said: "Our survey suggests that more needs to be done to raise the current perception of e-Government. The public clearly hasn't noticed any improvement in public sector websites. While significant public funds have been ploughed in to content management and CRM systems, there are few public sector websites that allow us to ask a question and receive an intelligent answer in return. Not only is it highly frustrating; it increases our dependence on public sector call centres, many of which have been criticised for poor and slow service. If the government is really serious about e-Government, they must go back and do some basic things to ensure the public can easily access information and have the ability to ask and receive answers to their questions efficiently online." Transversal also believes the public sector is misguided in its tendency to implement limited static FAQ (frequently asked questions) lists which are not interactive and don't give Government an insight into public needs or concerns. According to Transversal, simple, but dynamic web self-service solutions hold the answer. Transversal's own solutions are driven by interactive knowledgebases that respond to online customer queries efficiently and more cost-effectively. They also use a dynamic Q&A process to build an up-to-date, self-organising knowledgebase of information that the public actually needs. Public sector organisations such as FastTrack Teaching ( and the British Army ( are amongst the first to implement such technology on their websites.

From SourceWire (press release), United Kingdom, 16 July 2004


Swiss Get E-gov Framework

The Swiss government adopted its first e-government enterprise architecture this month, a framework developed to ensure that new systems are designed with interoperability as a top priority. The new architecture -, now in version 1.1 - is based on the architecture of the German government and recommendations from international standards organizations, such as the Internet Engineering Task Force and the World Wide Web Consortium. Comments and suggestions from the public were also incorporated, although some of those comments will not be included until version 2.0, according to Swiss officials. As in the United States and other countries that have developed central e-government architectures, is not only focused achieving interoperability between new information technology systems and services but also on reducing the amount of money spent on redundant and incompatible systems. The architecture focuses on five aspects of e-government: communications protocols, Web services, data and metadata formats, information security and infrastructure. Each of those areas has more specific goals and requirements. Under security, for example, the architecture outlines a high-level data protection model and then details the different technologies to reach that goal, including public key infrastructure, access controls and IPSec.

From, by Diane Frank, 23 July 2004


E-Government Revolution

MANAMA - Bahrain is poised for an e-government revolution, revealed the Prime Minister yesterday. Ministries have already introduced space-age electronic programmes linked to the Internet - a vital step in paving the way to full implementation of an e-government system. Shaikh Khalifa bin Salman Al Khalifa predicted that this will significantly speed up government transactions and improve service quality and competence within weeks. A spin-off would also be savings in time and effort for both citizens and investors. The Premier made his remarks at the weekly meet-the-Press majlis, confirming that the kingdom is according high priority to developing media and electronic bodies at its ministries and official establishments. "It is manufacturing electronic programmes and upgrading media systems to powerfully and confidently get into the era of endless digital technology enabling the government to cope with accelerating developments in the field." He added that the next few months will witness dramatic new developments in the infrastructure of media systems and data bases at all ministries and economic, administrative and educational establishments. Bahrain will make maximum use of available national human potential to develop these systems.

From Gulf Daily News, Bahrain, 28 July 2004




US E-government Wins Higher Ratings

The US Office of Management and Budget has reported that many government departments have improved their online presence - but it appears to have failed by its own criteria. US federal agencies are beginning to make progress on e-government, says an official management report. The White House Office of Management and Budget (OMB) has signalled that US federal departments are finally making progress on e-government, according to the latest evaluation. The OMB, which is responsible for the Bush administration's management agenda, has previously rated only two agencies as successfully implementing their e-government programmes. But in its latest "scorecard", issued on Wednesday, it says that three further agencies are now meeting their targets, with several others said to be making progress in e-government. The OMB's scorecard rates progress according to a "traffic light" system. A red score means the agency has serious problems, yellow means some but not all targets have been achieved, and green means all criteria for success have been met. Scores are given across five areas of the president's management agenda. As well as e-government they include budget and performance integration, competitive sourcing, financial performance and human resources. Achieving green scores for e-government are the Transportation Department, the Environmental Protection Agency and the Small Business Administration. Under the last assessment only the Office of Personnel Management and the National Science Foundation were rated green. One major disappointment is the Department for Homeland Security. It is failing in several areas of the management agenda, and appears to be moving backwards on e-government with its rating dropping from yellow to red. Embarrassingly the OMB itself also failed to improve its ratings, receiving four red scores and a yellow across the management agenda.

From, UK, 15 July 2004

State of Local E-Government

Rising from 11th place in 2000, ninth in 2001 and second place in 2002, Michigan tops the list of the ten most digital states in the US on the Center for Digital Government's "2004 Digital States Survey." As Chief Strategy Officer of the Center for Digital Government, Paul W. Taylor, Ph.D, notes, "Michigan has changed the citizen and business experience through a broad suite of real-time transactional services, powered by an increasingly shared and robust infrastructure, designed around a coherent statewide architecture, and supported by a collaborative planning process." Rated on 60 criteria which fell into four general categories - service delivery, architecture and infrastructure, collaboration and leadership - the top ten digital states are: #1-Michigan, #2-Washington, #3-Viginia, #4-Indiana, #5-Arizona, #6-South Dakota, #7-Tennessee, #8-Utah, #9-Arkansas, #10-Colorado and North Carolina. The Digital States Survey was sponsored by Microsoft and Hewlett-Packard. Meanwhile, INPUT reports that spending by local and state governments in the US on e-government products and services will more than double in 2008 over spending levels in 2004. Specifically between 2006 and 2007, INPUT expects e-government spending will grow by a compound annual growth rate (CAGR) of 8%.

From eMarketer, New York, 23 July 2004

Michigan Tops in E-Gov't

Michigan's commitment to building e-government initiatives has propelled the state to the top of the 2004 Digital States Survey. "Michigan has been very dedicated in this area," said Cathilea Robinett, executive director/executive vice president of The Center for Digital Government and the Center for Digital Education. "The former governor put a lot of these initiatives in lace and the current governor has kept up the pace." The study, started in 1997, was designed to identify leadership roles while examining best practices, policies and progress made by state governments in their use of digital technologies to better serve their citizens and streamline operations.

Sponsored by Hewlett Packard, Intuit, Microsoft, and Symantec, the 2004 survey examined over 60 measurements in four broad areas - service delivery, architecture and infrastructure, collaboration, and leadership. Robinett explained that the exact measurements for the survey have been improved upon year to year but have remained similar. The chief difference comes in the emphasis on technological efficiency over content. "The 2004 criteria is a new instrument. It is more difficult and gives more weight to the back-end systems," said Robinett. "The criteria is now harder so states that make it into the top 10 are superior." Even with the changes to the measurement system, most of the high-ranking states in 2002 remained in the top 10, with a couple of notable exceptions. Wisconsin dropped from #5 in 2002 to #25 in 2004, while Connecticut - #10 in 2002 - fell off the new list completely.

"Connecticut has historically done well in the survey," Robinett noted. "However, the long-standing CIO has just resigned and that might have affected the completion of the questionnaire," said Robinett, referring to Gregg Regan, Connecticut's first chief information officer who held the position since 1997. Regan will be leaving on August 1 as part of a sweep of officials that served under former governor John Rowland, who resigned amid controversy and threats of impeachment. Robinett cites Virginia as an e-government success story, outlining the state's rise from below #25 in 2001 to #6 in 2002, and finally, #3 in 2004. "Governor Warner makes technology a priority for the administration," she said. Governments that embrace technology can propel up the list, and Robinett lists Arkansas and Colorado as additional examples.

From ClickZNews, United States, by Robyn Greenspan, 23 July 2004



Finnish Universities Plan E-government Encyclopedia

The University of Tampere in Finland and the Policy College of Finland are planning to publish an "Encyclopedia of Digital Government." According to the book's publishers, it will document "current trends and developments, challenges, and future prospects" for e-government around the world. The book aims to provide researchers, students and professionals with a broad basis for understanding the issues, technologies, theories and applications involved in e-government. Submissions are currently being invited for short articles written by e-government experts on topics ranging from digital democracy and the ethics of e-government to electronic service delivery and open source software. It is anticipated that the encyclopedia will be made available in late 2005.

From, Ireland, by Sylvia Leatham, Global E-government, 21 July 2004




Let Sunshine of Public Finance Shed over All Rural Areas

The problem of agriculture, rural areas and farmers is an imperative one of importance that must be dealt with in the course of building a well-off society. It was stressed during the newly-closed 10th meeting of the Standing Committee of the 10th National People's Congress that truly solving the problem of agriculture-rural areas and farmers should be put above all the works of importance and should be closely, firmly and appropriately attended to with an unremitting effort. As an important function sector of the state how will the finance earnestly carry out various financial agriculture-supporting policies and measures according to the relevant arrangements of the Central Party Committee and the State Council so as to ensure the benefits of the farmers? The reporter had an interview with Jin Renqing, Minister of the Ministry of Finance with regard to this question.

People's Daily Reporter: Minister Jin, once you said: "Let the sunshine of public finance shed over all the rural areas". What were your considerations when you mentioned this?

