Public-private Partnerships 'Have Failed Africa's Poor'

Public-private partnerships in Africa over the past 15 years have generally failed to provide much-needed water and electricity, a new study shows. According to a study by the South African Institute of International Affairs, about 600-million people in sub-Saharan Africa lack access to electricity, about 300-million have no access to safe water, and there were just eight telephones - either cellphone or fixed-line - per 100 inhabitants. The report, released yesterday, acknowledged successes achieved by public-private partnerships in sectors such as telecommunications, transport, ports and eco-tourism, but said that much still needed to be done to hone an effective partnership model in water and electricity provision.

The author of the report, Peter Farlam, said that governments chose public-private partnerships as an alternative to full privatisation, which had politically contentious aspects. He warned, however, that these partnerships were complex, and that governments should not expect them to be a "magic bullet". "The private sector is not always more efficient, and the service provision is often more expensive to the consumer," said Farlam. He cited the 20-year water and electricity provision contract signed between the government of Gabon and the French multinational Vivendi Water as an example. Vivendi was awarded the tender on the basis of a proposed 17,25% price reduction for water and electricity services, but the company later increased tariffs and reduced staff, contrary to the agreement. The 30-year concession of water provision on the Dolphin Coast also saw a French multinational SAUR Services securing better terms for itself and receiving a 21% return on investment — while its local partner, Siza, was not making a profit from the concession.

The Congress of South African Trade Unions (Cosatu), which describes public-private partnerships as "a form of privatisation", said private sector participation should not replace government, but should complement government capacity. Cosatu economist Neva Makgetla said that private-sector contractors often lied about their capacity to deliver, especially to poor areas. Makgetla said private delivery "is fine where it will not compromise development aims". Kogan Pillay of the national treasury's public-private partnership unit, said black economic empowerment was a prerequisite for all companies bidding for government tenders. Last year Finance Minister Trevor Manuel called on the private sector to partner government to fund infrastructure projects and fast-track the delivery of key services to the poor. The partnerships involve locking in long-term collaboration between parties to share the cost, rewards and risks of projects. Manuel said government's policy was to use "diverse sources of funding" to meet SA's infrastructure and service delivery needs. Some of the big projects which would require private sector participation include the proposed R7bn Gautrain Rapid Rail Link project, the R2,5bn Dube Trade Port which incorporates the King Shaka International Airport in Durban, and the building of schools and hospitals across the country.

From Business Day, South Africa, South Africa, by Khulu Phasiwe, 9 February 2005

Private Groups Partner Public Hospitals

Durban - Although developing at a slow pace, public-private partnerships (PPPs) in the hospital sector are possible and have proved feasible in at least two instances. The chairman of the Hospital Association of SA, Ramesh Bhoola, said last week that the private sector was keen to share its resources with the state, although red tape held up the process. Listed hospital group Netcare, which has a 30 percent share of the private hospital market, is partnering the Free State health department in Bloemfontein. The partnership is focused on the Universitas Hospital and Pelonomi Hospital and was signed in November 2002. Netcare's executive director, Ian Kadish, said the group had refurbished selected units at Pelonomi at a cost of R23 million. In addition, Netcare had built and was building state-of-the-art private facilities at both Universitas and Pelonomi. "In exchange for our investment, we were granted a concession of 16 to 21 years for the private facility, which has a potential for 270 beds," he said. Kadish said Netcare was sharing selected expensive radiology equipment with the state, resulting in improved service levels for both the public and private operators.

Community Healthcare Holdings, a black-owned healthcare company, has a 40 percent stake in the PPP at Bloemfontein, while Netcare holds 25 percent. Kadish said the remaining 35 percent would be offered to investors, empowerment shareholders, doctors and the state. Afrox Healthcare (Ahealth), with 26 percent of the private hospital market, and Seasons Star Trading 123 entered into a PPP with the Eastern Cape health department in 2002. Their joint venture is managing a new 30-bed private facility and the facilities and maintenance contract of the Humansdorp Hospital. Ahealth's managing director, Michael Flemming, said the project would cost R15 million, of which R13.5 million would be contributed by the consortium and R1.5 million by the health department. "The partnership agreement will operate for 20 years, after which the private facilities will be handed over to the health department," he said. Edwin Hertzog, the chairman of Medi-Clinic, which has a 23 percent share of the private hospital market, said the group had long had an eye on PPPs but was disappointed with development in that area. Medi-Clinic had won a proposal by the Western Cape health department for a PPP in Hermanus. "We have been negotiating for four years, and were recently informed that the PPP is going out to tender again."

From Business Report, South Africa, by Neesa Moodley, 15 February 2005

Public Sector Expenditure to Grow by 18,8%

South Africa's public sector capital expenditure (capex) is expected to grow at an average of 18,8% per annum over the year-year period covered by the 2005 Medium Term Expenditure Framework (MTEF) from an average of 11,7% a year between 2001/02 and 2004/05, the Treasury said in its Budget Review on Wednesday. The rising trend in public sector capital formation is driven by the finalisation of investment plans by big public enterprises, growth in public private partnerships (PPPs) and the stepping up of infrastructure allocations to all three spheres of government. The 2005 Budget allocates an additional R14,1-billion to infrastructure projects over the next three years compared with the 2004 MTEF. Increased allocations for municipal infrastructure over the next three years, particularly for sanitation, brings the total Municipal Infrastructure Grant (MIG) allocation to R21,2-billion.

The MIG grant is increased to accelerate the eradication of apartheid era backlogs in township roads, water, sanitation, street lighting, community centres, and to increase employment through labour intensive construction methods via the expanded public works programme. The provincial infrastructure grant, which funds provincial roads, schools and clinics, receives R13,2-billion over the next three years. The housing budget receives an additional R2-billion over the MTEF, bringing the total housing infrastructure budget over three years to R17,4-billion. In addition, a further R3-billion dedicated to community infrastructure is still to be allocated to departments over the MTEF. To meet South Africa's growing transport needs, an additional R1,35-billion over the MTEF period is allocated for roads and passenger rail infrastructure, such as stations and coach refurbishment. Of this amount, R500-million was allocated for provincial and national roads each, bringing the Department of Transport infrastructure transfers to R4,9-billion. A further R3-billion dedicated to transport systems infrastructure is still to be allocated to departments for both public transport and transport infrastructure for the 2010 Soccer World Cup. An additional R850-million over the MTEF is allocated for water resource infrastructure such as pipelines and dams, bringing water affairs infrastructure spending estimates to R2,4-billion over the MTEF.

Other large infrastructure budgets over the MTEF include the hospital revitalisation programme with health infrastructure expenditure projected to be R4,3-billion and national public works infrastructure expenditure of R3,3-billion. Over the next three years, infrastructure plans in the criminal justice sector include prison facilities to alleviate overcrowding (R3-billion), police stations (R1,2-billion) and court facilities (R820-million). About R1,1-billion will be spent on the electrification programme in the 2005/06. Major public enterprises have signalled expansion of their economic infrastructure. Transport utility Transnet has finalised its investment plans and expects to spend about R30-billion on infrastructure, including port and port operations infrastructure, freight rolling stock, rail, and fuel pipelines over the next three years. Eskom's infrastructure plans amount to R56-billion over the three years, and include investments in power generation, transmission, and distribution. Total capital expenditure by non-financial public enterprises is estimated to be about R115-billion over the MTEF. The delivery of infrastructure through public private partnerships (PPPs) slowed in 2004/05, mainly due to national road projects awaiting environmental approval. However, since the Medium Term Budget Policy Statement in October 2004, more PPP projects are envisaged, resulting in increased forward estimates.

From Mail & Guardian Online (subscription), by Helmo Preuss, Cape Town, South Africa, 23 February 2005

Singapore, Indonesia to Boost Bilateral Ties

Singapore - Singaporean and Indonesian leaders agreed Tuesday to enhance bilateral ties by tackling complex issues in a friendly way, reports Xinhua. During his two-day state visit to Singapore, Indonesian President Susilo Bambang Yudhoyono discussed bilateral issues with Singapore Prime Minister Lee Hsien Loong. They expressed their commitment to speeding up negotiations on an extradition treaty between the two countries. While assuring Susilo of Singapore's support in his anti-corruption efforts, Lee said it was not a problem that could be solved by just one treaty. Only one official meeting was held on this issue in mid-January and negotiators from the two sides are expected to meet again next month. No time frame has been set for this complex issue. During their meeting, Susilo also briefed Lee on his government's plan to reconstruct the tsunami-hit Aceh province, to which Singapore reiterated its commitments to help. Singapore was among the first to dispatch troops, helicopters and ships as well as relief personnel and supplies to Aceh after the Dec 26 tsunami disaster. Earlier Tuesday, Susilo was welcomed on his arrival by Lee at the Changi airport. After Malaysia, Singapore is the second stop of Susilo's introductory visits to the Association of Southeast Asian Nations' members since he became president in October.

From New Kerala, India, 15 February 2005

Tonio Fenech Addresses Seminar for Public Private Partnerships - Calls for More Commercial Ties between Malta and the United Kingdom

Attard - Parliamentary Secretary Tonio Fenech on Wednesday addressed a seminar on Public Private Partnerships: getting down to business at the Malta Financial Services Authority (MFSA) in Attard, on the occasion of the visit to the MFSA by the Lord Mayor of London Alderman Michael Savory. During the seminar, Fenech highlighted the specific relationship that exists between Malta and the UK and the development that went on in the financial sector, mentioning above all the opportunities that exist for UK companies in Malta. Tonio Fenech kicked off his speech stating that Malta is not just a tourism destination, but it has a relatively diversified its economy, with about a fifth of its economy coming from manufacturing activity and about another fifth from tourism. The remaining portions are contributed mainly by other services, including financial services, personal services, transport and communication and the public sector.

Fenech remarked that specifically, Malta and the UK have a longstanding association and very close commercial ties, mentioning that in 2004 Malta exported Euro250 million to the UK, making the UK the fourth largest market for Maltese goods and services. Malta, also imported Euro370 million from the UK during the same year and, despite its size, ranks number 58 in the UK's list of top markets. Further more, Tionio Fenech remarked that such international relationships have enabled Malta to continue developing into the knowledge economy and to keep up the valuable economic flows. "We believe that our joining the European Union is a natural progression in this direction, a step that formalises the benefits and responsibilities of bilateral relationships into a more comprehensive multilateral whole."

He then invited Lord Mayor to identify the possibility of more regular and focused relationship building initiatives with the City of London and went to give an overview over the development of Malta's financial sector since the late eighties up until Malta's EU accession in 2003 and the state of our industry today. "For decades our banking and insurance sector have played a support role as a provider of services to other sectors of the economy. Until relatively recent times, however, the market for banking and insurance services was predominantly a domestic one, and the tapping of foreign income and capital streams was left to other sectors of the economy, including manufacturing, maritime trading and tourism."

Tonio Fenech called for more collaboration at all levels between London and the Maltese financial community saying that both centres have a high regard for standards in the business. There is also an affinity in the legal and regulatory framework of the two financial centres that exists between few other Member States in the EU, Fenech remarked. "With particular reference to financial services, there is immense scope for nurturing business linkages with the City within the framework of a more integrated European market in financial services?We can also discuss the possibility of UK companies taking the opportunity of the current economic climate in the region, and using Malta as a bridge-head for commercial and financial operations in the Middle East and North African regions. We can discuss activities such as to establish a regional base for UK companies and the possibility of joint venturing with Maltese companies to exploit this opportunity."

From di-ve.com, Malta by Ronald Mizzi, 17 February 2005

All Take and No Give Puts Economy in Reverse

For the first time since the early 1980s, when Men at Work played Down Under, infrastructure has crept on to the Top 40 chart of public policy priorities. For the sake of our "Great Southern Land", let's hope it tops the chart with a bullet. Two decades of government obsession with debt avoidance have starved Australia of public infrastructure investment. Public-private partnerships (PPPs), offering the cosmetic appeal of keeping expensive new infrastructure off government books, have failed adequately to fill the void, often hampered by squabbles over an acceptable sharing of risks and returns. Australia is now paying a high price for the great infrastructure capital strike. Rail and port bottlenecks are stopping primary commodity exporters from taking full advantage of surging world prices. Energy and water distribution problems are holding back major new investment projects.

Dilapidated and inadequate infrastructure is not only contributing to Australia's worst export performance since World War II, it is tying our hands in the battle against the harmful economic consequences of an ageing population. Infrastructure is a key source of modern productivity growth and we need a more productive Australia to pay the health costs of our ageing population. Entranced by the chanting of the National Competition Policy mantra, governments and regulators have allowed access by competitors to established telecommunications, electricity and gas distribution networks at prices below the replacement costs of the assets. While regulators do include in the access charges an allowance for the cost of replacing the networks (in jargon, the weighted average cost of capital), they routinely set the allowance below the true replacement cost.

Cheap access to telecommunications, electricity and gas transmission networks might be good for competitors and for consumers in the short run, but who is going to replace the deteriorating assets? Not governments and not the asset owners confronted with returns below replacement cost. Telstra's telephone network is a classic case in point. For the first time, connections are falling as mobile phone users say no to connection fees and monthly line rentals. Competitor access to the ageing network is cheap thanks to the regulators. Telstra's competitors can cherry pick the profitable customers leaving the others to Telstra. When privatising the rest of Telstra the Federal Government will oblige the privatised company to pork-barrel National Party electorates.

How will a privatised Telstra, carrying an ageing network on its back, maintain adequate services to everyone, let alone roll out the broadband so essential to Australia's future competitiveness? The revenue that historically has funded the rural network increasingly is being siphoned off by competitors enjoying regulated cheap access to the Telstra network. States with corporatised electricity generation and distribution systems have milked them of surpluses to pay for other budget priorities. Victoria sold its electricity assets at prices way above their true value, leaving little remaining private cash for maintaining and augmenting the system. Imposing access to the assets of natural monopolies at charges below replacement cost is fashionable but short-sighted. The recently-released OECD survey of Australia identifies the problem but fails to offer a solution other than to correctly advocate a national approach to access regimes.

With the sale of Telstra inevitable after the Coalition gains control of the Senate on July 1, debate should now switch to the wisest use of the sale proceeds. Treasurer Peter Costello wants to use the money to retire Commonwealth debt. Wiping out the Commonwealth bond market is not good policy. Allowing Australia's infrastructure to go to rack and ruin is even worse. Australia urgently needs a national infrastructure plan involving the Commonwealth, the states and the private sector to identify our infrastructure requirements and make sure they are met. And the regulators need to recognise that the owners of distribution networks cannot maintain and replace these vital assets if their regulated access charges are screwed below replacement cost. If infrastructure is to break into the top ten for the first time since Men at Work hit number one, governments and regulators will need to start thinking about Australia's long-term future. Otherwise we will be in Dire Straits.

From On Line opinion, Australia, by Craig Emerson, 17 February, 2005

Commission Launches Ambitious Growth and Jobs Strategy for the EU

TThe European Commission today presented a new strategy for the EU to create more growth and jobs. The strategy aims to revitalize the so-called Lisbon Agenda - the EUs economic reform agenda from 2000. The actions proposed today by the European Commission could boost GDP by 3% by 2010 and create over 6 million jobs. There is a compelling case for urgent action. Five years after its launch, the Lisbon Strategy is not on track to deliver the expected results. To preserve the EU's model of sustainable development for the future, the competitiveness of the Union must be strengthened, its economy must be dynamised. The Commission sets out a concrete action programme for the EU and its Member States to generate sustained economic growth and more and better jobs. It calls on Member States to launch a new EU partnership for growth and jobs at the Spring European Council (22/23 March).