Jin Renqing, Minister: The essence of "Let the sunshine of public finance shed over all the rural areas" is to gradually put the affairs of the government at all levels within the scope of financial expenditure in the development of agriculture, rural areas and farmers. Without the well-off of the nine hundred million farmers the country as a whole cannot be considered as prosperous and without the stable life of these farmers the stability of the whole country is hard to be achieved. If the nine hundred million farmers cannot get a well-off life the moderate prosperity for the whole country is but an empty talk. To actively implement the scientific viewpoint of development we must conscientiously study and solve the problem of agriculture, rural areas and farmers and make every effort possible to reinforce the agriculture, develop the rural areas and enrich the farmers. Currently there still exist many contradictions and problems in China's agricultural and rural development. The foundation of agriculture is still fragile and the increment for farmers has gone difficult. The financial departments must have an overall view of the situation. According to the requirement of balanced urban and rural development, it has to lay the stress on solving the problem of agriculture, rural areas and farmers by giving it a prominent position and a vigorous support and it must realize two transforms in way of thinking. The one is to realize the transform from rural areas supporting urban areas to urban areas nurturing rural areas and second industry nurturing primary industry and the other is to adjust the distribution structure of public financial resources, realizing gradually the covering of public finance over rural areas and leaning toward rural areas. Financial investment should be raised in agriculture, rural areas and farmers.

PD reporter: "Giving more, taking less and loosening control" is the important guideline put forward by the central government to deal with the problem of agriculture, rural areas and farmers. What kinds of measures will the state finance adopt to truly carry out and put into effect this guideline?

Minister: First, "giving more" is to conscientiously increase the investment on agriculture, rural areas and farmers. Financial expenditure structure should be gradually adjusted and a steady-increase mechanism for supporting agriculture from financial expenditure should be established. This includes further increasing financial investment in agricultural infrastructure construction, forestry ecosystem construction, agricultural technology advancement, farmer training, agricultural product quality and safety system construction, comprehensive grain production capability construction, agricultural disaster and poverty relief and newly-increased public expenditure such as in education, healthcare and culture should mainly be used in rural areas, with national debt project funds also leaning toward agriculture, rural areas and farmers etc. In the meantime we should conscientiously carry out and further improve policies such as direct subsidies to grain-growing farmers and high-quality grain seeds. Second, "taking less" is to collect less taxes and fees from farmers. The key is to continue to deepen the reform of rural taxes and administrative charges, eliminate taxes on all special agricultural produces and gradually reduce the rates for agricultural taxes with agricultural taxes to be cancelled in five years. No tax and administrative charges specifically directed at farmers will again be raised in the future. We will further enforce the supervision over the collection of charges involving farmers so as to lighten the burden on farmers. Meanwhile we should conscientiously do a better work to settle and dissolve rural debts; actively and steadily push ahead the reform of township institutions, the reform of rural compulsory education system and supporting such reforms as the reform of county and township financial systems in order to consolidate the foundation of farmer burden alleviation.
Third, "loosening control" is to enliven the market and increase income. As far as finance is concerned we should vigorously create easy policy environment for agricultural structure adjustment, rural areas construction and farmer income increase.

PD reporter: Premier Wen Jiabao said in this year's Report On the Work of the Government that the government would call off the agricultural tax in five years. As the leading person in the State Council Agricultural Taxes and Administrative Charges Reform Working Group, can you make a comment on how to ensure the smooth implementation of this strategic arrangement?

Minister: First is to strengthen taxonomic guidance, help the local areas implement well the reform plans. Provinces that carry out the experimental reform of agricultural tax cancellation should explore new experience in pushing ahead and supporting reforms and appropriately handle relevant leftover problems. Second, finances at various levels should step up the support to reform. They should strive to increase revenue and reduce expenditure, adjust and optimize expenditure structure, actively raise funds and increase transfer payment to the grass-root level so as to ensure that the elimination and reduction of agricultural tax rates won't affect the operation of grass-root governments and the sound development of public undertakings, such as education in rural areas. The central finance will give proper subsidies to the local areas where elimination of taxes on special agricultural products, exemption of agricultural taxes and reduction of agricultural tax rates cause decreases in revenue, and the priority will be given to main grain-producing regions and the central and western China Third is to earnestly study new situations and new problems that emerge from further function transform of grass-root governments, improve and standardize rural area management and rural distribution relationship after the elimination of agricultural taxes; to make relevant preparation in advance so as to ensure the smooth implementation of the important reform objective, that is, the elimination of agricultural tax.
Forth is to reinforce policy propaganda training and conform the thinking of the cadres and the general public to the spirit of the central government decision; to step up forcefulness in supervision and checking and uncompromisingly correct out-of-line behaviors so as to secure for farmers the full benefits brought about by the policy.

PD reporter: Could you make a comment on this year's situation in regard of the implementation of agricultural tax reduction and elimination policy in various localities?

Minister: Currently the situation of agricultural tax reduction and cancellation in various localities is like this:
First, apart from Jilin and Heilongjiang, the two grain-producing provinces which were designated for implementing experimental agricultural tax elimination reform, Shanghai, Beijing, Tianjin, Zhejiang and Fujian also decided of their own accord to eradicate agricultural taxes while Tibet Autonomous Region has always been pursuing a policy of no agricultural and pastoral taxes. Besides, some other provinces (regions and cities) and some counties (cities) as well have also decided on their own to call off agricultural tax. Second, eleven grain-producing provinces (regions) including Hebei, Inner Mongolia, Liaoning, Shandong, Jiangsu, Jiangxi, Anhui, Henan, Hubei, Hunan and Sichuan and Guangdong province reduce agricultural tax rates by three percentage points. Third, other provinces reduce agricultural tax rates by one percentage point.

PD reporter: What are the key points and difficulties in the next step for tax and administrative charges experimental reform in rural areas?

Minister: Now the experimental reform of rural tax and administrative charges has entered the problem-tackling stage. The crucial points and difficulties are to do a good job on various supporting reforms. We should, through transforming township government function and streamlining the administrative structure and personnel, establish a capable and efficient administrative management system and an operation mechanism so as to ensure the effective operation of grass-root governments; we should continue to push ahead the reform on rural compulsory education management system, consolidate and perfect the rural compulsory education operation system that focuses on the county level, strengthen the funds security mechanism that features government investment and accelerate the reform on education administrative management system so as to ensure the healthy development of rural education undertaking; we should promote the reform on financial management system at the county and township level, further adjust the scope and structure of financial expenditure, establish standard financial transfer payment system and perfect public financial system. Meanwhile we should appropriately dissolve township and village debts according to the general guideline, that is, "stopping new debts, finding out the real amount, pinpointing responsibilities, taxonomic treatment for gradual digestion"; we should differentiate between the situations before and after the tax and charges reform and appropriately handle the problem of agricultural tax and charges balance due.

PD reporter: Grain security is directly linked to the security of national economy and the lasting stability and durable peace. As an important function department of the state in macro-control, what policies and measures will the Ministry of Finance adopt to encourage grain production?

Minister: In addition to the 30 billion yuan increase in expenditure on agriculture, rural areas and farmers in the central financial budget this year as compared to 2003, the Ministry of Finance is vigorously acting to implement a series of policies and measures aimed at increasing grain production and is making every effort to increase grain production and farmer income. First is to push ahead the work on grain direct subsidies in a comprehensive way. There are altogether 29 provinces (regions and cities) nationwide, which have implemented direct subsidies to grain-growing farmers totaling 11.6 billion yuan with 0.6 billion farmers benefiting from it. Second is to actively participate in mapping out a procurement floor price plan. We have determined on the principle that the central financial budget would bear the necessary expenses so as to ensure that the policy would be truly implemented and give assurance to the rice-growing farmers. Third is to increase the subsidy funds for the high-quality seeds of the early-season rice, middle-season rice and the northern japonica rice. Until now we have appropriated more than 1.2 billion yuan subsidy funds for the high-quality seeds of rice, wheat, corn and soybean etc. to 13 main grain-producing provinces and regions. Forth is to decide on the policy that the comprehensive agricultural development funds are used chiefly in main grain-producing regions and all the fund investment in improving agricultural production conditions will be free of charge. Fifth is to actively support and stabilize the prices of agricultural production means in financial and tax policies.

From People's Daily, China, 14 July 2004


Public Finance to Enter Chinese Rural Areas

China will adjust its public financial resources distribution system to help fund rural areas and offer preferential treatment to farmers. Chinese finance minister Jin Renqing revealed that China will cancel agricultural special products taxes with the exception of tobacco this year, reported Monday's CRI online. He says China will cancel all agricultural taxes in five years to relieve farmers' financial.

From Xinhua, China, 11 July 2004





Bank of Italy: Public Finance Needs Permanent Measures

Rome, Italy - The governor of the bank of Italy, Antonio Fazio, issued a warning over the state of Italian public finance. Following a Standard & Poor's downgrade of Italy's rating Fazio calls on the government to adopt permanent, structural measures en lieu of previous one-off measures. Fazio stressed the importance of adopting "enduring, permanent" virtuous public finance mechanisms, in keeping with the need to promote - not hamper - economic growth prospects. With regards to proposed tax cuts Fazio highlighted the need to avoid furthering budget deficit. Fazio's address at the ABI meeting is very much in keeping with prior concerns stated during his Final report last May 31. Fazio also called on political and social parties to "pursue cooperation and development policies", claiming sufficient margins for a change of course: "We must react, both domestically and Europe-wide, and must create economic conditions compatible with our proficient exploitation of the worldwide economic recovery, which by current indications promises to be sustained"

From Agencia Giornalistica Italia, Italy, 8 July 2004




A World Tax to Help the Poor

Reports of its death were greatly exaggerated. On the contrary: the idea of levying an international tax on currency transactions is discreetly making a comeback. It is still highly controversial, but do not rule it out. Here are the details. James Tobin, a professor at Yale University in the USA and a Nobel Economics Prize winner in 1981, originally launched the idea of an international tax on currency transactions. He wanted to "throw some sand in the wheels of excessively efficient international money markets" to tax transactions "that make the exchange rates for trade in goods and services volatile". Tobin did not see his tax as a potential generator of revenue. Many rejected his proposal as unrealistic and leading to capital flight as his idea was to tax as high as one per cent. Tobin's proposals have now been reviewed and proponents of a tax on currency transactions see it as a way of preventing speculation and as a means of collecting money for development aid purposes. According to these sources, US$1.5tn changes hands every day on the currency markets. A simple tax of 0.02 percent on those transactions could yield $300m a day. Crazy? Ask Chirac or the Belgian government.

Belgian influence
The Belgians are building a record of internationalism. They were the first to ban anti-personnel bombs - despite their significant arms industry - and, also campaigned successfully for an international convention banning such devices. The Treaty of Ottawa was adopted in 1997 and has now been ratified by 143 countries, with nine others about to complete the formality. Last month, Belgium was the first country in the world to adopt comprehensive legislation about a currency transaction tax. Belgium has a liberal/socialist coalition government and a liberal prime minister, Guy Verhofstadt, who France and Germany wanted as first president of the enlarged EU. Belgium's proposal is a much refined version of the Tobin tax and is based on proposals made by German Professor Paul Bernd Spahn, a former consultant at the International Monetary Fund. All currency transactions made in Belgium greater than EUR10,000 ($12,400) and all transactions on currencies involving a Belgian partner in any part of the world will be taxed at 0.02 per cent: with each party involved in the deal paying 0.01 per cent. The tax will be collected at the source by banks or stockbrokers, and auditing firms will be asked to report on company currency movements. Central banks will be exempted from the levy. Trade is not directly affected, per se - currency movements are. In the case of sharp change in the value of a currency, a second tier of the tax would come in effect that could be as high as 80 percent. This is aimed at discouraging speculative movements such as those that led to the 1997 Asian crisis, which cost 10 million jobs worldwide, according to the UN's International Labour Organisation. For Belgium, the tax would generate EUR600m ($739m) per year in average economic conditions. There is, however, a snag.

The Belgian law will only come into force once all countries belonging to the euro-zone have adopted similar legislation. The decision to adopt the 80 per cent emergency tax would be made at the level of the European council of ministers and monies collected through the tax would go to a European Development Fund for assistance to developing countries, according to Karine Lalieux, one of the socialist pioneers of the new law. She said: "It is a small, token step but a strong signal sent to other European countries." Is this a bluff? Not really. Similar legislation is already being contemplated in Spain and is part of the programme of the new prime minister, Jose Luis Rodriguez Zapatero. Germany and Italy are also said to have started parliamentary discussions on the issue. One of the main proponents of international taxation to fund development is France's President Jacques Chirac. Legislation similar to that of Belgium has already been adopted in Paris and included in the General Tax Code. However, it is also left dormant until European partners follow suit. Speaking last month at the G8 summit in Georgia, USA, Chirac said: "It is an idea that means more than a lot to me, quite simply because it is, in my view, indispensable and inevitable. It is absolutely necessary." Chirac intends to formalise his proposal on an international tax system at this year's UN General Assembly and will raise the issue at this autumn's meetings of the International Monetary Fund and the World Bank. He says an extra $50bn per year is needed if the world is to eradicate poverty. Our prediction: The latest proposals will be hard to ignore. Expect them to enlist growing political support. And do not panic.

From FOREIGN REPORT, 15 July 2004




Moupo Rejects Privatisation

BOTSWANA National Front (BNF) president Otsweletse Moupo says privatisation of national assets under the pretext that they can only be run efficiently by private entrepreneurs will impoverish Batswana. Speaking at the BNF's national conference in Selebi-Phikwe over the weekend, Moupo said his party believes that efficiency is a function of management, and not ownership, and that the private sector can be extremely inefficient in serving peoples' needs. As a result, he said the BNF rejects wholesale privatisation on the basis that some sectors of the economy are too vital to be left to the dictates of the private sector. Moupo said privatisation of state assets, services and parastatal organisations would also undermine national self-determination, because "apart from its economic benefits, the state control and operation of strategic sectors of the economy make social and political sense in that it ensures that such sectors are not foreign controlled and relatively more affordable and accessible are provided to the public". He said privatisation would have the effect of such sectors being taken over by foreign capital due to the weak and relatively undeveloped character of Botswana's capitalist class. "The idea that ordinary Batswana would be empowered by acquiring a stake in newly privatised enterprises is fraudulent and unrealistic," he said. Moupo further maintained that a people-centred development requires fundamental restructuring of the economy, which cannot be left to the market forces driven by profit. Instead, he said state control of assets provide a strategic lever to stimulate development, both by extending infrastructure and production land by maintaining cross-subsidies for the poor, small and medium enterprises, while privatisation rules out this strategic intervention. He maintained that privatisation will worsen unemployment and poverty in an economy already characterised by high levels of unemployment and poverty. He said the projected 6.7 percent growth of the economy this year would have a minimal impact on unemployment and poverty. He said independent studies indicate that official statistics seriously underestimate the unemployment situation in the country. He said structural weaknesses in the economy reflect the Botswana Democratic Party's wrong development strategy that has resulted in failure to diversify the economy. He said it was embarrassing that after 38 years of independence, the BDP has failed to develop the industrial and agricultural sector in an integrated manner. He said that the beverages industry and production of beers are the only areas where Botswana can claim to be self-sufficient. He said the BDP government has failed to identify and establish strategic industries by utilising the abundant raw materials Botswana has. He added that countries like India and Israel with no diamond mines have set up diamond industries employing, yet Botswana prefers to export jobs to other countries by selling unprocessed diamonds to the world market.

From Mmegi, Botswana, by Donny Dithato, Staff Writer, 21 July 2004

Gabon Starts Privatisation

Libreville - The Gabonese government on Saturday launched the partial privatisation of troubled state-owned airline Air Gabon, appealing to private investors in a newspaper announcement to make bids for a stake. In the statement placed in the L'Union daily, the economy ministry said it planned to float a "significant part" of Air Gabon's capital and was interested in bids from investors with financial capital or technical know-how. It said that the amount that the eventual "strategic partner" takes in the airline will be decided at a later date. Last week transport minister Paulette Missamo acknowledged that the airline's situation was "serious". Created in 1977, Air Gabon has built up debts of 28 billion CFA and has been forced to cancel several international routes.

From News24, South Africa, 18 July 2004

Private Sector Invited to Support Education

KwaZulu-Natal Education MEC Ina Cronje is confident that the department's budget for this year will enable the education system to deliver quality education in the province. Presenting her budget vote in the provincial legislature, Ms Cronje said partnership between government and the private sector was another way to supplement inadequate resources in the education system. She said contributions from business to education, especially tertiary and higher education institutions, would help to meet set targets in providing learner support materials and facilities such as laboratories and libraries. The budget vote comes almost a week after the Education Stakeholders Conference was held at the International Convention Centre in Durban where delegates also insisted on the need for public and private partnerships. MEC Cronje said minimal resources affected service delivery. "We are therefore grateful to and indeed highly appreciative of private sector initiatives that seek to augment and complement our action plans and initiatives," she added. Ms Cronje said direct funding was welcomed but the department also valued other contributions in forms of books for libraries, sports equipment and teacher exchange programmes. "We recognise that it is only through the pooling of resources that we can hope to address the backlogs in infrastructure and other needs." MEC Cronje said about 2 800 educators were needed to supplement the department's teaching staff and filling all the vacant posts would cost government about R185 million per year. An additional R20 million was also needed to subsidise the Primary School Nutrition Programme inherited from the Health Department in April, she said. "We will be hard pressed to try ensuring that this nutrition programme reaches all intended beneficiaries in the year ahead," added the MEC.

From, Africa, by Sibusiso Mboto, Pietermaritzburb of BuaNews (Pretoria), 22 July 2004


Survey Shows Govt's Resolve against Privatisation

Unaffected by the success on the disinvestment front that demonstrated "the depth of the Indian Capital market", the pre-budget Economic Survey Wednesday made clear the government's resolve against privatisation of profit-making PSUs. Instead, the government would "devolve full managerial and commerical autonomy to successful, profit-making companies operating in a competitive environment. Generally, profit-making companies will not be privatised," it said. Referring to the success of the six public issues which hit the markets in the last quarter of 2003-04, the Survey said about Rs 14,135 crore was realised, showing the depth of the capital market. Over 16 lakh retail investors were allotted shares in this exercise and the level of over-subscription ranged from 2.8 times in the case of IBP to 18.11 times in the case of Dredging Corporation. Even large issues like IPCL and GAIL were subscribed 4.8 and 9.1 times respectively. However, the Survey said government would only consider privatisation of sick units. "While every effort will be made to modernise and restructure sick public sector companies and revive sick industries, chronically loss-making companies will either be sold off, or closed, after all workers have got their legitimate dues and compensation," it added. The government also said it would "retain the existing 'navratna' companies in the public sector while these companies raise resources from the capital market".