Commission President Barroso said: "Europe must do better. What we are proposing today is to release Europe's tremendous economic potential. This is needed to maintain the European model of society we value so much. This is the foundation for social justice and opportunity for all. Our ambition is undiminished. The overall Lisbon goals were right, but the implementation was poor. The lesson from the last five years is that we must re-focus this agenda to deliver results. With this new strategy, I believe we have the right tools to achieve our goals. The real issue is not about facts and figures on paper. It is about their impact on people's lives: how we pay for our education, pensions, social services and health care. With these proposals, we have made tough choices and tough judgements. Our vision is, and remains, sustainable development. The Commission will be undeterred in its push for economic renewal."

Vice-President Guenter Verheugen added: "This time we have to get it right, join forces and deliver on what our citizens care most about: jobs. Today's message is: There are no miracle solutions. We have to get down to work in a spirit of partnership and set the political framework to boost growth and jobs. The Commission will do its part that business can get on with business." The European Commission today presented its policy recommendations for the Mid-Term Review of the so-called Lisbon agenda. To move from words to action, the Commission believes a renewed drive and focus on fewer, achievable objectives are necessary. Lisbon has been blown off course by a combination of economic conditions, international uncertainty, slow progress in the Member States and a gradual loss of political focus. Faced with the challenge of ageing societies in Europe and intensifying international competition from countries such as India and China, Europe needs to raise its productivity growth and employ more people.

The Commission has put forward a concrete action programme which focuses on : Making Europe a more attractive place to invest and work - Completing the Single Market in areas which can deliver a real growth and job dividend and are of immediate relevance for consumers (a balanced agreement on services, regulated professions, energy, public procurement and financial services, a balanced agreement on REACH, the new framework for chemicals, which takes into account the impact of the competitiveness and innovation and SMEs). -Ensure open and competitive markets inside and outside Europe : redirect State aids towards sectors with high growth potential, create a SME friendly business environment, create access to third markets, simplify European and national regulation. -Improve European and national regulation to reduce the burden of administrative costs. -Expand and improve European infrastructure. -Continue to push for a Community patent and to move forward on a consolidated corporate tax base. -Knowledge and innovation for growth

Reach a 3% GDP target for R and D expenditure. -Promote the uptake of Information and Communication Technologies (ICT). -Promote the development of innovation poles linking regional centres, universities and businesses. -Boost European Technology Initiatives through public-private partnerships. -Promote energy efficient and low emission eco-innovations. -Contribute to a strong European industrial base through mobilising public and private partnerships. -The Commission is proposing the creation of a European Institute for Technology to attract the best minds, ideas and businesses to Europe.

Creating more and better jobs - Attract more people into employment in particular through action to reduce youth unemployment (European Youth initiative) and modernise social protection systems. -Increase the adaptability of workers and enterprises and the flexibility of labour markets through removing obstacles to labour mobility. -Invest more in human capital through better education and skills by reforming the EU Structural Fund and Cohesion Fund.Partnership: Responsibility for the broad policy areas of employment, macroeconomic policy and structural reforms is shared between the Union and the Member States: therefore a partnership is needed. The Action Programme makes a clear distinction between actions at Member States and European Union level: building on the experience of the Internal Market Programme - it identifies responsibilities, sets deadlines and measures progress. Governments should appoint a "Mr or Ms Lisbon" to take charge of implementation.

It simplifies the delivery mechanisms: there will be - after wide consultation - one single national action programme and one single national implementation report. Ambition has a cost: The Union will only be able to deliver on its investment and social cohesion objectives if the Member States are prepared to grant the EU a budget that reflects its key economic and social priorities and joint commitments.

From EUROPA (press release), Belgium, 2 February 2005

School Technology Innovation Centre Opens in Jordan

Microsoft works with the government of Jordan in support of the country's education initiatives - to make technology accessible to all and to enhance economic opportunity for people throughout Jordan - Technology has a powerful role to play in education, and nowhere more so than at the School Technology Innovation Centre in Jordan, which opened today. The aim of the centre is to help educators and educational policymakers realise the potential of information and communication technology ( ICT ) in teaching and learning. As part of the Microsoft Partners in Learning Program and in cooperation with local education authorities, Microsoft will create five additional School Technology Innovation Centres throughout Europe, the Middle East and Africa ( EMEA ) to test the latest technologies and content solutions for schools. Under the patronage of Minister of Education HE Dr Khaled Toukan, the Centre in Jordan is a result of a long-term collaboration between Microsoft, Hewlett-Packard, Cisco Systems Inc and Intel Corp. The official opening was held in a special ceremony at the Queen Rania Centre and was attended by Minister of Information and Communications Technology HE Nadia Al Sa'eed, Microsoft EMEA CEO Jean-Philippe Courtois, Clifford Harris, Director of Education Business at HP, Intel Middle East Education Manager Bassem Nasir, Cisco Systems Director of Operations for North America and Levant Yasser El Kady, the Jordan Education Initiative and a number of official, educational and media representatives.

"The School Technology Innovation Centre will provide lifelong learning opportunities for Jordanian citizens and provide them with the services and tools to become contributing members of the ICT economy," Toukan said. "Jordan is making great progress in its efforts to bridge the digital divide and open up economic opportunities for people and businesses throughout the kingdom," Courtois said."We are delighted to witness the rapid progress being made through these public- and private-sector partnerships that are being catalysed by the Jordan Education Initiative." The centre serves as a demonstration and learning laboratory for educational institutions in the region and will share innovative teaching practices and provide information, training and equipment for teachers to enhance their use of ICT in their classrooms and curricula. Under the Jordan Education Initiative ( JEI ) and in collaboration with the Ministry of Education and Menhaj Educational Technologies in Amman, Microsoft is also leading the development of the ICT National Curriculum, grades 1 to 10, for state schools. The curriculum consists of some 520 lessons, which have all been written locally and includes multimedia elements for every lesson.

"Microsoft's alliance with the Jordanian government is an extension of our broader commitment to helping individuals, communities and nations in the Middle East gain access to the technology, tools, skills and innovation they need to realise their full potential," said Mark East, Microsoft EMEA Senior Director of the Education Solutions Group, who also attended the event. "Through support of public-private partnerships such as the JEI and facilities such as the School Technology Innovation Centre, Microsoft is supporting the Jordanian government's vision for ICT education and building a strong knowledge economy." The Partners in Learning initiative supports Microsoft's long-term vision of digital inclusion. The programme offers a range of benefits to schools and colleges through grants, courseware, software licenses for refurbished computers and special software pricing. In 2004, Microsoft entered into Partners in Learning agreements with 64 countries worldwide and provided licensed copies of Microsoft Windows for approximately 2.8 million PCs at 15,676 schools.
The next five School Technology Innovation Centres will open in Belgium, the Czech Republic, Egypt, Northern Ireland and South Africa.

From Newswire.com (press release), 28 February 2005

IMF Managing Director Rodrigo de Rato's Statement at the Conclusion of his Visit

Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement on February 16 in Bogota: "I am very pleased to be today in Bogota, at the start of my current trip to four of the Andean countries. This is my fifth visit to Latin America since I took office in June of last year. I was privileged to meet with President Alvaro Uribe, Finance Minister Alberto Carrasquilla, Banco de la Republica General Manager Jose Dario Uribe, and other members of the President's economic team over lunch. Earlier today, I met with congressional leaders, representatives of labor unions, and with local economists. I also had the opportunity to visit the Hogar Sagrada Familia and the Hogar Comunitario, and see first hand the government's efforts to improve the quality of life for the most vulnerable.

Later today I shall meet with business leaders. "In my discussions with the President and his economic team, we focused on the situation in Latin America and in the global economy. There is a clear sense that the region is currently enjoying its best growth performance in a decade and Colombia's pursuit of sound economic policies has ensured that it is sharing fully in the upswing. Indeed, Colombia's economic program that has been supported by a precautionary Stand-By Arrangement from the Fund has already delivered clear dividends. Growth has steadily increased, inflation has declined to relatively low levels, the external situation is comfortable, and the public debt is on a clear downward path.

"The government is currently formulating a successor economic program for which they intend to request continuing Fund support through another precautionary Stand-By Arrangement. As part of this program, the government is looking to entrench macroeconomic stability, consolidate fiscal sustainability, and undertake structural reforms crucial to raising growth and employment and reducing poverty in Colombia. In particular, the authorities intend to well preserve central bank autonomy as part of their inflation targeting regime, while continuing fiscal reforms would make the tax structure and spending more efficient, and strengthen fiscal coordination among different levels of government. "We agreed that the sustained fiscal reforms would improve public savings and create room for expanding public and private investment in Colombia. In Colombia, as well as in other countries in Latin America, infrastructure needs are appropriately being given high priority, within a framework of assuring overall fiscal sustainability. I discussed with President Uribe the initiatives that are currently underway in the Fund to help countries better meet their infrastructure needs.

Colombia is among the countries that is participating in a pilot project toward this end and the Executive Board of the IMF will meet this spring, to develop the lessons and the priorities yielded by the experience of the nine countries that are part of the initiative. For Colombia, there is room to increase reliance on public-private partnerships and to give public enterprises a sufficiently commercial orientation that would attract increased investments in priority areas. "Finally, I welcome Colombia's continuing active fight against money laundering and the financing of terrorism. Colombia is part of the IMF's action plan in these areas which should help improve the investment climate. "We at the IMF support the government's economic program and President Uribe's vision for the future of Colombia's economy. We are confident that the authorities will meet the challenges facing Colombia, and we wish the country every success", Mr. de Rato said.

From Harold Doan and Associates, CA, (press release) IMF, 16 February 2005

Government Must Tighten Its Belt

During the four years of the Sila Calderon administration, big government became the order of the day. The Commonwealth's payroll increased by over 42,000 salaried employees from 2001 to 2004; $17 billion was issued in new debt; and the budget deficit for fiscal 2005 is projected to surpass more than $1 billion, a new record for the government of Puerto Rico. In Puerto Rico, there are over 320,000 public-sector employee -one out of every three salaried employees works for the government. By comparison, the private sector has lost nearly 51,000 jobs since 2001. The increase in government jobs is the primary reason Puerto Rico's unemployment is at 10% and not higher. To reduce its historic budget deficit and continue financing the massive payroll, the government is now talking about tax reform; another way of saying taxes will be increased, again. But the question that remains to be answered is how long should Puerto Rico's taxpayers continue to subsidize the government's inefficiency?

The fact is that more government employees and increased taxes over the past four years have not led to safer streets, better and accessible healthcare for those who need it, quality education, better streets, roads and highways, improved services to the business community, adequate infrastructure, and a long list of other services the government should provide and that would contribute to the quality of life in Puerto Rico. This year over 100,000 government employees will be renegotiating their collective bargaining agreements. Most will demand that the government (i.e. taxpayers) provide them with higher salaries and benefits. What about the demands for greater productivity from public employees? In Florida, there is one state government employee serving an average of 86 residents; in North Carolina, one state employee serves 59 residents; and in Puerto Rico, we have one state employee for every 13 residents. The inefficiency, lack of productivity, and mismanagement has gotten completely out of hand.

The crisis in the public sector has led many in the business community to demand that fiscal reform go along with the higher taxes the government in seeking. Others, such as the Ana G. Mendez University System has invested in economic studies to examine the possible restructuring of the island's government and help create economic growth. This was done in the hope that it would ignite a debate calling for a restructuring and downsizing of the commonwealth government. Florida, with a population of 17 million has 14 government agencies, says Jose F. Mendez, president of the university. By comparison, Puerto Rico with four million people has 130 government agencies. The economic study commissioned by Ana G. Mendez University provides excellent examples of state governments where public services were privatized, outsourced, or provided through joint public and private partnerships. The results are better services for the state's residents, a smaller state bureaucracy, increased employment, more productivity, and a reduced burden on the state's taxpayers. Florida and North Carolina were able to achieve these results with private sector-led initiatives and economic development.

Puerto Rico's private sector needs to carefully examine the example of these two states and others, and take a much more aggressive stance in demanding fiscal reform from the Commonwealth government. The private sector and business associations must also present a united front to call for increased productivity and fiscal reform from the government, no matter what political party one belongs to. This is an issue that has nothing to do with political views or status-related issues. It's simply an issue of economics. The government's restructuring in Florida and North Carolina didn't happen overnight. In the case of Florida, the achievements have taken more than a decade. The key point is that we have to start somewhere. Improved and quality public services must be demanded by Puerto Rico's private sector and its residents. It's about time we start to put our house in order to get our tax dollars' worth.

From Puerto Rico Herald, Puerto Rico. by Elisabeth Roman, 17 February 2005

Microsoft Further Strengthens Security Support for Global Governments With Security Cooperation Program

Initial Support Includes Governments of Canada, Chile, Norway and the United States - Redmond - As part of Microsoft Corp.'s (Nasdaq: MSFT - News) Government Leaders' Forum, hosted this week in Prague, Czech Republic, Bill Gates, Microsoft's chairman and chief software architect, today announced Microsoft's Security Cooperation Program (SCP). This offering provides a structured way for governments and Microsoft to engage in cooperative security activities in the areas of computer incident response, attack mitigation and citizen outreach. The goal of the SCP is to help governments address threats to national security, economic strength and public safety more efficiently and effectively through cooperative projects and information sharing.

This program launches with global support that includes Canada's Department of Public Safety and Emergency Preparedness, Chile's Ministry of the Interior, the Norwegian National Security Authority, and the state of Delaware Department of Technology and Information. (Logo: http://www.newscom.com/cgi-bin/prnh/ 20000822/MSFTLOGO). "This innovative alliance demonstrates the government of Canada's commitment to cybersecurity," said the Honorable Anne McLellan, deputy prime minister and minister of public safety and emergency preparedness for the government of Canad. "Prevention of cyberdisruptions and improving our capacity to respond to incidents are critical to securing both our economy and public safety."

As participants, Canada, Chile, Norway and the United States will work cooperatively with Microsoft, exchanging information that can be used to better anticipate, help prevent, and respond to and mitigate the effects of information technology (IT) security attacks. Among the types of data to be exchanged are these: - Information about publicly known and reported vulnerabilities that Microsoft is investigating; - Information about upcoming and released software updates to facilitate resource planning and deployment; - Security incident metrics; - Incident information in the event of a critical incident or emergency; - Information on Microsoft(R) product security, Microsoft's approach to security, and its incident response process.

In addition to information exchange, the SCP provides opportunities for cooperation with Microsoft on projects identified by the participating government agencies, including these: - Cooperative consumer outreach and education activities, including development and distribution of materials and special events; - Collaboration in computer incident response processes, including joint response in the event of an emergency. "The Digital Age creates some unique challenges for governments to help secure their computing environments," said Gerri Elliott, corporate vice president for the worldwide public sector at Microsoft. "By taking a collaborative approach with global governments, we can bring to bear the combined expertise from public and private sectors and enable governments to better prepare, manage and mitigate the impact of security incidents."

"Safeguarding IT security is a daunting job for any organization, but for a national government it's an especially formidable task," said Cristian Pena Arenas, chief technology officer for the government of Chile. "Partnerships between the private and public sector on programs like this Security Cooperation Program can contribute to better preparation and innovative solutions to address our unique challenges." "One of Delaware's technology goals is to be ever vigilant in increasing cybersecurity," said Thomas Jarrett, chief information officer for Delaware. "We are delighted to be an ally with Microsoft in its new Security Cooperation Program and look forward to providing improved cybersecurity defenses for our state government network." The Security Cooperation Program is a no-fee program that helps further strengthen Microsoft's comprehensive approach to providing the technology and services that help enable secure government computing environments. In addition, Microsoft introduced the Government Security Program in January 2003 that provides national governments with controlled access to Microsoft Windows(R) and Office source code and other technical information they need to be confident in the enhanced security features of the Windows platform. This initiative also builds on the security mobilization effort as part of Microsoft's Trustworthy Computing Initiative.

In addition to programs that address security concerns, Microsoft sponsors Government Leaders Forums around the world that bring together representatives from global governments and top businesses driving information, citizenship and technology agendas to discuss how countries can empower their citizens through the use of information technology. Among the programs discussed are ones that address the challenge of digital inclusion, such as the Local Language Program, Unlimited Potential, Partners in Learning and Windows XP Starter Edition. Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

From Yahoo News (press release), 2 February 2005

United States Commitment to Women in Europe and Eurasia

"I believe with all my power, when I go back to Kosovo, I will make a change in my government." - Kosovar woman working in the municipal government after completing a U.S.-supported Hope Fellowship training program on government. The United States carries out and/or sponsors programs for women in the region's new and emerging democracies in the following key areas: political participation and leadership training; promoting economic opportunity through entrepreneurial training, microenterprise development and access to credit; reducing domestic violence and human trafficking by educating law enforcement officials, teachers, social workers and the general public; and supporting healthcare with training of healthcare workers and increasing women's access to health education and athletics. Some of the projects the U.S. has implemented for women in the region include:

- Political Participation and Civil Society Leadership Training. The Hope Fellowship Program, funded by USAID, fosters leadership skills for qualified women from Kosovo and offers women internships in the United States. In November-December 2004, eight Hope Fellows participated in a two-month program at U.S. governmental organizations to gain leadership, technical and practical skills to apply to their own work in rebuilding Kosovo. To date, a total of 70 women from Kosovo have graduated from the Hope Fellowship program. In Georgia, women participated in a women's leadership program funded by the Freedom Support Act. In 2004, the Bureau of Educational and Cultural Affairs (ECA) awarded a grant to Kent State University to conduct a women's leadership exchange program between the United States and Southeastern Turkey. The project includes seminars in Ohio and Turkey on leadership skill-building, decision-making and conflict resolution.

- Legal Reform. With U.S. support, the Women's Consortium of Non-Governmental Associations (made up of more than 110 organizations from 42 regions of Russia) worked in close collaboration with the State Duma Committees to develop the draft law "On State Guarantees of Equal Rights and Equal Opportunities for Women and Men in the Russian Federation," which had its first reading in the Duma in April 2003.

- Women in Politics. Three women parliamentarians from Turkey participated in a three week International Visitor Leadership Program on "Women in U.S. Politics," September 2004. The program was designed to broaden their understanding of 1) how women can enter politics from the business sector, education, grassroots organizations, and volunteerism; and 2) the role of women's organizations in shaping political dialogue and developing and electing candidates.

- Networking. In 2003, with help from the United States, more than 100 women in the Radusa community of The Former Yugoslav Republic of Macedonia organized their own first-ever meeting to voice their concerns and identify priorities for their community. Their efforts resulted in an agreement to reconstruct a pedestrian bridge leading to the village's only elementary school.

Economic Opportunity - Public-Private Partnerships. Fifty women business owners from small- and medium-sized enterprises from Latvia, Lithuania, Estonia, Finland, Russia, Ukraine, and Belarus joined 50 U.S. women business leaders at the Riga Women Business Leaders Summit in Riga, Latvia September 2004. The Summit's aim was to help build economic relationships between the Baltic States, their neighbors, and the United States. The U.S. Embassy in Riga and the Latvian President Vaira Vike-Freiberga hosted the Summit, a successor to the 2002 Helsinki Women Business Leaders Summit that former U.S. Ambassador to Finland Bonnie McElveen-Hunter and U.S. businesswoman founded (http://www.usembassy.fi/servlet /PageServer?Page=hwbls/hwbls.html). For the second portion of the Riga Summit, the women traveled to the United States in December 2004 to attend a conference at Georgetown University to continue their partnerships, exchange business best practices and build management skills.

Entrepreneurial Training. With U.S. funding, the Public Organization on Support of Entrepreneurship, Women of Vision, and the Non-Commercial Partnership Siberian Educational Consulting Center are building a network of women across the Russian Far East to advocate for women's rights. The project will create awareness of women's issues, develop leadership skills, and foster regional, inter-cultural, and international exchanges. In October 2003, the United States made it possible for eight women from the Women's Training Center in Estonia to attend an international conference in St. Petersburg that helped women formulate strategies for achieving equality in practice. In Bulgaria, the United States funded 8 courses in shoe-making and sewing for 80 socially disadvantaged Roma women from the town of Dupnitsa and the suburb of Krainitsi. Each graduate will receive job placement in local factories.

Microenterprise Development. For several decades, the United States has been helping the poor - who depend on microenterprises for their survival - to gain access to capital, information, inputs, technologies, and markets. Women are major beneficiaries of microloans. In Azerbaijan, Mercy Corps is raising the incomes of rural women microentrepreneurs by making available high quality and reasonably priced veterinary and animal husbandry services for livestock and poultry. Such programs also help veterinarians expand their client base and improve their ability to diagnose and treat.

Credit Access. Sponsored by ECA, Elmir Ismayilov of Azerbaijan is a "Contemporary Issues Fellow" at the University of Michigan. In Azerbaijan, he helped develop local credit mechanisms for women. Today, in his work as a community development officer with a nonprofit agency, Ismayilov has helped financial institutions to revise lending methodologies, conduct outreach to women, and implement post loan trainings to minimize delinquency and business failure among women. The establishment of creditworthiness among women has laid a foundation for future access to funding and services from commercial financial institutions.

Business Development. Eight women business leaders and entrepreneurs from Bosnia-Herzegovina, Bulgaria, Latvia, Norway, Romania, and Switzerland participated in a 3-week European Regional International Visitor Leadership Program on "Business Development Issues for Women Business Leaders" in June 2004. Their program provided practical insights into initiatives that promote the development of women business owners; introduced federal, state, and local policies designed to advance women's prominence in business leadership; and provided opportunities for visitors to meet with women business leaders and owners in a variety of contexts throughout the United States, and who shared personal success stories and challenges.

Combating Domestic Violence - Training and Crisis Centers. A United States-sponsored program for 2003-04 trained between roughly 150 civil servants, medical workers, educators, and law-enforcement officers on how to combat domestic violence in Russia. The project promotes cooperation among NGOs and Russian state agencies on the prevention of family violence. The United States also is assisting one of Russia's oldest crisis centers to update and improve its statistical database on domestic violence. Access to this resource by lawyers and legal aid clinics will improve legal services for victims of domestic violence. Twelve women's organizations and crisis centers will receive a user's manual with a description of typical cases and recommended courses of action. Four centers will be trained directly on how to use and update the information.

Anti-Trafficking Efforts - Raising Awareness of Trafficking. In Estonia, the United States has provided resources to the public library at the Estonian Women's Studies and Resource Center to educate police and border guard officials, youth workers, social workers, teachers, and vocational counselors about the causes and consequences of prostitution and trafficking in women. In Albania, the U.S. Embassy Tirana's Democracy Commission Small Grants Program supported the production of a short drama by high school students depicting the tragedy of human trafficking. Written by a prominent Albanian author, the play addressed a range of issues associated with trafficking in persons.

Trafficking Prevention Centers. In Ukraine, the United States funded seven women's trafficking prevention centers (TPC). The TPCs have hotlines and offer referral services for health, legal, and psychological counseling. The Trafficking Prevention Program works with Ukrainian women's NGOs to provide job skills training, legal consulting services, and a public education campaign. Since 1998, 44,850 women have received consultations or job skills training; 5,040 women have found work or received a promotion due to the training program; 176 businesses have been created; and 26,149 women completed trafficking prevention or domestic violence awareness training.

Law Enforcement/Training. With U.S. support, the Women's Rights Center in Yerevan, Armenia, conducted 16 training sessions on domestic violence and 14 sessions on trafficking in women for 225 professionals from law-enforcement, government, NGOs, teachers, doctors, journalists, and psychologists between October 2002 and June 2003. The Center publishes a newsletter on women's issues and broadcasts TV and radio programs on the prevention of trafficking in persons and domestic violence against women. Two members of the Armenian Government's Interagency Group To Combat Trafficking visited the United States for further training; they had an opportunity to develop concrete approaches to combating trafficking. In Romania, the Regional Anti-Trafficking Best Practice Manual is the culmination of an intensive 2-year cooperation among the U.S., the UN Development Program (UNDP), and Romania's Ministry of Administration and the Interior. Written for border police officers, specialized police units, and prosecutors, the manual was officially adopted by the UN Office on Drugs and Crime at the regional law enforcement senior officials meeting in Vienna in December 2003.

Legal Reform. In July 2004, five representatives from the Finnish Parliament, Ministries, and NGO's participated in a 1-week Voluntary Visitor Program in Washington, DC, and Atlanta, Georgia, focusing on U.S. Governmental and non-governmental efforts in combating trafficking and assisting victims. The program gave the participants the opportunity to learn about U.S. legislation and strategies and NGOs' efforts in victim identification and assistance. It prepared them with models and ideas to help implement Finland's new anti-trafficking program. ECA also awarded grants in FY 2003 for anti-trafficking programs in Albania, Bulgaria, Bosnia-Herzegovina, Croatia, Kosovo, Macedonia, Romania, and Serbia and Montenegro. These exchanges targeted representatives from NGOs and government agencies and their efforts to draft new laws and legislation to address anti-trafficking efforts in their countries.

Healthcare - New Medical Equipment. The U.S. Government donated $500,000 in equipment and supplies to Uzbekistan to help continue to improve healthcare for women and children. New medical equipment will help twelve central hospitals, two maternity houses and selected rural medical points in the regions of Kashkadarya and Surkhandarya to Training programs on the new equipment will ensure that maternity wards and pediatric departments provide better care for their patients.

Training. In 2003, the United States brought maternal and child healthcare experts from Russia to demonstrate how the U.S. healthcare system in works to assure a healthy pregnancies, deliveries, and early childhoods. Participants became familiar with models of healthy lifestyles, childbirth education, and family-centered maternity care. The United States also helped train volunteers from the blind female community in Vladivostok, so they could provide psychological support to other visually impaired women and programs aimed at integrating blind women into community life. In addition, the project worked to create networks between organizations serving the blind and other women's NGOs in Vladivostok.

Education and Information. As part of a series of events on breast cancer, Kathy Pardew, wife of the U.S. Ambassador, hosted a book launch at the U.S. Embassy in Sofia, Bulgaria, in October 2003. The book, "Ask the Doctor: Breast Cancer" by Dr. V. Friedewald and Dr. A.U. Buzdar, was translated into Bulgarian by the embassy. Several dozen Bulgarian physicians, breast cancer survivors, and breast cancer activists attended the event, which was covered by the Bulgarian press. Speakers highlighted the changing public attitudes toward cancer and the importance of building networks among patient groups, women leaders, journalists, and doctors.

Athletics/Sports - Management Training. In April 2003, a delegation from the Ministry of Youth and Sports of Kosovo undertook a week-long Voluntary Visitor program in New York, Chicago, and Washington, D.C. on how to organize, recruit, fund, and manage girls/women's sports teams - specifically soccer - and the role that government, business, and private citizens play in managing and funding sports leagues. With very few organized sports teams for youth and none for girls, the officials hope to promote sports as a beneficial activity for girls. The development of sports programs for women and girls can have a positive effect on women's lives.

From All American Patriots (press release), Sweden, 15 February 2005

Non-Governmental Organisations, Private Sector Link Up in Cyberspace

An initiative to bring together the public and private sectors to promote biodiversity, conservation and economic development was kicked off yesterday as the world's first network of cooperation was inaugurated. "Perhaps we can speak of two sides of a coin, or two parts of a duet. What is key is that the two parts, namely non-government organisations (NGOs) on one side and the private sector on the other, must be considered together," said Paul Wedel, executive director of the Kenan Institute Asia (KIAsia), a Thai-US non-profit development organisation headquartered in Bangkok that is spearheading the move. The NGO and Private Sector Cooperation for Sustainable Development Network will provide "virtual" common ground for corporate and NGO groups from Asia and the Pacific to meet and share information online and explore internet communications through web conferencing and website partnerships.

NGOs, Mr Wedel said, can learn to better understand corporate intentions and identify areas of common interest. They are able to explore partnerships with the private sector to strengthen their own management skills, secure volunteers to carry out projects, cultivate funding sources, and strengthen advocacy efforts. Businesses, on the other hand, will gain knowledge and networks to fully implement strategies that incorporate social responsibility. Alliances with NGOs, especially those engaged in service delivery and other operational work, provide years of hands-on experience at the grassroots level, he said. "Some NGOs perhaps have a mind set about companies that is negative. Some company managers have a mind set about NGOs that they just create problems and solve nothing," said Mr Wedel. "In part, this because they have a relationship only when there is a problem. We want to get communication that is more regular, that is not tied to a conflict, so when there is a conflict they have a basis of trust." After online contact has been firmly established, he said, the network will encourage workshops on NGO and private-sector cooperation.

"Multinational companies have been working on upholding social issues for a long time, but Asian companies are still lagging behind, and for the project to work it must have the cooperation of local companies that are doing the polluting and destroying," Mr Wedel said. Paiboon Wattanasiritham, former chairman of the Community Organisations Development Institute (Thailand), and a member of Thailand's National Economic and Social Advisory Council, said only a few local business enterprises have signed up to join the network. Mr Paiboon said the government did not trust NGOs and their international donations, therefore forging a partnership with local companies would be key to providing ongoing funding while foreign firms could offer assistance in other forms such as sharing case studies.

Bangkok Post, Thailand, by Tul Pinkaew, 17 February 2005

What Should Be Done the Kyoto Protocol?

The Kyoto Protocol treaty has now entered into force for the 126 nations who have joined it so far. Now is the time to start thinking about how to engage all nations, including large emitters, in conversations about what to do after the treaty's expiration in 2012. This is exactly what the European Commission did recently by providing its first strategy for a post-Kyoto era, which will be discussed by the European Council next March. While the Kyoto Protocol represents only a modest reduction of carbon emissions in industrialized countries - 5.2 percent between 2008-2012 relative to 1990 levels, with varying targets for individual countries - real progress can be made in sustaining development efforts and preserving our planet. But first, all countries must integrate climate concerns into policy planning, and improve their governance in key sectors such as energy, infrastructure, and transport. In other words, we must act in accordance with the recognition that climate change and its effects on people in both rich and poor countries remains a threat to global security. At the end of the day, the long-term approach is likely to include a rules-based system, an incentives system, and investments in technology change. Increasingly, adaptation at the national level will be recognized as a major issue that will require appropriate funding. Dealing with the impacts of climate change and with emission reductions should not be mutually exclusive, but complementary.