From Times of India, India, 7 July 2004


Privatization Law Hampers Privatization

Turkish Union of Chambers and Commodity Exchanges (TOBB) President Rifat Hisarciklioglu claims that the 'Privatization Law' is the biggest obstacle to privatization in Turkey. "The only thing to do is add an article saying 'sold to the one giving the most money'. There is no need for details," said Hisarciklioglu as he argued that the law should certainly be changed. Privatization is a long debated issue in Turkey, as evidenced by the 125 cases that have been opened so far against privatization attempts in the country. There is no decided swing in either direction, as some of the cases were found in favor of the Privatization Board (OIB), while others were not. Cases against the privatization of large companies such as Turkey Petroleum Refinery (TUPRAS), Petrol Ofisi and Turk Telekom were opened.

Rifat Hisarciklioglu talked to Zaman about many issues from economic developments to the relations with European Union (EU), and from structural reforms to the encouragement law. Hisarciklioglu indicated that although Turkey was an example for the world with the economic reforms it made in the 80s, it has now fallen behind the countries it set an example for. Hisarciklioglu emphasized that the government should give priority to economic issues and bring them to its agenda. "The collapse of the walls in 1991 taught us, along with the world, a very important thing: Countries that do not have strong economies will lose. No matter how great a political or military power you are, countries lacking economic power lose in the end. Therefore we say that the most important issue for Turkey is to reveal its economic power in this tough region. The former governments could not manage this; this government should try to manage this." Hisarciklioglu explained that structural reforms should be sped up to open the way to investments and also for the provision of equal opportunity. He said that the structural reforms would let Turkish entrepreneurs compete with the world. Hisarciklioglu added that economic rules would be dominant in the economic area and everybody would benefit from equality of opportunity. Hisarciklioglu went on to indicate that privatization is the most important component of structural reforms. "The biggest obstacle to privatization is the Privatization Law itself. In my opinion, it is necessary to change the Privatization Law, instead of privatization. We should reduce the law to 3-4 articles and add an article saying 'sold to the one giving the most money'. There is no need for details. "Let's say that the state is selling one of its companies. Ten people participated in the tender. Then, the company is sold to the one giving the most money. This is so simple. In Turkey, the public still owns the 60 percent of the economy. The giant Soviet Union collapsed due to this mentality," Hisarciklioglu said as he emphasized that the current Privatization Law was chock full of extraneous details.

From Zaman, Turkey, by Necip Çakir, Ankara, 18 July 2004

Reinventing Government: Wholesale Privatisation is Not the Answer

A case has recently been made in these columns for "New Public Management (NPM) of the 80s" as being the "last word" on the subject of India's administrative reforms. The reality, however, is more complex. The "minimum government" doctrines that propounded wholesale privatisation of all PSUs, suggested school vouchers as the 'one-size-fits-all' solution for education and outsourcing of all government services (except perhaps for defence) as a panacea, have been displaced long ago by much more eclectic approaches. These look for public-private partnerships and creative ways to harness and combine the energies of the state and the market. It is true that the old, bureaucratic way of doing things is no longer acceptable. At a time of shrinking government budgets, expanding globalisation and accelerated time pressures, to tell the public to "come tomorrow as I have to take my tea-break" is not admissible. The notion, however, that the solution is simply to close the post office (or sell it off) has shown to be quite wrong. Who will deliver the mail to the villages and backwaters, and even to the lower-income neighbourhoods in the cities?

The real problem with Old Government, as David Osborne and Ted Gaebler argued in the early 1990s, was not so much with the bureaucrats themselves, as with bureaucratic structures, which often seem expressly designed to discourage innovation, speed of response and quality work. As they put it, government has to be catalytic, i.e., competitive rather than monopolistic, mission-driven rather than rule-bound, anticipatory and result-oriented. Has anybody tried to put this into practice, especially in the developing world? The answer is yes. Let me concentrate on one case where such an approach has been applied with considerable success over the past 14 years: Chile. Chile is especially interesting because it has gone from one extreme to another in a short time. Until 1973, Old Government was rampant, with over 600 enterprises in the public sector, all sorts of price controls and an average external tariff of 120 per cent. From 1973 to 1989, NPM was applied with a vengeance (General Pinochet always considered himself to be the true pioneer of free-market reforms, rather than those, in his view, Johnny-come-latelies - Margaret Thatcher and Ronald Reagan). Almost all PSUs were sold off, government jobs were slashed, the external tariff was cut to 10 per cent and even (this is my personal favourite) bus stops were eliminated, as they interfered with the freedom of bus drivers to stop where they saw fit. Since 1990, however, and with the return of democracy, an effort was made to find a balance between state and market.

Across a wide range of issues, the 'recipe' has been to bring together the public and the private sector to work for the common good, rather than have them continue to fight each other for turf. In international trade policy, rejecting the extremes of unilateral tariff reduction on the one hand, and grandiose regional integration schemes on the other, Chile opted for an intermediate solution: A "lateral" approach to regional integration, signing many bilateral and multilateral free trade agreements.In public infrastructure, it put in place, through a complex new legislation, a proactive public concessions programme which provided for the required six-fold increase in spending. As a result, the investment in public infrastructure has increased from $250 million a year in 1990 to $1.4 billion a year now. Much of this money is private and of foreign origin.In telecom, privatising the phone company is not enough. Unless there is a regulatory framework that guarantees a competitive environment, investment in this "cutting-edge" sector will not take place. Chile's imaginative telecommunications law from the mid-1990s has led to a teledensity of 40-plus mobile phones per 100 inhabitants and a situation in which one in every five Chileans uses the Internet.

As for capital inflows, "state minimalists" have often termed any interference with the free movement of capital as a "sin". Yet, in the 1990s, when many developing economies suffered from the ravages caused by "hot money" (billions of dollars that came in one day, only to leave the next) Chile's encaje, a system of capital controls that effectively taxed foreign short-term capital (but not long-term ones) allowed it to avoid some of the most damaging effects of such financial fluctuations. As a result of such policies, Chile doubled its per capita income (to $5,000), eliminated inflation (it was 1 per cent last year), grew at 7 per cent a year for much of the 1990s, attracted $4 billion a year in FDI (which at times reached a record 13 per cent of GDP) and was recently classified by A T Kearney among the top 10 off-shore destinations for MNCs. The broader point is a simple one. The wave of the present, and of the future, lies not in simply dismantling government in the somewhat naive belief that problems will take care of themselves. They won't. The imperative, rather, is for public policies that leverage the expertise, target-setting, and regulatory capacities of government with the resources and managerial abilities of the private sector. In the developing world, Chile is a case in point that such an approach can yield good results.

From Times of India, India, by Jorge Heine, 21 July 2004

Privatization Process Gains Momentum: Hafeez

ISLAMABAD - Minister for privatization and investment Dr.Abdul Hafeez Sheikh has said process of privatization is moving upward in the country due to concreted efforts of the government. Speaking in a PTV programme, he said over the fifteen years privatization process in the country is getting momentum with passage of time. The government has earned Rs.60 billion through privatization with the average of Rs.6 billion per year in ten years, he added. He said, during first three years of President General Pervez Musharraf government acquired Rs.36 billion through privatization with the average of Rs. 12 billion per years. Privatization Minister further said during present regime, government has earned Rs.43 billion through privatization process. In response to a question he said government wants to include common man in the process of privatization and investment. It was the views of the people that only rich people are participating in the privatization process, he said and added now the government is including middle class in privatization by offering shares through stock market. Abdul Hafeez Sheikh said 97,000 people have been awarded shares of OGCDL on the price of Rs.7 billion. Now the price of the shares of ODCDL has reached to Rs.15 billion. He said about 2,5800 people have applied for Southern Gas Company (SSGC), out of that only 68,000 people were award shares through ballot. About the process, he said government has published privatization forms in regional and national newspapers. Any one who is willing to purchase shares can use the cutting of newspapers, he added. In response to a question, he said only dead and under preformed institutions are being offered for the privatization. He disagreed with impression that employees have been forcefully retired from the organizations after privatization. During the process of privatizing an enterprise, privatization commission protects the rights of its employees, he added.

From Pakistan News Service, Pakistan, 23 July 2004

Government Unhappy over One-sided Contracts, Says Najib

KUALA LUMPUR: The Government wants to renegotiate some of the privatisation projects to ensure that it does not continue to be shortchanged and the people unduly burdened. The projects include the construction and management of highways and public utilities, said Deputy Prime Minister Datuk Seri Najib Tun Razak. "We want to ensure that the terms are fair for the Government and ultimately the people," he said at an investment seminar, organised by financial services group ECM Libra Bhd and a business weekly, here yesterday. Najib stresses on the need for the terms to be fair to the government and ultimately to the people. Asked during a question-and-answer session, Najib admitted he felt that some of the earlier privatisation deals were too one-sided in favour of the concessionaires. He attributed this to the government's inexperience in such matters, pointing out that the concessionaires came to the negotiating table with high-powered legal and merchant banking advisers. Najib cited one example of a one-sided deal – with Spanco Sdn Bhd, which has a privatisation contract to lease and maintain government vehicles. He said the Cabinet had ordered the deal to be renegotiated, not cancelled. Najib said the contracts given out to water concessionaires were also too favourable to them and the Government would be seeking a revision of the terms to make them fairer to it and consumers. On a lighter note, he said that this was because the Government wanted to repeat its victory in the recent general election. He said that if the water contracts were not renegotiated, the consumers would have to pay much higher water rates and the Government would not be able to win 90% of the parliamentary seats in the next elections.