Looking ahead to the post-Kyoto world offers us the chance to start a new dialogue and to look at new options on climate change. Nations could set the more ambitious goal of limiting the long-term change in the earth's temperature, and then assign emissions rights among countries in such a way that will eventually limit temperature increases to an acceptable level. This would require increasing investments in energy research and development for new and improved technologies - a process that needs to be supported by stronger public-private partnerships. Up to now, with only 15 percent of the world's population, rich countries have been responsible for more than 75 percent of global carbon dioxide (CO2) emissions, and thus most of the environmental damage. However, it is the developing countries - and thus the world's poor - who are most vulnerable. It is unrealistic to ask poor countries, where more than 1.6 billion people do not have access to clean energy and technologies, to bear the costs associated with the much needed technological change. Working with partners, the World Bank is supporting financial strategies to assist developing countries in meeting the costs caused by climate change. To date, over US$1 billion in Global Environment Facility (GEF) grants, together with about $8 billion in co-financing, have been committed to programs related to climate change.

While the regulatory mechanisms of both Kyoto and the European Trading Scheme have contributed to the establishment of an emerging market for carbon trading, interested parties are now concerned about the immediate future. Without a regulatory framework beyond 2012, the window of opportunity for initiating project-based transactions will close by 2006/2007. Given the long lead time between project preparation and the first benefits of emissions reductions, project developers have only a few years to act before carbon payments cease to make a meaningful contribution to project finance in the current context. Developing infrastructure projects is a long process that requires three or seven years from identification, through licensing, financing, and construction, and finally to the first certification of carbon emission reductions.

Therefore, projects need to be operational at the latest by 2007. The World Bank has been instrumental in advancing carbon finance as a viable development tool, and in facilitating private-sector participation in the market. The Bank is focused on representing the interests of its borrowing countries, helping them to develop assets for carbon trading according to their own priorities. But, without a commitment by governments to limit greenhouse gas emissions beyond 2012, the carbon market will remain uncertain, and the private sector - vital to the market's success - is unlikely to expand its participation in a meaningful and sustained way. According to a recent World Bank-supported survey of companis interested in carbon finance, only one in five respondents declared that they were interested in buying post-2012 emissions reductions. Now is the chance to look forward and enlist the global community - with no exclusions, although with differentiated responsibilities - in the pursuit of a more secure world, one that avoids the dire risks of environmental degradation and social conflict implied by inaction.

From Jakarta Post, Indonesia, by Ian Johnson, 17 February 2005

HP, U.K. Government Take Shared-Risk Approach to IT Services

A major infrastructure contract with the British government will test Hewlett-Packard's (HP's) service capabilities. The partnership's success will depend on strong governance standards. Event - On 16 February 2005, HP and the Foreign and Commonwealth Office (FCO) of the United Kingdom announced a seven-year partnership to upgrade the FCO's Firecrest IT infrastructure. HP and FCO Services, the FCO's internal IT provider, will jointly design, implement and operate a new version of the worldwide FCO infrastructure, to be called Future Firecrest.

Analysis - The HP/FCO agreement confirms Gartner's prediction of the continuing importance of outsourcing and service partnerships for enterprises burdened with obsolete IT infrastructure. Both public and private enterprises will continue to view such relationships as an attractive alternative to investing large percentages of their own IT budgets in infrastructure projects. This agreement is an important win for HP, because it allows the company to maintain momentum in a market where it is still a relatively new player. However, the deal will face significant challenges:

- The need to respond to changing requirements: Government bodies are inherently inflexible, preferring contracts with strict service-level agreements and fixed costs. This presents difficulties for any outsourcer or other service provider, especially over the course of a seven-year contract during which the FCO's needs will likely change significantly.

- Public scrutiny: The HP/FCO deal will face intense scrutiny from the public and the market, especially in light of significant challenges in previous U.K. government IT projects. HP and the FCO are taking a cautious joint-governance approach to the contract. HP will be accountable for overall service delivery, but FCO will share the risks, particularly for overseas installations, where it has considerable experience. This suggests that both parties recognize the challenges of the deal and understand that proper governance will be critical to the success of the arrangement.

- Recommendations: Recognize that execution — verified by strong business governance mechanisms — is the critical factor in the success of large-scale enterprise IT outsourcing and service delivery partnerships. Enterprises increasingly want to move more of the business risks of such projects toward their IT providers. However, a true partnership can be built only by strong, experienced organizations that share common objectives.

From Gartner, CT, by Gianluca Tramacere and Claudio Da Rold, 23 February 2005

United States Blocks Plans on UN Environment Body and Mercury Ban Talks

The United States has blocked attempts to up the status of the UN's environmental arm and to launch formal talks on an EU-backed treaty to ban mercury, which is linked to serious ailments in pregnant women and children, diplomats said Friday. At a week-long forum in the Kenyan capital Nairobi, Washington cratered a French-German proposal that would have turned the UN Environment Programme (UNEP) into a full-fledged United Nations agency with stronger powers and a bigger budget, they said. US opposition to the proposed mercury pact sparked "heated debate" at a meeting of UNEP's governing board, which ended up calling for voluntary public-private partnerships to reduce mercury levels, the diplomats said. "The United States vigorously opposed a legally binding treaty and managed to defer it to the next session of the UNEP governing council," said one diplomat who closely followed the proceedings. "The US does not like binding treaties," said another diplomat, who, like the first, spoke on condition of anonymity. "It generally hates bureaucracy (and) it fears that such a move would weaken its industries."

A 2003 UNEP study found that coal-fired power plants and artisanal mining of silver and gold were a major source of mercury found in the earth's air, soil and waterways and recommended action to reduce its presence. In response, several governments, including members of the European Union, called for a legally binding pact to ban mercury, which can cause brain damage in unborn children and infants and possibly impair their nervous systems. "We are disappointed that other countries did not allow the proposal to move forward," said Elena Lymberidi of the EU's Environmental Bureau. But the United States, which relies heavily on coal-generated electricity, objected, arguing that more study was needed before moving ahead with discussions on a treaty and proposing the partnerhip schemes as an alternative. "We came here with a position that we wanted to take immediate action through these partnerships and that we wanted to defer a decision on a legally binding instrument until we have results on this partnerships," said Claudia McMurray, the senior diplomat who led the US delegation to the UNEP meeting.

"The US came forward with this (partnership) idea and we are very pleased that we were able convince other countries that this is the credible way to move foward," she told AFP. But environmental watchdogs were unconvinced and denounced the United States for blocking consideration of the treaty, accusing it of hijacking efforts to get negotiations started for its own purposes. McMurray rejected charges that the United States was not doing enough to stem the presence of mercury, noting that emissions had been reduced by 45 percent since 1990 and that new rules requiring a 70-percent cut in emissions by coal-fired power plants would soon take effect. Instead of endorsing the opening of talks on a treaty, the conference urged nations to launch partnerships with industry to develop ways to reduce mercury, raise awareness of its risks to vulnerable groups and called on UNEP to carry out a comprehensive study its presence around the world. The United States also blocked the French-German proposal to elevate UNEP's status from programme to agency, would have notably meant its budget would be drawn from obligatory UN member dues instead of voluntary contributions. "We have had our discussions with the French and the Germans and we understand their point of view, unfortunately, at the moment, we do not share that view," McMurray said. "We think that UNEP is the appropriate forum and (it) does a very good job of bringing together countries on environmental issues," she added.

From Tribune de Geneve, Switzerland, 25 February 2005

Summary of the 23rd Session of the UNEP Governing Council/Global Ministerial Environment Forum (21-25 February 2005)

The 23rd session of the UN Environment Programme (UNEP) Governing Council/Global Ministerial Environment Forum (GC-23/GMEF) took place from 21-25 February 2005, at the United Nations Office at Nairobi, Kenya. Over 1000 participants, including delegates from 136 countries, as well as representatives of UN agencies, international organizations, academia, non-governmental organizations, business and industry, and youth organizations, attended the week-long gathering. Fifty-four of the 58 member States of the Governing Council were represented. During the week, delegates convened in plenary sessions, a Committee of the Whole (COW), a drafting group and two open-ended contact groups to consider draft decisions. From Monday to Wednesday, ministerial consultations considered the implementation of the internationally agreed development goals, including those in the Millennium Declaration, with a focus on environment and poverty, environmental sustainability, and gender and the environment.

The Governing Council/GMEF concluded its work by adopting more than 11 decisions on issues relating to small island developing States, chemicals management, UNEP's water policy and strategy, international environmental governance, gender equality and the environment, keeping the world environment situation under review, Programme of Work and Budget, administrative and other budgetary matters, poverty and the environment, environmental and equity considerations in the procurement practices of UNEP, and strengthening environmental emergency response and developing disaster prevention, preparedness, mitigation and early warning systems in the aftermath of the Indian Ocean tsunami disaster. As delegates left the UN complex in Gigiri on Friday evening, they collectively breathed a sigh of relief. Not only had they survived a complex, often chaotic, week-long meeting, with a lengthy agenda, a staggering number of events, and an immense volume of documentation, but they also managed to accomplish most of the objectives of GC-23/GMEF. In a meeting devoid of grandstanding and politicking, eased along by seasoned chairpersons and facilitators, delegates succeeded in approving a comprehensive work programme and a hefty spending programme, which rivaled the record set in Mostafa Tolba's time.

A BRIEF HISTORY OF THE UNEP GC/GMEF - In response to the Stockholm Conference on the Human Environment, the UN General Assembly, in resolution 2997 (XXVII) of 1972 officially established UNEP as the central node for global environmental cooperation and treaty making. The resolution also established the UNEP Governing Council (GC) to provide a forum for the international community to address major and emerging environmental policy issues. The GC's responsibilities include the promotion of international environmental cooperation and the recommendation of policies to achieve this, and the provision of policy guidance for the direction and coordination of environmental programmes in the UN system. In 1992, the UN Conference on Environment and Development reaffirmed UNEP's mandate as the principal environment body within the UN system and supported an enhanced and strengthened role for UNEP and its GC. The Global Ministerial Environment Forum (GMEF) is constituted by the UNEP Governing Council as envisaged in UN General Assembly resolution 53/242. The purpose of the GMEF is to institute a process for ensuring policy coherence in the environment field, as proposed in the 1998 report of the UN Secretary-General on environment and human settlements.

19TH SESSION OF THE GOVERNING COUNCIL: In 1997, the Governing Council met for its 19th session (GC-19), the first part of which took place from 27 January to 7 February, and the second part from 3-4 April at UNEP headquarters in Nairobi, Kenya. At GC-19, delegates adopted the Nairobi Declaration on the Role and Mandate of UNEP, which expanded the mandate to include: analyzing the state of the global environment; assessing global and regional environmental trends; providing policy advice and early warning information on environmental threats; and catalyzing and promoting international cooperation and action, based on the best scientific and technical capabilities available. The Nairobi Declaration was formally endorsed in June 1997 at the 19th Special Session of the UN General Assembly.

20TH SESSION OF THE GOVERNING COUNCIL: The 20th session of the Governing Council took place from 1-5 February 1999, in Nairobi, and marked the first meeting of the Council since the appointment of Klaus Toepfer as UNEP's fourth Executive Director. The Council adopted over 30 decisions on a range of topics, including: the Environment Fund, administrative and budgetary matters; linkages among and support to environmental and environment-related conventions; and policy issues, including the state of the environment, coordination and cooperation within and outside the UN, UNEP governance and emerging policy issues.

SIXTH SPECIAL SESSION OF THE GOVERNING COUNCIL /GMEF: The sixth Special Session of the Governing Council/Global Ministerial Environment Forum (GCSS-6/GMEF) took place from 29-31 May 2000, in Malmoe, Sweden. Ministers adopted the Malmö Ministerial Declaration, which agreed that the 2002 World Summit on Sustainable Development should review the requirements for a greatly strengthened institutional structure for international environmental governance (IEG).

21ST SESSION OF THE GOVERNING COUNCIL/GMEF: The 21st session of the Governing Council/Global Ministerial Environment Forum (GC-21/GMEF) took place from 5-9 February 2001, in Nairobi. A high-level ministerial dialogue discussed implementation of the Nairobi Declaration and the Malmoe Ministerial Declaration. GC-21/GMEF also established the Open-ended Intergovernmental Group of Ministers or Their Representatives (IGM) to undertake a comprehensive policy-oriented assessment of existing institutional weaknesses as well as future needs and options for strengthening IEG. The IGM met five times, and reported on its work to GCSS-7/GMEF.

SEVENTH SPECIAL SESSION OF THE GOVERNING COUNCIL/GMEF: The seventh Special Session of the Governing Council/Global Ministerial Environment Forum (GCSS-7/GMEF) was held from 13-15 February 2002, in Cartagena, Colombia. Delegates adopted the IGM report on IEG, which notes that the international environmental governance process had highlighted the need for a high-level environment policy forum as one of the cornerstones of an effective system of international environmental governance, and noted that the GC/GMEF should be utilized more effectively in promoting international cooperation in the field of the environment, providing broad policy advice and guidance, and identifying global environmental priorities.

The IGM report also recommended that in order to play its role as the high-level environmental policy forum in the UN system, the GC/GMEF should: keep under review the world environment situation and develop policy responses in order to ensure that emerging environmental problems of wide international significance receive appropriate and adequate consideration based on sound science; provide general policy guidance for the direction and coordination of environmental programmes and make cross-cutting recommendations; promote international cooperation in the field of the environment and recommend policies to this end; and strengthen the coordination and institutional requirements for international environmental policy.

The report also highlighted the need to ensure the universal participation of member States of the UN and its specialized agencies in the work of the GC/GMEF, and to strengthen UNEP's financial situation. In addition to the IGM report, delegates adopted decisions relating to: a strategic approach to chemicals management at the global level; compliance with and enforcement of multilateral environmental agreements; the development of a strategy for the active engagement of civil society, the private sector and Major Groups in the work of UNEP; the implementation of the Global Programme of Action for the Protection of the Marine Environment from Land-based Activities; and the environmental situation in the occupied Palestinian territories.

- 22ND SESSION OF THE GOVERNING COUNCIL/ GMEF: The 22nd session of the Governing Council/Global Ministerial Environment Forum (GC-22/GMEF) took place from 3-7 February 2003, in Nairobi. GC-22/GMEF adopted more than 40 decisions on issues relating to IEG, post-conflict environmental assessment, UNEP's water policy and strategy, a strategic approach to international chemicals management, a mercury programme, support to Africa, production and consumption patterns, and the environment and cultural diversity. Delegates also adopted UNEP's Programme of Work and Budget for the biennium 2004-2005.

- EIGHTH SPECIAL SESSION OF THE GOVERNING COUNCIL/GMEF: The eighth Special Session of UNEP's Governing Council/Global Ministerial Environment Forum (GCSS-8/GMEF) took place from 29-31 March 2004, in Jeju, Republic of Korea. At the conclusion of the ministerial consultations, delegates adopted the "Jeju Initiative," containing the Chair's summary of the discussions. GCSS-8/GMEF also adopted four decisions on: small island developing States; waste management; regional annexes; and the implementation of decision GCSS.VII/1 on IEG.

REPORT OF THE MEETING - UNEP Executive Director Klaus Toepfer opened the 23rd session of the UNEP Governing Council/Global Ministerial Environment Forum on Monday, 21 February 2005, with a minute of silence for the victims of the recent Asian Tsunami. Outgoing Governing Council President Arcado Ntagazwa (Tanzania) said the adoption of the Bali Strategic Plan was a crucial achievement that will change the way UNEP conducts its business. He said the Plan's success will depend on how it is financed, and suggested that the Plan's broad scope allows for contributions from the Environment Fund or from trust funds and counterpart contributions. UNEP Deputy Executive Director Shafqat Kakakhel delivered a message on behalf of UN Secretary-General Kofi Annan. He called on national governments to work with the private sector and civil society to sustain the momentum for sustainable development, and to protect natural resources that are fundamental in combating poverty. Anna Tibaijuka, Executive Director of UN-HABITAT, stressed the need for cooperation among various international organizations and a concrete policy commitment by governments in meeting poverty and environment challenges, especially the provision of safe drinking water and housing to people living in slums.

Zeng Peiyan, Vice-Premier of China, outlined China's commitment to environmental protection. He called for international cooperation in new areas for implementing the Millennium Development Goals (MDGs), such as building environmental infrastructure, reducing natural disasters, opening markets and removing trade barriers. Mwai Kibaki, President of Kenya, emphasized the opportunity to utilize UNEP's work programme to eradicate extreme poverty and ensure sustainability. He further urged the strengthening of UNEP's financial base, increasing States' contributions to the Environment Fund, and consolidating UNEP's scientific base. Delegates then elected Rachmat Witoelar, Indonesia's Minister of Environment, as President of the Governing Council. They also elected Laurent Sedogo (Burkina Faso), Sulfina Barbu (Romania), and Beat Nobs (Switzerland) as Vice-Presidents, and Donald Cooper (Bahamas) as Rapporteur. Delegates adopted the provisional agenda and organization of work for the session (UNEP/GC/23/1 and Add.1). The credentials of delegations were presented and approved on Friday, 25 February, during the closing plenary.

THE EXECUTIVE DIRECTOR'S POLICY STATEMENT: Recalling that 2005 is the 60th anniversary of the UN, Toepfer stated that this is a year of responsibility and accountability. He emphasized that the GC-23/GMEF had the opportunity and the responsibility to substantially contribute to the work of the Beijing +10 review, the Commission for Sustainable Development, and the General Assembly High-Level Plenary Meeting on the review of the Millennium Declaration. He urged delegates to focus on, inter alia: an ecosystem approach to Integrated Water Resources Management (IWRM), technology transfer, capacity building, sustainable consumption and production patterns, chemicals, including mercury, the Bali Strategic Plan, strengthening UNEP's scientific base, and early warning systems. He also stressed that in their work, delegates should take into account the work of non-governmental organizations (NGOs) and the private sector.

MINISTERIAL CONSULTATIONS - Ministerial consultations, which took place from Monday to Wednesday, considered the implementation of the internationally agreed development goals, including those in the Millennium Declaration. The three sessions of the ministerial consultations focused on poverty and the environment, environmental sustainability, and gender and the environment. On Wednesday, 23 February, the UK's Minister for Environment and Agri-Environment, Elliot Morley, introduced the draft President's Summary. During the discussion, delegates proposed various amendments to the Summary. On Friday, 25 February, GC Vice-President Sedogo introduced the revised President's Summary, which was adopted with minor ammendments. Sedogo said the Summary would be submitted to CSD-13 and the high level plenary meeting of the General Assembly on the implementation of the Millennium Declaration.

The Earth Negotiations Bulletin's coverage of the ministerial consultations is available online at:
http://www.iisd.ca/vol16/enb1643e.html and http://www.iisd.ca/vol16/enb1644e.html.

President's Summary: The President's Summary (UNEP/GC.23/L.3/Rev.1) is divided into four parts, an introduction and three substantive sections on: environment and poverty (MDG Goal 1); environmental sustainability in relation to water, sanitation and human settlements (MDG Goal 7); and gender and environment (MDG Goal 3). Each section contains an overview of the issues involved in the goal, and recommendations for countries, the international community and UNEP.

Environment and poverty: The President's Summary contains recommendations for countries and the international community to implement MDG Goal 1, including: - providing economic rationale for investments in environmental sustainability; - financing and implementing the Bali Strategic Plan; - canceling or alleviating debt for Least Developed Countries and Highly Indebted Poor Countries; - employing innovative financial mechanisms; - expediting the implementation of the Johannesburg Plan of Implementation (JPOI) and other related development goals, including those contained in the Mauritius Strategy; - removing trade and aid measures in a mutually supportive manner; and
- strengthening the scientific and financial base of UNEP.

Regarding UNEP, the Summary recommends, inter alia: implementing the UNEP and UNDP Memorandum of Understanding; and enhancing cooperation with international financial institutions and specialized agencies and programmes within the UN.
Environmental sustainability: The President's Summary contains recommendations for countries and the international community to implement MDG Goal 7, including: - achieving environmentally sustainable water use and applying IWRM, including ecosystems approaches;
- quantifying costs of environmentally unsustainable water use; - employing smaller scale and environmentally sustainable infrastructure;
- promoting land-use planning policies to reduce vulnerability of slum-dwellers; - increasing financial resources; and - improving water institutional mechanisms and governance.

Regarding UNEP, the Summary recommends, inter alia: - increasing support for the implementation of the JPOI target of integrated water resources management and efficiency plans by 2005; - monitoring the implementation of the Convention on Biological Diversity (CBD) and marine and freshwater biodiversity targets of the JPOI by the UNEP World Conservation Monitoring Centre (WCMC), as mandated by CBD;
- providing support for establishing regional water ministerial bodies; - ensuring, together with UNDP and the UN Development Group, that environmentally sustainable water use is integrated into poverty reduction strategies and national development plans; and -increasing its presence in international fora to underline environmental sustainability in meeting, inter alia, water targets.

Gender and environment: The President's Summary contains recommendations for countries and the international community to implement MDG Goal 3, including: - mainstreaming gender equality at all levels in strategies, policies and programmes; - empowering women and girls through education and capacity building; - including gender equality and environment in school curricula for both men and women; - removing barriers for women and girls to access leadership roles, economic activities and land tenure; - focusing on international commitments that particularly affect women such as chemicals, heavy metals, water, sanitation and human settlements; and - strengthening or establishing mechanisms to assess the impact of development and environmental policies on women. Regarding UNEP, the Summary recommends, inter alia: increasing its role in areas of education, participation and assessment, in collaboration with UNESCO, UNICEF, UNDAW, other UN agencies and national governments.

PLENARY - ACTIVITIES OF UNEP RELATED TO THE TSUNAMI DISASTER: This issue was discussed in the plenary on Wednesday, 23 February. Klaus Toepfer highlighted UNEP's activities in response to the disaster, including UNEP's environmental impact assessments in seven countries (UNEP/GC.23/INF/29). Pasi Rinne, UNEP, introduced the activities of UNEP's Tsunami Task Force, and emphasized the importance of developing a system for early-warning and environmental assessment. Surendra Shrestha, UNEP's Regional Director for Asia and the Pacific, presented the findings of UNEP's report "After the Tsunami - Rapid Environmental Assessment," highlighting: damage to coastal ecosystems; water and soil contamination; hazardous wastes; infrastructure damage; impact on livelihoods; and indigenous knowledge. Representatives from the disaster-affected countries, including Sri Lanka, Maldives, Thailand, India and Indonesia, made presentations on the damage and loss to property and human lives. Praising UNEP for its immediate action and support, they appealed for the establishment of an early warning system and the mobilization of international efforts for rehabilitation. In the discussion that followed, many delegations expressed their sympathy and committed their support to the affected countries. Toepfer pledged to cooperate closely with the Office for the Coordination of Humanitarian Affairs and other UN agencies in establishing an early warning system and emergency prevention, preparedness and response.

THE BALI STRATEGIC PLAN: On Thursday, 24 February, the plenary considered the Bali Strategic Plan (UNEP/GC.23/6/Add.1). Adnan Amin, UNEP, presented the background and the process leading to the development of the Bali Strategic Plan. Many delegates indicated their support for the Plan and emphasized the importance of its implementation. The discussions focused mainly on implementation mechanisms and funding, which were stressed by Indonesia, Mauritius, Kenya, Tuvalu, and Antigua and Barbuda. Several delegates also requested amendments to the Plan. Mauritius underscored the importance of strengthening UNEP's regional offices and Tuvalu recommended that UNEP establish a subregional office in the Pacific to facilitate SIDS' implementation of environmental activities and access to financial assistance. Mauritius underscored the importance of country-driven implementation activities.

CHEMICALS: On Thursday, 24 February, the plenary considered issues of chemicals, focusing on the Strategic Approach to International Chemicals Management (SAICM). SAICM Preparatory Committee President Viveka Bohn presented an overview of the SAICM process. Discussions focused on regional issues, financial mechanisms, funding, collaboration and partnerships, and the dumping of chemicals in developing countries. Indonesia and Senegal highlighted, inter alia, the importance of a regional focus in the SAICM process. The EU specified that they would actively work for the adoption of the SAICM in 2006.

INPUT TO THE THIRTEENTH SESSION OF THE COMMISSION ON SUSTAINABLE DEVELOPMENT: This issue was discussed in plenary on Thursday, 24 February. John Ashe, Chair of CSD-13, expressed satisfaction with the outcome and recommendations made during the ministerial consultations. He highlighted the importance of: addressing poverty and human development; mobilizing financial resources, both public and private; involving local-level stakeholders; accelerating IWRM; and enhancing the role of women. Verle Vandeweerd, UNEP, said that the ecosystem approach, IWRM and poverty reduction are three important elements in water management. Halifa Drammeh, UNEP, emphasized the need to improve interagency cooperation. The Gambia, Bangladesh and Sudan stressed the importance of IWRM, sanitation and the implementation of the Bali Strategic Plan. The US outlined its expectations for CSD-13, noting the need to, inter alia, develop revolving funds, prepare water safety and watershed management plans, and implement IWRM.

COMMITTEE OF THE WHOLE - On Monday, 21 February, COW Chair Beat Nobs (Switzerland) opened the session and presented the organization of work, which was approved by the Committee. A drafting group under the chairmanship of Paul Zom Lolo (Nigeria) met throughout the week to consider draft decisions on UNEP''s revised water policy and strategy and on international environmental governance. Contact groups on the programme and budget, chaired by Frederic Renard (Belgium), and on chemicals management, chaired by Viveka Bohn (Sweden), also met throughout the week. Cuba, on behalf of the G-77/China, and the EU made general statements on the following issues: global cooperation in addressing poverty, in particular for the provision of financial resources and technology transfer; effective and immediate implementation of the Bali Strategic Plan; strengthening environmental emergency responses and the development of early warning systems; chemicals management; IEG; and implementation of IWRM.

Guy Canivet, President of France's Court of Appeals, presented the outcome of the roundtable dialogue on advancing the MDGs through the rule of law, held in Nairobi on 16-17 February 2005 (UNEP/GC.23/CRP.2). Kakakhel introduced a document containing the ten draft decisions prepared by the Committee of Permanent Representatives (CPR), noting that they would be dealt with by the drafting group and contact groups (UNEP/GC.23/L.1). On Wednesday, 23 February, the COW addressed Cooperation and coordination within the UN system on environmental matters and heard statements from the secretariats of multilateral environmental agreements (MEAs). The Earth Negotiations Bulletin's coverage of these discussions is available online at: http://www.iisd.ca/vol16/enb1645e.html

GC-23/GMEF DECISIONS - Small island developing States (SIDS): The draft decision was considered in the COW on Tuesday, 22 February. The COW agreed to forward the decision to the plenary for adoption. The plenary adopted the decision on Friday, 25 February. Final Decision: In the decision (UNEP/GC.23/CW/L.2), the GC/GMEF notes with satisfaction the outcomes of the Mauritius International Meeting, and requests the Executive Director to ensure that UNEP's activities in relation to SIDS contribute to the implementation of the outcomes of the Mauritius International Meeting. The GC/GMEF also decides to request the Executive Director to continue strengthening the activities of UNEP related to SIDS on a tailored and regional basis.

- Chemicals management: This issue was introduced in the COW on Monday, 21 February, when the Secretariat presented an omnibus decision submitted by the CPR with operative sections on: cooperation between UNEP, relevant MEAs and other organizations; the SAICM; lead in gasoline; and mercury. The draft decision was addressed in the COW on Tuesday, and in a contact group chaired by Viveka Bohn, which met the rest of the week. On Friday morning, 25 February, the COW agreed to forward the draft decision to the plenary for adoption. The plenary adopted the decision, without amendment.

In the COW, the discussion focused primarily on the mercury section of the draft decision on chemicals management. The US, Australia and Japan expressed reservations to a legally-binding instrument on mercury and, with Canada, called for a partnership approach to achieve further results. Canada said the possibility of negotiating a legally-binding instrument should not be precluded. The Russian Federation and the G-77/China said the first priority should be to finalize the SAICM, while Norway and Switzerland said further action by UNEP would contribute to the SAICM and, supported by Iceland, emphasized a legally-binding instrument on mercury and other heavy metals as the best long-term solution. The EU also expressed support for a legally-binding instrument. In the contact group, delegates deliberated on the draft decision and considered new proposals on mercury presented by: the US; Norway, Switzerland and the EU; and Canada. While the partnership approach received general support, the EU said it must remain a complementary strategy and, with Switzerland and Norway, called for a legally-binding instrument on mercury.

Noting that for many countries the partnerships resulting from the World Summit on Sustainable Development (WSSD) have not delivered positive results, developing countries expressed support for the idea of mercury partnerships insofar as monitoring, transparency, and accountability are ensured. After long deliberations, delegates agreed to a draft decision, which they forwarded to the COW on Friday morning, where it was approved without amendment. Noting they were disproportionately affected by mercury contamination, Indigenous Peoples urged UNEP to support further long-term international action on mercury, including a legally-binding instrument, and questioned the US commitment toward addressing the detrimental effects of mercury contamination at the national level, as well as internationally. During the plenary on Friday, the US pledged more than US$1 million to support the mercury programme and the partnerships approach contained in the draft decision, and urged interested parties to commit their resources, expertise and time to ensure that tangible progress is made as quickly as possible.

Final Decision: The decision (UNEP/GC.23/CW/L.4) contains four operative paragraphs on: cooperation between UNEP, relevant MEAs and other organizations; the SAICM; lead and cadmium; and the mercury programme. In the section on MEAs, the GC/GMEF requests UNEP Executive Director, among others, to further promote cooperation with the Basel Convention Regional Centres in the implementation of other chemical-related MEAs and institutions, and to report on implementation of the decision to GC-24/GMEF. On the SAICM, the GC/GMEF requests the Executive Director to, inter alia, provide funding to support the further development of SAICM, and to report to GCSS-9/GMEF on the outcomes of the SAICM process for its endorsement by UNEP. On lead and cadmium, the GC/GMEF requests the Executive Director to undertake a review of scientific information focusing on long-range environmental transport to inform future discussions on the need for global action on lead and cadmium.