Speaking to reporters later, Najib said the Government was determined to implement the open tender process for all its projects. "We are quite determined to implement open tenders except for some projects involving the security of the country," he said. He said the Government would also honour projects which had been given letters of award. Those like the RM14.5bil double-tracking rail project had been deferred "not because we did not think it was needed, but because we felt it was not needed right now," he said. "The Government will continue to prioritise plans based on affordability and cost and the impact of long-term competitiveness and the benefits to society," he said. Najib also said the Government planned to reduce the market capitalisation of government-linked companies (GLCs) in Bursa Malaysia. He said the GLCs made up one-third of market capitalisation in Bursa Malaysia. "We realised the shortage of liquidity in the stock market. We do not need to hold on to so many shares," he said. He said the Government had allowed GLCs like Telekom and Tenaga to sell down their equities. He said the Emplyees Provident Fund would also reduce its holdings in some listed companies. Speaking at the same event later, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said some of the rates charged by the public utility operators had been too high and all such projects would be renegotiated. "These rates must come down, given the level of subsidies involved in running the operations, he said. "We will renegotiate these projects by way of the 'carrot and stick' approach." He added that the renegotiation would affect current water operators and independent power producers (IPP).

At a press conference, he explained that the "stick" would include tightening current regulations to get the players to lower the rates while offering the "carrot" by way of giving them much bigger projects to manage. Dr Lim also indicated that the Government would follow closely the water sector in Britain, which had successfully managed utilities as regulated assets. "There will be no tariff increase as long as I am in this ministry," he added. Dr Lim also said that the Government would finalise the setting up of a National Water Commission by the end of the year. Sabah and Sarawak would be allowed to have their own commissions in view of the view of the difficulties to merge all the water authorities in the two states. Regarding power projects, he said the Government would negotiate on the current rates charged by the independent power producers in view of the huge government subsidies involved in running the power plants.

From The Star, Malaysia, by Nick Leong and Sidek Kamiso, 26 July 2004


Audit Chamber to Continue Privatization Analysis in Fall

The Russian Audit Chamber is to return to its analysis of the results of privatization in September, Chamber Deputy Director Alexander Semikolennikh said at a press conference. He said that on Friday the Audit Chamber collegium acknowledged an analytical note and a report by auditors on the results of privatization in Russia in 1993-2003, but it did not prepare a final conclusion. "The collegium was unable to reach a decision, the opinions of the auditors differed and it was decided to return to discussion of this issue in September," he said. Semikolennikh said that the analytical note consists of 146 sheets, divided into seven sections, including a basic analysis of the Russian economy in 1991-1002, an analysis of legislation, and an evaluation of the activity of state bodies involved in the privatization process. A separate section is dedicated to foreign investment. The auditors also analyzed the economic situation in the post crisis period and the social results of privatization, and the last section consists of conclusions and recommendations to state bodies. emikolennikh said that the analytical note states that the Russian economy in 1991-1992 was in the throes of "a deep systematic crisis." It says that privatization was one of the measures that should have ensured Russia's change over from a command to a market economy.

From Interfax, Russia, 2 July 2004

Commission Welcomes Industry-led Sustainable Chemistry Technology Platform

The establishment of innovative public-private partnerships in strategic areas of research through the use of so-called technology platforms is a stated Commission priority. Having recently taken a leading role in establishing a public-private partnership in plant biotechnology, the European association for bioindustries, EuropaBio, has now teamed up with CEFIC, the European chemical industry council, to establish a technology platform for sustainable chemistry. According to the vision laid out by EuropaBio and CEFIC, while the technology platform will be industry led, it will also feature strategic partnerships with academia, research centres, financial institutions, and regulatory authorities in order to foster the whole innovation process from idea to product launch. The platform will actually consist of three sub-platforms focussing on three separate areas considered crucial to Europe s chemical industry: industrial, or white, biotechnology, materials technology, and reaction and process design. Each sub-platform will develop a strategic vision and action plan of its own, while the technology platform as a whole will address issues and barriers common to all three areas, such as education and skills, knowledge and technology transfer, infrastructures, and raising public awareness.

From, France, 9 July 2004

Kosovo Renews Privatization Efforts, Names 13 Companies

Kosovo's privatization body has launched a new wave of sell-offs of communist-era property aimed at attracting much needed investment and reviving the province's stagnant economy. Officials from the United Nations-run Kosovo Trust Agency (KTA) Wednesday launched bidding for 13 companies, including a large metallurgical complex, a bottling company and a printing plant. The agency suspended the process after two rounds of sell-offs in October following concerns over possible corruption in the process. United Nations authorities took over administration of the province after NATO's 1999 airstrike campaign against Yugoslavia in response to the Kosovo crisis forced the withdrawal of government troops from the area.

From VOA News, 14 Jul 2004

Privatization Process Takes Off

Airport, Aviation Factory, Telecom Properties Top Government List
A total of 372 properties were put up for sale on Thursday in what the Minister of Economy, Industry and Trade Kakha Bendukidze says "is only the first stage of privatization in the country."At a press conference July 15, Bendukidze approved the list of the state-owned companies and properties to be privatized in 2004-2006 that covers entities both fully owned and partially owned by the state. He also announced that while arranging the sale of state enterprises, the Ministry of Economy will also work on selling state land. "In a year and a half a large part of the privatization process will already be complete," Bendukidze enthused. To speed the process, the ministry has created a web-site ( where further information and the list itself can be found. Bendukidze said that there is "large interest" in Georgian Telecom, and Georgia's hydroelectric stations. Major items include the aviation manufacturer Tbilaviamsheni, the Rustavi Metallurgy plant and the Tbilisi International Airport. Other items on the broad list range from the government's retreats in Tskhneti to the Batumi Meat Factory.

But while Bendukidze refused to name the possible investors, some businesses have already revealed their interest in Georgian infrastructure. The Russian financial-industrial group Industrial Investors expressed its interest in investing in Georgia in June, saying it may invest up to USD 200 million over the next three years in Georgia. The group is interested in buying the Chiatura Manganese Factory as well as the ports of Batumi and Poti. Batumi and Poti Ports are not currently on the list, but Bendukidze said that the ports would be privatized once the government has resolved some issues. Concerning Batumi Port, Bendukidze says there are some juridical issues to decide. "We have different ideas how to privatize Poti Port - whether to sell it as a whole or in parts," he said, adding that this dilemma will probably be solved within one month. He informed journalists that the government plans to convene a special conference in London this fall at which it will present the privatization process in Georgia.

A parallel conference will be held in New York next year, and a third in Israel. "We want to make such conferences regular events," Bendukidze said. These conferences are aimed at promoting awareness about Georgia, not just the privatization process. Bendukidze believes that some investors are concerned that doing business and living in Georgia involves great risk. "The interest of investors is rising but people are frightened because the information they possess about Georgia is really old and out of date," he said. As for Georgian businessmen, Bendukidze says there will be no discounts for them. Bendukidze has repeatedly said that the government is ready to sell all its assets, but he told the audience on Thursday, "When I say we need to sell everything, it does not mean that we must do it without much thinking." Nevertheless, the minister reaffirmed his intention to "sell everything." Talking about the infrastructure which cannot be privatized, the Minister says it can only mean those objects "which represent the self-identification of the nation. Please tell me what those objects are," Bendukidze demanded. Perhaps to emphasize this, the minister announced that the Tbilisi Philharmonic Hall would be privatized as well. "The Ministry of Culture will have the possibility to hold several concerts a year for a minimal payment," said Bendukidze. After a moment's pause, he added: "Nothing is free."

From, Georgia, by Christina Tashkevich, 16 July 2004

'Strategically Important Assets' and the Privatization Process

Minister of Economy Kakha Bendukidze does not recognize so called strategically important assets in his privatization plans, even though some of these objects cannot be privatized according to the Georgian constitution. At the beginning of the process the minister declared that everything would be sold "apart from conscious." Now he states that assets which are connected with national identity will not be sold, although there is some confusion regarding what exactly constitutes such an asset. In the Ministry of Economy there is a standard answer for opponents that there is no fixed or approved list of strategically important assets. They claim that if such assets exist, their sale should be forbidden in the constitution and later in the Law on Privatization. But the constitution mentions only those strategic sectors that affect crucial state decisions: the united energy system, communications, nationally-important ports, airports, air runways, nationally-important railways and motorways. According to this, it is rather easy to identify the assets which should be controlled by the state. For the moment, the ministry has postponed the sale of such assets as Georgian Railways, the hydroelectric power station at Enguri, airports, and the Batumi Port.

The sale of the Enguri power station will be postponed until settlement of the Georgia-Abkhazia conflict. As for the Georgian Railways, the decision has already been taken that the majority of shares of this limited liability company will belong to the state, although the possibility that ten percent will be sold to an international financial corporation has not been ruled out. Poti and Batumi ports will be sold at an international auction in the near future: Poti in two months and Batumi in four. Currently the government envisages receiving several hundred millions of GEL for the ports.How this process will be conducted is not yet clear. It has not yet been decided whether Poti Port will be privatized piece by piece or as a whole, while there is a good deal of legal work to be carried out regarding Batumi port. Until recently the Batumi port and oil refinery represented one unit and the Ministry of Economy is carrying out some studies to resolve the situation. Finally, it will be necessary to consider the interests of those companies which have leasing agreements with the state during the privatization process

From, Georgia, by M. Alkhazashvili, 20 July 2004

Uzbek Privatization Revenues Up 80% in H1

Uzbekistan took in 39.67 billion sum in January-June privatization revenues, an 80% year-on-year increase, the country's State Property Committee told Interfax. The state sold 1,132 enterprises and other state properties in the first half of 2004, almost twice as many as in the same period last year. Foreign investors bought stock in 36 enterprises for an overall roughly $21 million, or 60% more year-on-year. Investment obligations undertaken with privatization came to $33.11 million. The biggest privatization deal involving foreign investors for the half was the sale of 64% of the stock in Uzkabel (one of the largest cable and wire producers in the Commonwealth of Independent States) to the Zeromax Group of the United States for $10.5 million and $15 million worth of investment obligations. The established rules have 40% of privatization funds going to the state budget for the financing of investment projects and covering budget deficits; 25% remains with the particular enterprise for technical re-outfitting; 30% goes to regional administrations for developing market i nfrastructure; 5% remains with the State Property Committee.

From Interfax, Uzbekistan, 20 July 2004

France Adopts Privatization Bill

PARIS - The French parliament on Thursday adopted a bill to partially privatize the state-run electricity and gas utilities, a plan that had sparked broad protests from labor unions. Opponents of the measure to allow for the sale of stakes in Electricite de France and Gaz de France said they would appeal to the Constitutional Council, France's highest administrative body. Unions fear that changing the status of EDF and GDF would signal the start of full privatization. Many Socialist and Communist deputies voted against the bill. The center-right government argues the move will allow the companies to seek private investors and raise needed funds to defend themselves in a European energy market being opened up to competition. Under the final version of the bill, EDF and GDF are to be listed on the stock market. But in a concession to unions -- which wanted full state control -- the government vowed to retain no less than 70 percent of each company. The National Assembly, the lower house of the center-right-controlled parliament, approved the measure on Thursday, a day after the Senate. The bill also sets a framework to restructure the utilities' pension schemes but provides little insight on how EdF will finance some 15 billion euros ($18.4 billion) in unfunded pension liabilities. Over the last few months, striking power workers intermittently switched off street lights, cut electricity to homes and held massive protest marches against the plan. Protesters pulled the plug on the French presidential palace, the Eiffel Tower and the homes of politicians -- including the private home of Prime Minister Jean-Pierre Raffarin.

From CNN International, 22 July 2004


'05 Privatization Target Set at $1.4Bln

The government expects privatization to bring in at least 40 billion rubles ($1.38 billion) next year, the Economic Development and Trade Ministry said Wednesday. That sum includes the sale of a yet-to-be-specified stake in state-controlled telephone giant Svyazinvest. The Cabinet will discuss the 2005 privatization plan Thursday, though decisions relating to Svyazinvest may follow later in the year, said Yevgeny Ditrikh, deputy head of the ministry's department of property and land relations. The state expects to receive at least $1 billion for a stake in Svyazinvest, he said. According to various proposals under discussion, the stake could be anywhere from 25 percent to 75 percent minus one share. In 1997, Mustcom, a consortium led by financier George Soros and Interros head Vladimir Potanin, paid $1.875 billion for 25 percent plus one share in Svyazinvest. Earlier this year, Soros reportedly sold at least part of his stake in Mustcom to New York-based billionaire Len Blavatnik for about $700 million.

Overall, the government is considering the privatization of 1,324 state-owned enterprises and stakes it holds in 566 joint-stock companies. But the lion's share of expected revenues will come from only a handful of sales. The main cash generators -- aside from the Svyazinvest stake -- are expected to be the sales of a 17.81 percent stake in Magnitogorsk Iron and Steel Works for at least 8 billion rubles ($275 million); a 20 percent stake in Novorossiisk Sea Trading Port for 3 billion rubles; and a 20 percent stake in Tuapse Sea Trade Port on the Black Sea for 900 million rubles. Although not included in the 2005 privatization plan, Ditrikh said the government is not ruling out the sale of its 51.17 percent share in Aeroflot. It was unclear Wednesday when this decision will be made. In the financial sector the government is considering selling a number of stakes, including 75 percent of Transkreditbank, which serves Russian Railways Co., and 25 percent plus one share of insurer Rosgosstrakh, Interfax reported, citing the text of the 2005 privatization plan. The rest of Rosgosstrakh is controlled by Troika Dialog investment bank.

From Moscow Times, Russia, by Valeria Korchagina, 29 July 2004


Macki Says Privatisation Drive Will Promote Growth

MUSCAT - Ahmed bin Abdulnabi Macki, minister of national economy and deputy chairman of the Financial Affairs and Energy Resources Council, said the privatisation law issued by Royal Decree No. 77/2004 came in line with the privatisation policies adopted by the government to provide the private sector an opportunity to contribute to establishing, operating and financing services projects. It was also meant to promote government privatisation programmes to achieve sustainable development, promote growth rates and spread development all over the Sultanate. He added in a statement to Oman News Agency (ONA) that the current five-year development plan (2001-2005) accords special attention to privatisation. The articles of the privatisation law deals with privatisation goals and methods to implement the government programmes aimed at diversifying resources of the national income and expanding the country's productivity base. He noted that the law identifies required mechanism to restructure government departments, authorities and companies prior to privatising them wherever it is necessary. The law also regulates government quotas and shares and the signing of partnership contracts in capital and administration sectors. Macki said the law also identifies the authorities concerned with the implementation of privatisation programme, notably the privatisation ministerial committee and specifies its tasks and prerogatives. He pointed out that the privatisation law also stipulates for the regulatory rules including the importance to establish more than one company to provide the privatised service so as to avert monopoly. He concluded that the law accords special attention to the status of privatisation projects personnel to secure their rights and not to harm them.

From Times of Oman, Oman, 27 July 2004


Civil Aviation Authority advances privatisation drive - Jordan

AMMAN - In four years, the Civil Aviation Authority (CAA) is expected to be ready to hand over its key units to the private sector and become solely an independent transparent regulator of the aviation industry. A major stride was made in that direction on Monday when the Ministry of Transport signed a 2.4-million-euro contract for the restructuring of the CAA with a consortium headed by Lufthansa Consulting, and funded by the European Commission under the 20- million-euro Support to Regulatory Reform and Privatisation (SRRP) programme. According to a joint statement, the European Union and the ministry said the plan is aimed at modernising management, employment and business practices as well as improving performance, efficiency and productivity. Transport Minister Raed Abu Saud, the charge d'affaires at the European Commission Delegation to Jordan, Mario Mariani, and representatives of the consortium signed the agreement at a ceremony held at the ministry's. "This contract will help the CAA improve the quality of its services, which in turn will lead to enhance aviation security, safety and efficiency," Abu Saud said at the signing. "It will also encourage private sector investments in air transport services." Mariani stressed that the restructuring process will help the CAA meet EU and international standards and apply commercial practices to the civil aviation sector. "The ultimate beneficiaries are the end consumers, the passengers, who will enjoy higher quality services and more competitive prices," Mariani indicated.

The project director, Ingo Luschen from Lufthansa, said the consortium will work through the project to "develop an effective mechanism of regulation of infrastructure, in line with the best international practices." By the end of the work, he said, the CAA is expected to be able to develop a competitive edge and promote effective private participation in its services. According to an expert involved in the project, the government has taken a different course in the CAA privatisation process unlike the traditional one applied to other privatised entities like the Jordan Telecommunication Co. (JTC). This JTC was first turned into a state-owned company, which was later sold to the private sector, he said. But the CAA will not do that. The expert explained that CAA will develop its units: The airports, Queen Noor Technical College and Air Navigation Services (ANS) so that they function on a commercial basis, and when that is achieved, they will be attractive enough for the private sector to operate. Development will involve various aspects including human resources, accounting systems and aviation security, among others. During this four-year process, the CAA will remain acting as an operator and a regulator, but it must end up as an independent regulator leaving the operations aside to the private sector. Meanwhile, it will become an administratively and financially independent regulator that reports directly to the Council of Ministers, the experts explained.

Besides Lufthansa, the consortium includes the Irish Aviation Authority, the French SofreAvia, the consulting wing of the French Air Navigation and Air Traffic Control, and the local partner EcoConsult, which will restructure the CAA's financial system, according to its representative Loay Wahbeh. Monday's agreement was the third being signed within the framework of the SRRP in little over a month: a four-million-euro technical assistance contract was officially signed in mid-June for the upgrading of the Executive Privatisation Commission, while a similar, 3.7-million-euro technical assistance contract was signed in late June for the Electricity Regulatory Commission. Launched by the European Commission in late 2002, the SRRP programme aims at liberalising key infrastructure and enhancing public-private sector partnership. It seeks to strengthen the capacity of regulatory authorities to help the development of a climate of true competition, and avoid that public monopolies be replaced by private monopolies.