On mercury, the GC/GMEF, inter alia: - requests the UNEP Executive Director to further develop UNEP's mercury programme by initiating, preparing and disseminating a report summarizing supply, trade and demand information on mercury; - requests governments, the private sector and international organizations to take immediate actions to reduce the risks posed on a global scale by mercury in products and production processes; - urges governments, intergovernmental organizations, NGOs and the private sector to develop and implement partnerships in a clear, transparent and accountable manner, as one approach to reducing the risks to human health and the environment from the release of mercury and its compounds; - requests the UNEP Executive Director to present a report on progress in the implementation of the decision as it relates to mercury to GC-24/GMEF; and - decides to assess the need for further action on mercury, including the possibility of a legally-binding instrument, partnerships, and other actions at GC-24/GMEF.

UNEP's water policy and strategy: This draft decision, originally drafted by the CPR, was introduced by the Secretariat in the COW on Monday, 21 February. The draft decision was referred to the drafting group, where it underwent several readings from Tuesday through the early morning hours on Friday. The decision was adopted in the plenary on Friday. In the COW discussions, delegates asked for clarifications and made comments on the substance of the updated water policy, its financial and technical implications, and the need for the proposed advisory board for water-related issues, given the existence of a similar body established by the UN Secretary-General.

The drafting group addressed a number of contentious issues: including preambular language on the 2015 target of access to safe drinking water and basic sanitation. Brazil, on behalf of the Latin America and Caribbean Group, suggested new preambular text referring to Principle 2 of the Rio Declaration. The EU suggested including Principles 3 and 4, Canada proposed Principles 10 and 11, and Egypt suggested adding Principle 7. Some delegations noted that this enumeration diluted the original purpose of the Brazilian proposal, but the long discussion on the merits of various principles resulted in the inclusion of all of them. The other problem concerned the status of UNEP's updated water policy and strategy, with Egypt, Brazil and several others pointing to difficulties in different parts of the document. Consequently, they suggested to "take note" of the strategy, rather than to "adopt" it.

The timetable for the strategy's review and/or revision was discussed, with Australia suggesting an early date for its circulation, and Egypt preferring a later one. The incorporation of the ecosystem approach into integrated water resource management was also debated, with Switzerland, Mexico and the EU insisting on its inclusion, and Egypt and Nigeria arguing against it. In this connection, Egypt proposed that the IWRM be tailored to countries' specific circumstances. The US suggested deletion of references to "environmental sustainability," and the Russian Federation, supported by the US and Nigeria, suggested deleting a reference to the work done by the UN Secretary-General's Advisory Board on Water and Sanitation. The G-77/China called for UNEP to develop a comprehensive framework on sanitation. The drafting group also debated the way of referencing upcoming meetings, including CSD-13, and access to water by the poor.

Final Decision: In the decision (UNEP/GC.23/L.5), the GC/GMEF adopts UNEP's updated policy and strategy as a general framework/guidance for its activities in the field of water and sanitation, and notes governments' reservations on substantive and procedural issues in developing the strategy. The GC/GMEF recommends that the Executive Director, in his review of the water policy, take into account several concepts (including ecosystem approaches to IWRM, and others) and ensure that it contributes to the achievement of internationally agreed goals contained in the Millennium Declaration and the JPOI. The GC/GMEF also welcomes the offer by China to host the second Intergovernmental Review Meeting of the Global Programme of Action for the Protection of the Marine Environment from Land-based Activities (GPA) in 2006.

International environmental governance: This omnibus draft decision prepared by the CPR was introduced by the Secretariat in the COW on Tuesday, 22 February. The draft decision was subsequently addressed in the drafting group from Tuesday, 22 February, until the last session, which terminated early in the morning on Friday, 25 February. The decision was approved by the plenary on Friday, without amendment, with the US stating that it would not participate in the implementation of the voluntary indicative scale of contributions. In the COW, a number of delegations offered views on different sections of the decision, focusing on the need to implement the Bali Strategic Plan and strengthen UNEP's financial base. In the drafting group, difficulties arose in the draft decision's preambular section, which embraces all components of IEG and refers to the "need for a strengthened institutional structure for IEG" and to the "ongoing consideration of UNEP's governing structure." The G-77/China and several other countries suggested deleting the preambular section and the references, the Russian Federation objected to qualifying the ongoing consideration of the issues mentioned, and the US proposed referring exclusively to "the important but complex issue of universal membership." The G-77/China proposed deleting a reference to "good governance" in the context of capacity building, while Canada suggested alternative language in a separate paragraph on good governance that would embrace international governance. A prolonged discussion on the subject resulted in dropping references to good governance.

Discussion on the draft decision's section on the Bali Strategic Plan centered on financial resources for the Plan's implementation. The issue of strengthening the scientific base of UNEP focused on the proposed Environmental Watch, which aimed to, inter alia, promote interaction between science and policy-making for addressing gaps and needs and setting priorities for processes related to keeping under review the world environmental situation. Most countries expressed preference for a process where the Executive Director would take into account governments' views on the proposed Environmental Watch framework, with the G-77/China and some others questioning the initiative. On the issue of universal membership, countries' positions remained entrenched, with the US, the Russian Federation and Japan objecting to the notion, and the EU arguing in favor. On strengthening UNEP's financial base, opposing views were expressed on whether the voluntary indicative scale of contributions to the Environment Fund should be extended or dropped altogether. The discussion on MEAs emphasized the independent decision-making authority of MEAs.

Final Decision: The decision (UNEP/GC.23/L.5/Add.1) contains six sections on the Bali Strategic Plan, strengthening the scientific base of UNEP, universal membership of the GC, strengthening UNEP's financial base, MEAs, and enhancing coordination across the UN system and the Environmental Management Group (EMG). On the Bali Strategic Plan, the GC/GMEF requests the Executive Director to give high priority to its immediate implementation, and to work out a resource mobilization strategy, and invites governments in a position to do so to provide necessary additional resources. On strengthening the scientific base of UNEP, the GC/GMEF recognizes the need to strengthen UNEP's scientific base, as recommended by intergovernmental consultations, and requests the Executive Director to update his proposal for an environment watch framework and to submit it to governments for their views, to enable submission of a report to GCSS-9/GMEF. On universal membership, the GC/GMEF notes the different views expressed on this "important but complex issue," and decides to undertake its further consideration during ministerial consultations at GCSS-9/GMEF, in order to provide input to the Secretary-General's report at the 61st session of the UN General Assembly.

On strengthening UNEP's financial base, the GC/GMEF emphasizes the need for stable, adequate and predictable financial resources for UNEP, encourages governments to prefer such contributions over earmarked trust funds, and requests the Executive Director to notify member States of his proposal on the voluntary scale of contributions for 2006-2007. On MEAs, the GC/GMEF requests the Executive Director to improve coordination and synergy among and effectiveness of MEAs, taking into account their Conferences of the Parties' autonomous decision-making authority, and to support implementation by parties to those agreements. On enhancing coordination across the UN system and the EMG, the GC/GMEF acknowledges the report on the work of the EMG and the assessment of its location, and calls upon the Executive Director to initiate discussions with the EMG members and the CPR and report to GC-24/GMEF. Strengthening environmental emergency response and developing disaster prevention, preparedness, mitigation and early warning systems in the aftermath of the Indian Ocean tsunami disaster: This draft decision was tabled by the G-77/China in the COW on Monday, 21 February. Following informal consultations led by Indonesia on Thursday, 24 February, the COW agreed to forward the decision to the plenary for adoption. The plenary adopted the decision on Friday.

Final Decision: In the decision (UNEP/GC.23/CW/L.2/Add.2), the GC/GMEF requests the Executive Director to work in cooperation with the governments of the countries affected by the Indian Ocean Tsunami, in: - providing appropriate expertise for supporting emergency environmental planning and assistance; - assessing environmental impacts of the tsunami and the environmental aspects of any subsequent risks to human health and livelihoods; - promoting the integration of environmental consideration into wider mitigation, rehabilitation and reconstruction efforts; and - promoting in the reconstruction efforts, in particular, international cooperation in the use of renewable energy technologies, as appropriate.

The GC/GMEF also requests the Executive Director to continue developing, in close consultation with governments, relevant international institutions and MEA secretariats: an environmental approach to the identification and assessment of areas that are potentially at risk from natural and human-induced disasters, noting that intact mangrove and coral-reef ecosystems may help protect shorelines and islands; and guidelines outlying procedures and methodologies for environmental assessments of natural and human-induced disasters. The GC/GMEF also invites governments and relevant institutions to provide extra-budgetary resources, on a voluntary basis for technical cooperation and capacity building, within the context of the Bali Strategic Plan, for strengthening national and local-level capacity for coping with the environmental hazards and risk reduction, early warning, preparedness, response and mitigation relating to natural and human-induced disasters.

Environmental and equity considerations in the procurement practices of UNEP: This issue was considered in the COW on Wednesday, Thursday and Friday. On Friday, the COW agreed to forward the decision for adoption in the plenary. The US presented a draft decision (UNEP/GC.23/L.1) on a sustainable procurement programme for UNEP acquisitions, which proposed a UNEP sustainable procurement programme whereby environmental considerations should become a normal part of UNEP purchasing practice. Noting that a sustainable procurement programme would discriminate against products and services originating in poor countries if they failed to comply with high environmental standards, the G-77/China expressed concern at the proposal.

On Thursday, the G-77/China presented a new draft decision. The US proposed deleting three references to equity because it was unclear what equity meant in this context. The EU said it was opposed to preambular text on trade as it did not want references to trade or to the WTO in the draft decision. The G-77/China clarified that equity meant no discrimination among providers. Several delegations proposed alternative wording, and the US agreed to delete the brackets around "equity," but suggested maintaining the reference to trade, bracketed by the EU. The EU opposed retaining the paragraph on trade. The G-77/China, the EU and the US met in a small group to come up with new compromise text, and discussed: including a reference to the mutual supportiveness of trade and environment and development with a view to achieving sustainable development; deleting the reference to trade; and removing the brackets around "equity."

Final Decision: In the decision (UNEP/GC.23/CW/L.2/Add.2), the GC/GMEF invites governments to share with UNEP their experiences on environmental and equity considerations in procurement practices; and requests the Executive Director to prepare a compilation report on environmental and equity considerations regarding current procurement practices in UNEP and an assessment of its performance to present to GC-24/GMEF. Gender equality and the environment: This issue was introduced in the ministerial consultations on Tuesday and discussed in informal consultations throughout the week and in the COW on Friday. The draft decision was adopted in Friday's plenary without amendment. In the ministerial consultations, Rejoice Mabudhafasi, South Africa's Deputy Minister of Environmental Affairs and Tourism, stressed the importance of women in decision-making, called for a gender focus on climate change vulnerability and mitigation, and noted the impossibility of sustainable development without women's empowerment and gender equality.

In the discussion, a number of participants expressed support for a draft decision on gender equality and the environment submitted by Sweden, and stressed various aspects of gender equality, including: increased women's presence at all decision-making levels; women's involvement in environmental impact assessments; free market access for women; access to education for women; and promoting women's environmental rights, eliminating gender discrimination, and giving women equal decision-making power. Informal consultations, facilitated by Jacob Stroem (Sweden), were held to work on the draft decision. On Friday, Stroem explained that the decision was the result of the work of a network of women ministers from all regions. Rather than looking for new agreements on gender equality, the objective was to adopt concrete measures on how to implement the Fourth World Conference on Women's Beijing Declaration. He stressed that the decision had been delicately drafted to represent the outcomes of UNEP's first Global Women's Assembly on Environment meeting in October 2004 and their subsequent deliberations.

Final Decision: In the decision, (UNEP/GC.23/CW/CRP.3), the GC/GMEF requests the Executive Director to: develop and promote a set of gender-equality criteria for the implementation of programmes; apply UNEP's gender-sensitivity guidelines; and assist governments, subject to the availability of extra-budgetary resources, in building capacity for gender mainstreaming in the context of the Bali Strategic Plan. Poverty and the environment: This draft decision was presented by the G-77/China in the COW on Thursday. On Friday, the COW agreed to forward the decision to the plenary, which adopted it without amendment. In the COW, opposition was raised by US and the EU due to the late submission of the decision, whereas Norway, the Russian Federation and the League of Arab States expressed their support. In the final plenary, the US and the EU reiterated their discontent with the late introduction of new decision, and the UN Department of Economic and Social Affairs (DESA) raised concerns regarding work duplication since the decision covers areas within DESA's mandate and expertise.

Final Decision: In the decision (UNEP/GC.23/CRP.6), the GC/GMEF requests the Executive Director to increase activities that promote understanding of the linkages between poverty and the environment, and to assist governments in integrating environmental decision making into social and economic policy on poverty eradication within UNEP's mandate. Keeping the world environment situation under review: This draft decision was discussed in the COW on Wednesday. Following ammendments by delegations, the COW agreed to forward the decision to the plenary, which adopted it on Friday. In the COW discussions, delegates agreed to delete preambular paragraphs on the Global Earth Observation System of Systems (GEOSS), and to an amendment on the operative paragraph welcoming the Executive Director's report on activities and plans for supporting the 10-year implementation plan of the GEOSS. Following amendments by the US, delegates agreed to two new paragraphs tabled by the G-77/China, which address the process for developing the fourth Global Environment Outlook (GEO) report. Following informal consultations led by Canada, delegates agreed to the paragraph dealing with climate change. They also approved a new paragraph proposed by the US to reference the work of regional and global organizations.

Final Decision: In the decision (UNEP/GC.23/L.2/Add.1), the GC/GMEF decides that the feature focus of the GEO 2005-2006 yearbook should be on energy and air pollution. The GC/GMEF requests the Executive Director to keep under review: human health aspects of environmental change in cooperation with the scientific community and other international organizations; emerging scientific evidence relating to climate change, and to report on new developments; and to establish a process of developing GEO-4 as an integrated assessment of the global environment. The GC/GMEF also calls on governments to: promote cooperation between health and environmental authorities to control emerging and re-emerging infectious diseases, and provide extra-budgetary resources for technical cooperation and capacity building within the Bali Strategic Plan and the proposed environment watch framework. Provisional agendas and dates and venues for GCSS-9/GMEF and GC-24/GMEF: This draft decision was discussed in the COW on Wednesday.

The COW agreed to forward the decision to the plenary for adoption, pending the agreement of the venue for GCSS-9/GMEF. The plenary adopted the decision on Friday. Shafqat Kakakhel, UNEP, introduced the draft decision, which contains the draft agenda for GCSS-9/GMEF and GC-24/GMEF. He said the agenda for GCSS-9/GMEF had been designed specifically to enable governments to discuss energy issues in preparation for CSD-14, as well as chemicals management following the last SAICM PrepCom. Following minor amendments by the EU and Canada to the GCSS-9/GMEF agenda and by UNEP to the GC-24/GMEF agenda, the COW agreed to forward the draft decision to the plenary, pending the decision on the venue for GCSS-9/GMEF. In the plenary on Thursday, 24 February, the United Arab Emirates offered to host GCSS-9/GMEF, which was agreed to by acclamation.

Final Decision: In the decision, (GC23/CW/L2/Add 3), the GC/GMEF decides to hold GCSS-9/GMEF in Dubai, the United Arab Emirates, from 7-9 February 2006, and approves the provisional agenda with energy and environment and chemicals management as the major agenda items. The Council also decided to hold GC-24/GMEF in Nairobi from 5-9 February 2007, and approved the provisional agenda.

Budget and the Programme of Work for the Biennium 2006-2007: This agenda item and its draft decision were considered in the COW on Monday and throughout the week in a contact group chaired by Frederic Renard (Belgium). The decision was adopted in plenary on Friday, where the US stated that it does not intend to increase contributions to fund any new UNEP positions. In the COW, Shafqat Kakakhel, UNEP, presented the Environment Fund Budgets: Proposed Biennial Programme and Support Budget for 2006-2007 (UNEP/GC.23/8). Delegates then made preliminary remarks. In the contact group, discussion focused on bracketed text in the draft decision, including: the Executive Director's authority to reallocate resources; an increase of the share of the UN regular budget allocated to the United Nations Office in Nairobi (UNON) and UNEP; and the budget for the implementation of the Bali Plan.

On the Bali Strategic Plan, delegates agreed to a revised text requesting the Executive Director to present a report on the implementation of the Plan to GCSS-9/GMEF in 2006 and that the report should include implications of the Plan for the UNEP Programme of Work and Budget. On the issue of the voluntary indicative scale of contributions, the US, the Russian Federation and Japan opposed a proposal on wider application of the scale, while many others supported it. The US suggested text urging governments to further support strengthening the Environment Fund through the mechanism envisaged in GCSS-7/GMEF decisions. Following informal consultations, delegates accepted the revised text that urges governments to support further strengthening of the Environment Fund through the options envisaged in GCSS/VII/1 on IEG, including the voluntary indicative scale of contributions.

Regarding the Executive Director's authority to reallocate resources, Switzerland proposed a compromised 10% reallocation authority without having to consult with the CPR. The US later presented new text requesting the Executive Director to consult with the CPR if he needs to reallocate funds in excess of 10%. The EU proposed text maintaining the 20% authority in the present form and requesting the CPR to consider the issue and make recommendations to the next GC regular session. On the increase in the share of the UN regular budget allocated to UNON and UNEP, the US suggested new text calling for the allocation of an appropriate share of the UN regular budget allocated to UNEP. The contact group considered new text on an increase of the UN regular budget to UNEP proposed by the US, which calls for an allocation of an appropriate share of the UN regular budget allocated to UNEP. It also refers to General Assembly resolution 2997, and underlines the need to consider the adequate reflection of the administrative and management costs of the Environment Programme within the context of the UN regular budget. Delegates approved this text with several amendments. Delegates also agreed to a new US proposal on the Executive Director's authority to reallocate resources, to a maximum of 10%, and to consult with the CPR if he needs to reallocate resources in excess of 10% and up to 20%.

Final Decision: In the decision (UNEP/GC.23/L.6), the GC/GMEF approves appropriations for the Environment Fund in the amount of US$144 million for the biennial programme, which includes: environmental assessment and early warning; environmental policy development and law; environmental policy implementation; technology, industry and economics; regional cooperation and representation; environmental conventions; and communications and public information. The GC/GMEF also requests governments to support the further strengthening of the Environment Fund through the options envisaged in GCSS/VII/1on IEG, including the voluntary indicative scale of contributions. It authorizes the Executive Director to reallocate resources between budget lines up to a maximum of 10% of the appropriations to which the resources are reallocated, and requests him to consult with the CPR if he needs to reallocate resources in excess of 10% and up to 20%. The GC/GMEF requests the Executive Director to continue the shift in emphasis from delivery of outputs to achievements of results, and calls for an allocation of an appropriate share of the UN regular budget to UNEP. The GC/GMEF further requests the Executive Director to give high priority to the effective and immediate implementation of the Bali Strategic Plan and to undertake the work set out in his proposed road-maps for the Plan and present a report on the implementation to GCSS-9/GMEF.

Administrative and other budgetary matters: This draft decision was discussed in the contact group chaired by Frederic Renard (Belgium). On Friday morning, the COW approved the draft decision and sent it to the final plenary for adoption. On Friday afternoon, the final plenary adopted the decision without amendment. The contact group considered the sub-programme on environmental conventions. Delegates debated but could not agree on whether a paragraph on pilot demonstration projects on implementation of equitable access and benefit-sharing arrangements in relation to several conventions, particularly the CBD and CITES, should be retained or deleted. Delegates agreed to add new text to the draft decision, which requests the Executive Director to improve financial information flows between UNEP, UNON and convention secretariats. Regarding case studies on implementation of equitable access and benefit-sharing arrangements in relation to several conventions, delegates agreed to delete the word "equitable" before "access and benefit-sharing."

Final Decision: In the decision (UNEP/GC.23/CW/L.3), the GC/GMEF approves the proposed action of the Executive Director to reduce the number of trust funds, and extends the duration of a number of trust funds for various programme activities. The GC/GMEF further requests the Executive Director to report to the CPR on further progress on loan draw-downs and the status of the construction project, and to improve financial information flows between UNEP and MEA secretariats.

CLOSING PLENARY - During the closing plenary on Friday afternoon, 25 February, Vice-President Laurent Sedogo introduced the draft proceedings of the Governing Council/Global Environmental Ministerial Forum at its twenty-third session (UNEP/GC.23/L.2 and Add.1), which were adopted with minor amendments. Vice President Sedogo then invited regional groups to make closing remarks. Mexico, on behalf of the Latin America and Caribbean Group, emphasized that the Group attaches great importance to the Bali Strategic Plan that will come into effect this year, and commended everyone for the various decisions adopted, including those on water and chemicals. Sweden, on behalf of the Western European and Others Group, said they were pleased to work with all the delegations and underscored that this Governing Council meeting had been an exceptionally good one.

Saudi Arabia, for the Asian Group, hoped that the adoption of the Bali Strategic Plan would ensure an "environmental upgrade" of their region. Cuba, on behalf of the G-77/China, commended the exceptionally high-level of collaboration and cooperation among delegations, which ensured the success of this Governing Council meeting. He urged all delegations to speedily and immediately implement the Bali Strategic Plan. The UK, on behalf of the EU, acceding countries and Iceland, emphasized that the EU was satisfied with the decisions adopted, including the Bali Strategic Plan and those related to chemicals, gender equality, poverty and the environment, and water. He welcomed the GC/GMEF's input to CSD-13 and the General Assembly High-Level Plenary Meeting. He also expressed than to all those who had contributed to the meeting's success, including the Earth Negotiations Bulletin.

UNEP Executive Director Klaus Toepfer said this was the most important GC/GMEF meeting in UNEP's history, and expressed UNEP's commitment to promote the integration of the environment into every component of the development agenda. Noting that this is a crucial year for the UN system, on the way to a major reform, he emphasized the need for the UN to prove its ability to deal with current world challenges. Noting that the decisions adopted represent an important guideline to achieve that objective, he urged all member States and the CPR to make this a success story. Citing Kenya's problems as an example of drinking water scarcity, lack of sanitation, and land degradation and its relation with poverty, Professor Wangari Maathai, 2004 Nobel Peace Prize laureate, called on delegates to consider how to promote the MDGs and sustainable development in Africa. She expressed hope that the Bali Strategic Plan would empower people in developing countries to utilize technology and resources for their own people. She said that, although we have come a long way from the 1972 Stockholm Conference, much remains to be done. However, she asked delegates: not to be discouraged by the immensity of the task ahead; to apply the four "Rs," reduce, reuse, recycle, and repair; and to focus as individuals on the actions that can be done to protect the environment. On behalf of the GC/GMEF President, Vice-President Sedogo expressed satisfaction at the result of the meeting in charting UNEP's future course to realizing the MDGs, and said the session could be considered a landmark in the story of UNEP. Emphasizing the Bali Strategic Plan as a "leap into the future," he called on governments to provide financial resources to support the plan within their capacities.

A BRIEF ANALYSIS OF GC-23/GMEF - As delegates left the UN complex in Gigiri on Friday evening, they collectively breathed a sigh of relief. Not only had they survived a complex, often chaotic, week-long meeting, with a lengthy agenda, a staggering number of events, and an immense volume of documentation, but they also managed to accomplish most of the objectives of GC-23/GMEF. In a meeting devoid of grandstanding and politicking, eased along by seasoned chairpersons and facilitators, delegates succeeded in approving a comprehensive work programme and a hefty spending programme, which rivaled the record set in Mostafa Tolba's time. This is expected to generate new momentum for UNEP to exercise its mandate in a more effective fashion. This analysis looks at the main outcomes of GC-23/GMEF focusing on the Bali Strategic Plan, UNEP's revised water policy and strategy, international environmental governance, and the value of the GMEF.

STRATEGIC ACHIEVEMENT - Expectedly, the formal adoption of the Bali Strategic Plan on Technology Support and Capacity Building was the high point of the session, and for some its main practical outcome. One of UNEP's major undertakings in recent years, the Bali Strategic Plan captured the attention of developing country delegates, especially in Africa, where capacity building is the cornerstone of New Partnership for Africa's Development. While the Bali Strategic Plan's ambitious scope was universally commended, sober voices warned that it is still a skeleton in need of fat and muscle. The Plan has vast potential, and its implications are regarded by all as crucial. However, it is the financing of the Plan that will prove its success or undoing and, therefore, calls were issued for the Executive Director to put together a resource mobilization strategy as soon as possible, before the initiative loses momentum.

WATER - The adoption of UNEP's updated water policy and strategy was another major outcome of the meeting. Nevertheless, several countries expressed their concerns on the status and content of the strategy. The ecosystem approach and the costing of water resources, promoted by Switzerland, did not receive the unreserved approval some hoped for, whether because of the potentially huge financial implications for downstream countries, or suspicions of conditionality feared by several developing countries, or because of political frictions in border areas, where water is a life and death strategic resource. Despite these problems, the strategy received a well deserved boost. The perseverance of the G-77/China ensured that a new dimension has been added to UNEP's water portfolio: sanitation, a pressing problem for the world's urban and rural poor. The strategy will be continuously updated, with the next circulation planned for 2006. There will be more government involvement and, consequently, ownership of a major UNEP activity, which is an appropriate contribution to the upcoming first policy session of the Commission on Sustainable Development's new multi-year programme of work.

CHEMICALS - The GC/GMEF could not reach agreement on the need for an international legally-binding instrument on mercury. While accepting the gravity of the problem, countries have different conceptions of how to reach that goal. Switzerland and Norway's call for a binding instrument, which was supported by the EU, was opposed by the US, Australia and Japan, which prefer voluntary mercury partnerships. A good number of delegates thought this view reflected a "philosophical" stance toward international obligations, to ensure a less restricted playing field for business. The G-77/China also opposed negotiating a binding agreement at the present time, considering that the SAICM process has not yet been finalized and that many developing countries have little understanding of the mercury problem, or the capacity to address it. They remain skeptical of the ability of partnerships to deliver, given the poor record of the partnerships established during the WSSD process. Some delegates found it ironic that, despite the recognition of mercury as a genuinely global problem asking for a global solution, the GC went for a bilateral/regional case-by-case approach, as suggested by the US. Nevertheless, the problem was sufficiently highlighted to ensure a progress report from the Executive Director to consider the possibility of a binding instrument at GC-24/GMEF. In the meantime, given the hype over partnerships in the international environmental field, the report will be interesting in determining the extent to which the transparency, efficiency and accountability of partnerships could be ensured.

INTERNATIONAL ENVIRONMENTAL GOVERNANCE - The discussion on the perennial issue of international environmental governance, which comprises a set of structural initiatives dating from the GC/GMEF special session in Cartagena in 2000, encountered the same old underwater reefs. Serious divisions and well-entrenched positions persist, including the US/EU tectonic fissures. The EU insisted on transforming the 58-member UNEP Governing Council to a universal body, but the US, Russia, Japan and some members of the G-77/China were clearly not prepared to go beyond acknowledging, for the umpteenth time, that universal membership was "an important but complex issue." As arguments for and against the proposition were dealt with across the negotiating table, the GC/GMEF failed to progress one inch. According to some delegates, the EU's suggestion to establish, for the sake of "efficiency," an executive committee in a future universal GC has compounded the problem. A wizened delegate recalled the sad story of the EU-sponsored 36-member "High-level Committee of Ministers and Officials" of the late 1990s, which died of natural causes soon after being established, and hardly ever mourned.

Although the idea of transforming UNEP into a UN agency did not figure in discussions in Nairobi, its unseen presence hovered in the corridors. The proponents of the idea must have derived some satisfaction from what they see as "salami tactics," inexorably slicing off paper-thin pieces of resistance, both on universal membership and the voluntary indicative scale of contributions. Rather than being driven off the agenda, the latter was given a new lease on life in the next biennium. While there was general agreement that the scientific base of UNEP needs strengthening, delegates diverged on ways of achieving this goal. In this context, the idea of the "Environment Watch," strongly promoted by UNEP, received a mixed reception. Although the concept generated interest, a number of countries had qualms about an all-embracing process, or even less, a structure, to govern assessment and monitoring. The fate of the "assessment super panel," first proposed by Norway during the IEG process and a contentious issue during GC-22/GMEF, was apparently fresh in their memory. In the end, delegates agreed to tread a cautious path, which would commence with gathering views of governments before taking definite action.

GMEF: THE HOME OF THE ENVIRONMENT PILLAR - There were always mixed feelings about the added value of the Global Ministerial Environment Forum (essentially the ministerial portion of the Governing Council session), and questions were asked on whether it was running out of steam. The majority view at this session was that the Forum has proved to be a useful place for high-level exchanges, although some felt that there is space for improvement, such as providing a chance to talk informally in a more relaxed setting. The GC President's summary of ministerial discussions centered on a crucial issue: the environmental underpinning of the Millennium Development Goals of poverty eradication, environmental sustainability in water, sanitation and human settlements, and gender equality. By thoroughly discussing these critical areas and producing a set of sensible recommendations to governments and to UNEP, the GMEF has spelled out the critical environmental link to the central challenge of achieving the goals of Millennium Declaration and the WSSD. In light of the upcoming meeting of the Commission on Sustainable Development and the UN General Assembly High-Level Plenary Meeting on the implementation of the Millennium Declaration, the environment ministers' discussions in Nairobi may not only help operationalize the link between UNEP and the MDGs, but, in the words of COW Chair Beat Nobs, provide a vehicle to address the environmental pillar of sustainable development. This link will be even more reinforced if the ministers come to CSD in April and to the UN General Assembly in September.

The summary, as some were quick to point out, was not a negotiated output, and it added to the growing number of documents which, in a legal sense, are not owned by governments. True, the number of such "soft law" statements, communiques and strategies is growing in the UNEP framework, but they acquire authority through the power of their substance and political message.

FORWARD TO DUBAI - With the next special session of the GC/GMEF scheduled for early 2006 in Dubai, UNEP has a clear mandate to advance the global environment debate, by exhibiting its ability to meet GC-23/GMEF's action-oriented elements and unleashing its hidden strength as the home of environment in the UN system. As Canada noted, multilateralism is crucial for IEG, and GC-23/GMEF has reinforced the role of the environment in multilateral efforts, as witnessed in the session's responses to the Indian Ocean Tsunami and its recognition of the need for UNEP to react to human-induced disasters. In addition, Executive Director Klaus Toepfer made an intriguing remark in the final plenary that UNEP will have to engage in in-house reform. Some delegates understood this as an attempt to address a new and ambitious UNEP agenda, larger than at any moment in its history, a reflection of UNEP's current trend of gradually moving into implementation. Toepfer also mentioned the Nairobi-based Committee of Permanent Representatives, a body that maintains daily personal links with the Secretariat, monitors its performance and drafts decisions for the Governing Council. Some countries do hope for the CPR's stronger involvement, in particular at GC sessions, if this body is to be a success. A delegate mused that UNEP's future performance might benefit from applying, albeit sensibly, the maxim cited at the session's final plenary by Nobel Laureate Wangari Mathai: Reduce, Reuse, Recycle, and Repair.