From MENAFN, Middle East, From Jordan Times, 27 July 2004



Brazil May Amend Terms of Private Partnerships Bill

Brazil's government will boost oversight and disclosure provisions in a bill to expand and regulate private company bids on public works contracts in a bid to gain passage of the legislation, Folha de S. Paulo reported. The government's planned amendments are aimed at meeting objections from opposition senators such as the Social Democracy Party's Tasso Jereissati that have stalled the Public-Private Partnerships Bill, Folha said, citing Budget and Planning Minister Guido Mantega. Lawmakers including Jereissati say the bill as currently drafted would allow states and municipalities to avoid debt caps established by the country's Fiscal Responsibility Law, Folha said. Ruling coalition Senator Roberto Saturnino Braga says the way the bill was proposed invites corruption, the paper said. The government expects the bill, known as the PPP, to attract as much as $4 billion in infrastructure projects in its first year.

From Bloomberg, Brazil, by Gueillermo Parra-Bernal, 16 July 2004


Health Minister Dosanjh Vows to Stem the Tide of Privatization in Health Care

OTTAWA - Ujjal Dosanjh lost no time in spelling out his main priority as Canada's minister of health Tuesday. Instead of scattering platitudes and ambiguities like most new cabinet entrants, the former B.C. premier headed straight into the eye of the storm minutes after being sworn into the federal Liberal cabinet of Prime Minister Paul Martin. "I can tell you that what we need to do is stem the tide of privatization in Canada and expand public delivery of health care so we have a stronger health care system for all Canadians," Dosanjh told reporters outside Rideau Hall. Dosanjh, 56, is a longtime political activist who once was attacked with a crowbar after denouncing violence in his Indo-Canadian community in 1981. It took 80 stitches to close his wounds but the attack didn't quench his spirit. He became Canada's first Indo-Canadian premier in February 2000 but the NDP government had become deeply unpopular, and he served for only about 15 months before it was crushed in the election of May 2001. "It's a little scary," said Conservative House Leader John Reynolds, who is also from British Columbia. "Dosanjh . . .led his party into the lowest victory that any other premier in our province has ever done. His government spent half a billion dollars building ferries that don't work and caused major problems in health care and now he's being asked to save us in health care." However it was Dosanjh who blew the whistle on suspect activity in his own government, publicly announcing that his boss, then-premier Glen Clark, was under criminal investigation. Clark resigned the next day. Dosanjh came to Canada in 1968, working as a janitor, night watchman and sawmill labourer but entered university as an adult student to earn a law degree. He became active in the Canadian Farmworkers Union some 20 years ago, campaigning for better working conditions. It's a topic he knows something about, having seriously injured his spine while working in the forest industry.

Those who champion single-tier medicine were enthusiastic about his appointment. "I think it's an inspired choice," said Harvey Voogd of Alberta-based Friends of Medicare. "I think his experience as a premier will give him a full understanding of the constraints and the opportunities that provincial premiers operate under." Anti-tobacco activists were also cheering because Dosanjh, during his term as B.C. attorney general, launched a landmark lawsuit against the tobacco industry in Canada. "Mr. Dosanjh brings with him a unique experience to the portfolio of health ministers," said Cynthia Callard of Physicians for a Smoke-Free Canada. "He is the only health minister . . . who has sued tobacco companies." The B.C. lawsuit claims that tobacco companies failed to warn consumers about the dangers of their products, that they targeted children and conspired to suppress research. The suit is still before the courts.

From, Canada, by Denis Bueckert, Canadian Press, 23 July 2004

Manchin Proposes Grants, Public-Private Partnerships for Jobs

CHARLESTON - Democratic candidate for governor Joe Manchin on Thursday unveiled a fourth part to his plan for West Virginia jobs, including a series of matching grant programs for worker training and education. Manchin also proposed a central clearinghouse for the state's education and training programs, and a "report card'' for grading every government program and agency involved in work force development. Manchin, the secretary of state, would also require a review of all higher education courses and programs "to ensure that they support current work force trends and meet the needs of businesses and industries in our state.'' "For example, community and technical colleges or specialized vocational and technical centers that are ocated in southern West Virginia, a region ripe for tourism growth, should be full of certificate programs and courses related to the tourism industry,'' Manchin said in his 12-page position paper.

One grant program proposed by Manchin would provide up to $500 to be matched by both the worker and the employer for high-tech skills training. "It will give workers flexibility and control in ensuring that work force training dollars are spent on the skills they need on the job,'' Manchin said. "Funding for the state's match will come from federal (Workforce Investment Act) dollars that we already receive.'' Manchin would also offer a second, $500-per-worker grant that employers would match to cover pre-employment and on-the-job training costs. Also funded through the WIA, Manchin said this proposal is modeled on a New Mexico initiative. Drawing from a preschool program in North Carolina, Manchin proposed the state enlist businesses to share their cutting-edge computers and software with local students. A state fund matched by private sector giving, meanwhile, would help schools offer hands-on programs like the Challenger Learning Center at Wheeling Jesuit University. Manchin said he would assign several of these efforts to the "jobs creation council'' he unveiled earlier in his campaign.

From Charleston Sunday Gazette Mail, WV, USA,by Lawrence Messina, Associated Press, 22 July 2004





HP calls for Closer Collaboration between Public and Private Sectors

William Mutell, vice-president of Global Security, Intelligence and Defence for HP, discussed how integrated solutions that facilitate the sharing of knowledge, information and intelligence in a secure manner, are key to the evolution of citizen security and global cross-border collaboration, during the NATO Forum on Business and Security in Istanbul, last month. HP is calling for a closer collaboration between the public sector and private companies to transform information technology into trusted systems based on simplicity, standards, modularity and integration. Mr Mutell predicted that security systems, currently physical and static, will migrate to become digital, mobile and virtual. These systems will be reliant on integration, simplicity and manageability. Private sector expertise and investment will be crucial to deliver integrated solutions that provide secure information for global cross-border collaboration. The public sector can improve its efficacy and cost-effectiveness by leveraging best practices and best-in-class solutions from the private sector.

Mr Mutell cited initiatives, requirements, and challenges often shared by public sector and private sector organisations. These include modernisation and Internet adoption; spending control and optimisation; information integration and knowledge management; and restructuring and decentralisation.Common objectives include the need to share information but protect sensitive sources and methods, and to act in real time. Organisations also share common challenges in fulfilling these objectives. For example, the stream of voice, data, and digital images for monitoring and analysis continues to expand exponentially and faster than the public sector alone can match; adequate, timely funding is a perennial problem; and robust, trusted systems are not in place. Mr Mutell also cited examples of HP's collaboration with public sector authorities in Europe on the development of technologies for individual identification, customs and border security, and emergency services. HP provides critical infrastructure and emergency preparedness and response technologies to a wide range of clients around the world in the areas of border, trade and tariff; first response; critical infrastructure and emergency preparedness and response; and defence and security priorities. HP has been instrumental in helping to create e-government infrastructures and other public sector solutions including public-private partnerships in Europe. E-government is the fastest growing sector of the information technology market in Europe and HP continues to invest resources in this area.

From Valletta Times, Malta, 11 July 2004


UNEP and Investors Join Forces to Launch New Responsible Investment Initiative

The United Nations Environment Programme (UNEP) will work with major institutional investors to develop a set of globally recognized principles for responsible investment by September 2005. The new principles will protect both the planet and long-term shareholder value by integrating environmental, social and governance concerns into investor and capital market considerations.Today's launch of the so-called "Responsible Investment Initiative" follows a meeting of more than 40 investors and fund managers held last month in Paris. At the meeting, organized by the UNEP Finance Initiative and hosted by Groupama Asset Management, participants proposed a global alliance of investors to guide responsible investment best practice. The initiative is being launched by UNEP in response to this proposal and the results of a 14-month study published last month by UNEP on the financial impacts of sustainable development. "The time is now right to develop principles to guide best practice in responsible investment decisions worldwide", said Klaus Toepfer, UNEP's Executive Director. "The world's largest banks have the Equator Principles to guide their actions in a manner supportive of sustainable development. We believe the investor community is now ready for similar principles to assist with the complex process of responsible investment that meets investor expectations", he said.

The global public and private investor community, which has a duty to protect long-term asset values, is a key sector in bringing environmental, social and governance disciplines to the heart of capital market considerations. "The short-termism inherent in our markets is a critical challenge when it comes to addressing environmental and broader sustainability issues", Mr. Toepfer continued. "Many investors, at best, view environment and social issues as a mid- to long-term concern and, therefore, of little relevance to the cut and thrust of modern capital markets. This is why asset owners can play such an important role. While investing in our capital markets, asset owners and their advisors are beginning to appreciate the importance of retaining a long-term view that anticipates new opportunities and threats."Sir Graeme Davies, Chairman of the Universities Superannuation Scheme Ltd, the third largest pension fund in the United Kingdom, said: "Pension funds have liabilities which last several decades so it's inevitable that the serious social and environmental issues which the UN system seeks to address will increasingly become material investment issues as well. "The focus of the investment system - on relative returns over the short or medium term - can mean both the impact of institutional investors on these wider issues and the investment opportunities they present get less attention than they deserve. That's why I welcome principles which focus attention on material but currently 'extra-financial' issues, principles which each fund can interpret and implement as it judges to be appropriate."

Commenting on the importance of UNEP's involvement, Sir Graeme said: "The UN and its sister organizations (e.g. the World Bank, OECD and IMF) have the international legitimacy and expertise to lead this work, as well as considerable clout as investors in their own right. That is why USS is participating in this important initiative." Keith Jones, CEO of Morley Fund Management, agreed, commenting: "It is clear to us that success for companies focused on consistent progress over time means embracing the concept of sustainable economic growth. And an aspect of Morley's success has been our use of SRI expertise to identify companies that are successful because they adopt environmental, social and corporate governance best practice as part of their own idea of winning. We look forward to working with UNEP on this."Michaeal Hölz of Deutsche Bank and chair of the UNEP Finance Initiative added: "UNEP FI is the largest and oldest public private partnership between the UN and the financial sector, with 226 member companies worldwide. As chair of this Initiative, Deutsche Bank firmly believes in the potential of public private partnerships to develop and ensure governance, environmental and social performance. The results of UNEP FI's Asset Management Working Group, which form the basis for this announcement, are an example of the success of this network."

UNEP will now convene a group of major investors in a learning process to jointly explore how to best develop and disseminate the principles. At the Paris meeting on 16 June investors also encouraged UNEP to coordinate its work with relevant international organizations including the World Bank, the OECD, the CFA institute, the International Corporate Governance Network and the Carbon Disclosure Project. Regional groups pinpointed for collaboration included the Investor Network on Climate Risk in the United States and the Institutional Investors Group on Climate Change in the United Kingdom. The new UNEP initiative is framed in support of the UN's Global Compact. It also builds on the recent launch of a UNEP study that warned of a threat to stock markets if environmental, social and governance issues are ignored by financial analysts and the broader investment community. The study, "The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing," was launched at the UN Global Compact Leaders Summit on 24 June in New York. To compile the study, UNEP worked with a group of 21 fund managers and brokerage houses to explore the impact of environmental, social and governance issues on share prices.UNEP and the asset management companies (listed below), working under a public-private partnership called the UNEP Finance Initiative, concluded the work by calling upon investors, government and business leaders to embed environmental, social and governance best practice at the heart of our markets. The new initiative to develop a responsible investment approach to guide investors is a response to that call.

Note to Editors
"The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing" is based on 11 sector reports by brokerage house analysts that were produced at the invitation of the UNEP Finance Initiative Asset Management Working Group. Copies of the report are available on the web at: The reports covering eight industry sectors provide a rich insight into how mainstream financial analysts are tackling a range of complex new threats and opportunities in their assessments of corporate performance. The report is a clear recognition from major financial institutions that the environmental and social components of sustainable development, as well as the economic considerations, should sit at the heart of investment and capital market considerations.

Some of the Key Findings Include:
Environmental, social and corporate governance issues affect long-term shareholder value. In some cases those effects may be profound. Financial research is hindered both due to the paucity of reporting on the part of many companies concerning environmental, social and corporate governance issues and because of insufficient disclosure of these issues in annual reports. Financial research is greatly aided when there are clear government positions with respect to environmental, social and corporate governance issues. In some cases analysts were not able to provide in-depth reports due to a lack of certainty regarding government policy. Brokerage houses contributing sector research for the UNEP FI report included: ABN AMRO Equities (UK); Deutsche Bank Global Equity Research and South African Equity Research; Dresdner Kleinwort Wasserstein Europe and UK; Goldman Sachs European Equity Research; HSBC; NikkoCitigroup Japan Equity Strategy; Nomura Japanese Equity Markets; UBS Global Equity Research; and West LB Equity Markets.The 12 financial institutions that worked with UNEP on the report include: Acuity Investment Management, Canada, BNP Paribas Asset Management, France Calvert Group Ltd., USA., Citigroup Asset Management, USA, Groupama Asset Management, France, Morley Fund Management, UK, Nikko Asset Management, Japan Old Mutual Asset Managers, South Africa, San Paolo IMI Asset Management, Italy, Storebrand Investments, Norway, ABN AMRO Asset Management, Brazil HSBC Asset Management, Europe

From Environmental News Network, CA, 16 July 2004


Korea, Japan, China Agree on IT Cooperation

The governments of Korea, Japan and China have agreed to start an international working group to share their advancements in information technology, extending a movement among Asian countries to jointly develop solutions to compete against dominant multinational high-tech firms such as Microsoft Corp. The three countries announced the launch of the East Asia ICT (CJK) Summit in Tokyo yesterday, with the sides agreeing to exchange information on markets, technology trends and standardization activities while encouraging business partnerships and strategic alliances in both the public and private sectors. The working group will run through December 2009 and include officials from governments, research institutes and private companies. The agreement resulted from a meeting of information and communication technology ministers from each country. Korean Information and Communication Minister Chin Dae-je (right) holds hands with his Japanese and Chinese counterparts after their meeting in Tokyo yesterday. [Ministry of Information and Communication] "Korea, China and Japan had been cooperating in expanding broadband Internet coverage and developing new IT industry growth engines over the past few years. The East Asian region has put itself in a position to become the trend setter in the global IT industry," said Korean Communication Minister Chin Dae-je. "The three countries have agreed to set up an advanced framework to cooperate on mobile communication, next generation Internet and open-source solutions among other sectors. We believe private companies to benefit greatly from this agreement," he added.

Under the agreement, the three countries will continue recent efforts to develop open-source software, setting up the tentatively named "Northeast Asia open-source software promotion forum," comprised of working-level officials from industries, research institutes and other related organizations to promote open-source applications. In other issues, the three countries decided to cooperate in developing third-generation mobile telephony and other wireless solutions, encouraging joint efforts in research and development of communication technologies and their standardization. The working group will jointly develop solutions for the next-generation Internet, most notably Internet protocol version 6, and radio frequency identification technology. The sides will cooperate in the development and promotion of IPv6 application services, while leading the experiments in setting up an interoperable regional network for RFID. The three countries also agreed to exchange information on digital-television technologies and broadcasting, while setting up an international network to counter computer security breaches.

Earlier this year, the countries of Thailand, Cambodia, Laos, Myanmar and Vietnam announced the development of open-source software to counter the market influence of Microsoft. The effort was followed by Korea and Japan shortly after, with the tech-savvy countries last month joining China to cooperate in developing open-source solutions and other information-technology sectors such as home networking.

From Korea Herald, South Korea, by Kim Tong-hyung, 26 July 2004

World Bank Funds Ghana's Urban Water Supply Project

Washington, DC - The World Bank Board of Executive Directors yesterday approved an International Development Association (IDA) credit* of US$103 million to assist the Government of Ghana in the reform of its urban water sector to provide potable water to a greater number of urban dwellers in the country. The Urban Water Project will assist the Ghana Water Company Limited in the effective management of its urban water systems, rehabilitate existing water treatment and transmission facilities and expand distribution networks. "The credit will assist in improving the reliability and financial viability of urban water utilities, provide opportunities for public-private partnerships, expand access to potable water for the urban poor and significantly increase the number of low-income households connected to the piped water network", said Alexander McPhail, the World Bank's Task Team Leader for the project. Only 10.3 million (51 percent) of Ghana's 20 million inhabitants are estimated to have access to improved water supply. In the country's urban areas, comprising about 8.4 million inhabitants, about 61 percent of the population has access. The first component of the project -- Network Expansion and Rehabilitation - will focus on increasing the amount of bulk water for distribution in Ghana's urban centers and in extending water supply services to low income areas. The physical works, to be carried out by Ghana Water Company Limited, the public utility, will cost $91.8 million, representing 73 percent of the project

Public-Private Partnership Development will be a key objective of the second component, which aims at improving customer satisfaction by engaging a private sector operator in a management contract to operate Ghana Water Company Limited's water systems throughout the country for five years. The Private Sector Participation component forms 6 percent of the project. A third component of the project, focusing on Capacity Building and Project Management, will focus on training and in the pursuit of sector reform aspects of urban water supply, including the need to adopt concrete policies and take actions that would effectively increase the number of low income household connections to the piped water networks. Institutions that will benefit in this component, on which $7.7 million will be disbursed, include the public utility, the sector ministry and the national independent regulator, Public Utilities Regulatory Commission, which has the responsibility for initiating pro-poor policies. Another donor participating in the project is the Nordic Development Fund that will provide an additional US$5 million. The Government of Ghana will provide an additional US$12 million to the project.

* The credit is on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent and a service charge of 0.75 percent. The credit's period of maturity is 40 years, including a 10-year period of grace.

From, Africa, 29 July 2004

IMF Cautions India against Hasty Privatisation

Washington - Sounding a note of caution for India's policy planners, a study by International Monetary Fund has advised against hasty privatisation and liberalisation saying a 7 per cent economic growth could still be achieved while avoiding the mistakes of Latin America. "Hastily embarking on an overly ambitious agenda of economic liberalisation and privatisation should be avoided if India wishes to achieve seven per cent growth rate, Arvind Subramanian of IMF's research department and Dani Rodrik, Professor, Harvard University, said in a major IMF working paper. The paper said that knee-jerk reaction of many economists to move as quickly and broadly as possible in areas such as privatisation, especially in infrastructure sectors, labour market reform and capital-account liberalisation has to be tempered with serious empirical analysis and an appropriate concern for social an distributional impacts. However, it pointed out that reforms in India had grown out of the stage from being crisis-driven to success-driven, which makes it more likely that they will be sustained and not subject to major reversals.

From Indian Express, India, 30 July 2004