From Earth Negotiations Bulletin, Canada, 28 February 2005

Corruption Threatens Funding

Nairobi - Government corruption in Kenya is threatening the disbursement of millions of dollars in foreign aid to fight HIV/Aids, the United States ambassador to the East African nation said in comments released on Wednesday. The envoy, William Bellamy, said graft was a primary reason that only a fraction of the $70m the United States allocated for anti-Aids programmes in Kenya last year had been spent and that other donors were equally weary of contributing until the problem was fixed. The government of Kenya must change how it spends the money it already has and it must insist on obtaining results from that spending," Bellamy said in a speech on Tuesday to mark the opening of an infectious disease centre here. He said millions of dollars in World Bank funds and tens of millions of dollars from the UN's Global Aids Fund are currently available for anti-Aids efforts in Kenya but remain unspent due to donor concerns.

Unusually blunt - "Let's be clear, the money is available, and it has been available for quite some time now," he said in unusually blunt remarks to an audience that included Kenyan vice-president Moody Awori. "What remains is for the Government of Kenya to use that money quickly and effectively," Bellamy said, before turning to address Awori. "I... urge you again to use all your influence to get this government to start spending responsibly the funds it already has to fight Aids," he told the vice-president. Chief among Bellamy's complaints was a study that found Kenya's health ministry was spending more than $6.5m a year to pay ghost workers. "It is not too much to ask that the ministry stop paying for these unoccupied positions and redirect that funding to real people in real positions," he said. Aids has killed about 1.5 million people in Kenya since 1984, according to the government which says the national infection rate dropped from 14% in 2000 to seven percent in 2004.

From News24, South Africa, 2 February 2005

Research Ethics 'Watchdog' Planned in Zambia

Lusaka - Zambia is to set up an independent national committee to monitor the ethics of health research, and to protect the rights, health and safety of participants in clinical trials of potential drugs. Announcing the plans at the opening of the national health research conference in Lusaka last month (January 20-22), Zambia's health minister Brian Chituwo said that for some health studies undertaken in Zambia, researchers have been able to avoid assessment of research ethics. The committee, to be set up this year, will be made up of both scientists and non-scientists, whose appointment will be decided by the ministry of justice. It will review the ethics of all research undertaken in the country. According to the Chituwo, research should be guided by some fundamental moral commitments: the sustainable improvement in human welfare through the expansion of scientific knowledge, the understanding of disease patterns and changing human conditions and the protection of health and dignity of research trial participants. He expressed concern at the inadequate coverage of research ethics in the basic training of medical students and other health providers, and appealed to the institutions responsible to remedy this situation.

Scientists at the conference welcomed the decision to set up an independent committee, which could replace two existing ethics review committees at the University of Zambia and at the Tropical Disease Research Centre. These operate according to the guidelines and procedures of the institutions they are based at. The ministry of justice will decide whether the new committee will supplant the existing ones entirely — which would mean disbanding them - or whether they will operate in parallel. The creation of the new committee is timely, says Joseph Mtetwa, head of health systems research at the Tropical Disease Research Centre. He told SciDev.Net that, "fabrication, falsification and plagiarism of data in health research is rampant in Zambia," but did not want to give any examples for fear of victimisation. He said the ethics committee should be free from political interference and conflict of interest, and should provide independent, competent and timely review of proposed studies. Mtetwa also said the committee should ensure that research goals, no matter how important, are never allowed to override the health and wellbeing of research participants. Misconduct observed by the ethics committee, he added, should result in a fine or discontinuation of the project, and if necessary, the researchers involved should be forbidden from conducting further studies.

From SciDev.net, UK, by Talent Ngandwe, 1 February 2005

EU Funds Medical Ethics Network in Africa

A new initiative aimed at fostering medical research ethics committees in Africa was launched in Paris on 27 January. The 'networking for ethics on biomedical research in Africa' (NEBRA) initiative, financed under the Sixth Framework Programme (FP6), also intends to encourage the participation of African research ethics committees in the international debate on ethics. 'NEBRA is a logical response to the needs expressed by African partners who want to participate in international medical research and attract medical research for their countries' health priorities,' said NEBRA coordinator Francois Hirsch, from the French National Institute for Research and Health (INSERM). 'Improved ethical practices will enable the participating countries to attract clinical research fulfilling international requirements in ethics in their regions. As a result, the countries will benefit from the research which will lead to improved management of public health issues like malaria, AIDS and tuberculosis,' he added. The project brings together four African countries, Benin, Gabon, Gambia and Mali, the INSERM, the UK's Medical Research Council (MRC), Germany's Department of Parasitology at the Eberhard Karls University, and the World Health Organisation (WHO). 11 other African countries are also involved in the project as participating countries. Together they will aim to develop a deeper understanding of the ethical issues raised by research in Africa, and identify the people working in that area and their needs.

The initiative follows from the European and Developing Countries Clinical Trials Partnership (EDCTP) aimed at accelerating the evaluation and development of therapeutic and preventative medicines for malaria, tuberculosis (TB) and HIV/AIDS in developing countries. For EDCTP to be successful, there needs to be adequate capacity for reviewing research ethics in Africa. At present, however, it is not even known how much capacity already exists. As the project partners explain, the first stage of the initiative will involve students from the 15 participating countries conducting interviews with health ministers or university representatives in order to identify the existing ethics review capacity and further needs for each individual country. If successful, NEBRA will be extended to other African nations. It is hoped the programme will boost Africa's scientific capacity and make African countries international players in biomedical research.

From Cordis News, European Union, 2 February, 2005

How Fight Against Corruption Will Be Won

Parliament yesterday heard that the fight against corruption and the deadly HIV/AIDS pandemic will only be won if Government addressed poverty which is the root cause. Chadiza MP Phillip Zulu (UNIP) told Parliament that it would be difficult for Government to win the fight against corruption if it did not address the cause. The MP who was contributing to this year's Budget debate said Government needed to examine why corruption and HIV/AIDS had become prevalent in the country. He said Government needed to tackle the issue of low salaries for civil servants as such factors forced them to engage in corrupt practices as well as other dangerous activities. And Chilanga MP Cosmas Moono(UPND) said Government should allocate more money to the education and health sectors to address pressing needs of the two sectors. Capt Moono said Government needed to provide money in education so that schools in rural areas could be improved. He said it was also wrong for Government to repossess land from Zambians and give foreigners simply because they had failed to develop it. Education Deputy Minister Eddie Kasukumya defended Government's fight against corruption saying the exercise progressed on very well. He said Government was also committed to tackling needs highlighted by opposition.

Mongu Central MP Francis Simenda (UPND) said Government should broaden its tax base to offer relief to over-taxed individuals. He said Government should also deal with the problem of lack of schools in his constituency where children travelled 20 kilometres to reach schools in the area. Mr Simenda said as a result, 200 children in his constituency were not attending school. And Speaker Amusaa Mwanamwambwa yesterday directed opposition parliamentary chief whips to find out why their members had defied his ruling not to wear green ribbons and ties in the House as protest over the Constitution-making process. The Speaker made the directive in reference to Commerce Deputy Minister Eugene Appel's point of order over the issue. Meanwhile, Deputy Speaker Jason Mfula also directed Justice Minister George Kunda to advise the House over the issue of President Mwanawasa's decision to change the portfolio of Provincial deputy ministers to that of Provincial ministers without Parliament approval. Mr Mfula said this in reference to a point of order raised by Luena MP Cripin Sibetta who said Government had altered the Constitution by changing the article without Parliament approval.

From AllAfrica.com, Africa, The Times of Zambia, Ndola, 2 February 2005

Guebuza Pledges Crackdown On Crime and Corruption

Maputo - The fight against crime and corruption will be "a central point on my agenda", Mozambique's new President, Armando Guebuza, promised at his inauguration ceremony on Wednesday Crime and corruption were "insidious enemies" that "present themselves as alternative means of reaching wealth", said Guebuza. "They erode citizens' trust in institutions and undermine all efforts aimed at enhancing efficiency and effectiveness in the public service and at strengthening a society in which the values of justice, ethics and respect for human life and for citizens' rights and freedoms prevail". Guebuza pledged that his government "will strive to strengthen the institutions responsible for public security and the administration of justice throughout the country, doing its best to provide them with the necessary human, material and financial resources".

In particular, he would "encourage the courts to be more expeditious in settling conflicts and restoring the rights of individuals and companies when breached, and in consolidating professional ethics". These words may be polite and measured, but they amount to a condemnation of unethical practices in the Mozambican legal system, of the leisurely pace of the administration of justice, and of the enormous difficulties in using courts to impose respect for contracts. Guebuza also promised that his government will demand that civil servants improve their performance. The type of public administration he desired "is not compatible with the red tape and apathy found among some civil service". "We will strive for a public service that encourages development", said Guebuza, "through greater productivity of its officials, whose key function is to support, help and facilitate transactions of individuals and institutions".

The duty of state employees was to improve the services provided to the public in offices, schools, hospitals and other state department, "in strict respect for the law and their professional obligations". He was not demanding anything new, Guebuza stressed. "In the past, our civil servants succeeded in rendering an exemplary service to citizens, despite the prevailing professional and material constraints", he said, clearly thinking of the years immediately following Mozambican independence in 1975. He wanted to see today's civil servants "take leadership in the current public sector reform, and to show more respect for citizens".

Guebuza promised to announce his government in the next few days. He gave no names, but said that the qualities for inclusion in the government included, apart from a commitment to the Frelimo election manifesto, "humility, love and respect for our people, and a commitment to provide them with increasingly better services". Members of the new government should also be committed to "transparent management of public assets", "respect for gender equality", "participatory democracy and the culture of peace". Guebuza said they should also be "committed to fighting against intrigue". He pledged that a style of "open presidency" would be followed at all levels "so that our people can follow every step that each member of the government is making in the fight against poverty".

From AllAfrica.com, Africa, Agencia de Informacao de Mocambique, Maputo, 2 February 2005

Cost of Corruption Rising, Says UK Envoy

Nairobi - The following is an edited version of the speech given by the British High Commissioner, Sir Edward Clay, pictured, at the Annual Journalists of the Year Awards Dinner, yesterday.

I want to speak tonight about investigative journalism and corruption: what they have in common is a link to good governance. A free press is a necessary but not a sufficient condition of a free society: a free press is not necessarily a good press, all the time. But an unfree press is never a good press: it is incompatible with a properly functioning democratic society. Corruption is the biggest single impediment to good governance in Kenya. And corruption is a challenge and a test for the investigative journalist. Corruption is so commonplace that the media can only afford to focus on the most flagrant cases. Recent events and almost daily news stories reveal new and emerging scandals: abuse of office, conflict of interest, patronage, favouritism, clientism, grand and petty corruption, and, above all, questionable procurements. The media are, however, short on substantive answers to the questions posed by revelations about earlier government deals. There has been a change in the tone of government statements since six months ago: no-one speaks now as they spoke then; there is no outright denial any more. There is lots of whitewash covering those displeasing shoes, but no denial that underneath, it's still there, that unpleasing substance. Not just on the shoes of the donors, incidentally, but also all over the shoes of Kenyans .... and the feet of those who can't afford shoes.

But let's first, in the interests of balanced reporting, look at the potentially good news. Attitudes are changing. - Not long ago I noticed a news item about a clerk of the office of the Registrar of Persons in Gucha who was ordered by his boss to refund a Sh1,000 bribe he had allegedly accepted from two applicants for ID cards. That is not a large amount of money by the standards of the scandals you report day by day. Nor is it an unusual event for an official to extract a bribe. The news-value lay in the fact that he had been ordered to re-fund it. You media-people know the old adage that 'dog bites man' is not news; but 'man bites dog' - that's news. - The public debate and interest in the subject continues. It seems Kenyans are concerned about this as a central issue in the governance of their country. They do not think the Anglo Leasing and Finance scandal should just be buried; and recent media reports tell us you and they hope they won't be, though the sounds from government are discordant.

- The renaissance of the KACC, though it will not be fully manned for its work for a few months yet. Some 36 or so case files are now with the Attorney General. - The Transparency International Conference at the beginning of October. This offered an excellent opportunity for some ringing declarations by the President and some of his ministers about their total commitment to the war on corruption. In Mr Kiraitu Murungi's remarks we saw how far the government's language on corruption has changed since the initial hostile and dismissive responses to disclosure of the Anglo 'Fleecing' scandals and to my speech in mid-July last year. We have had acknowledgements that:

- Corruption was rampant and Kenya's biggest problem, constituting the greatest bottleneck to Kenya's development efforts; - The old corrupt networks were still in business, and fighting back. - Political leadership was crucial; -Corruption existed at the heart of government;
- The war on corruption was betrayed by some of the very people supposed to be leading the fight against it;- Corruption was rife in the procurement process: indeed the networks of corruption remained the critical determinant of what government procured; and
- Politics and corruption were bound up together, creating arenas of competitive bribery.

Besides the rhetoric there have reportedly been some useful practical steps: An audit has begun of external debts and the contracts covered by them; An audit of national security procurement is under way; A re-definition of 'national security' intended to narrow its use, and of rules for security contracts (as re-defined). New procurement rules have been included in the Procurement Bill; and, a promise that government will legislate to make declarations of wealth by MPs, ministers and civil servants publicly accessible. Let's hope it happens, and embraces - as I believe the Cabinet Committee intends - last year's and this year's declarations. I am sure you will be watching for it as keenly as your readers (including me) will be, and asking about it. The first two audits are not fully satisfactory: - they are not being conducted transparently, - their scope has not been announced publicly, - they are not open to independent audit.

If they are to carry any credibility at all they will need to carry transparency and scrutiny as well. We are told they will be reported to Parliament through the Public Accounts Committee. This is the same PAC whose authority has already been so badly damaged in respect of the Anglo 'Fleecing' scandal. And the rhetoric still needs to be matched with actions, which will require firm political will and courage. The evidence stacks up, meanwhile, that the Government's statements that corruption is Kenya's most serious problem is true: Transparency International's Global Corruption Barometer for 2004, published last month reminds us that that is so. I heard people comment that, even if wealth declarations were made public, Kenyans would accept that, but take no further interest. I quite see why Mr Maina Kiai, chairman of the Kenyan National Human Rights Commission, wants all Kenyans first of all to press for transparency; and, second, to use the opportunities it gives them to pursue these important matters of public interest. The keen researcher can already do much to uncover the skeletons of corruption. The Internet offers fascinating material. So do the various public offices: land titles could have been investigated, if imperfectly, before Ndung'u's publication; we know in fact that Ndung'u could only cover a small percentage of illegal land transactions, and their report states "the illegal or irregular allocations listed in this report may very well just be the tip of the iceberg."

Somewhere between the kitu kidogo and the conclusion of a contract worth millions of dollars through bent procedures to acquire for the Government something it doesn't need, hasn't provided for, and at a fictitious price, is a level at which the searchlight of investigation should turn on those in charge. And the question of whether top officials should take personal responsibility has to be asked, and answered. The issue is, whether there was negligence or complicity. And the first layer of whitewash, now being touted by people who should know better, is that since the money from patently dishonest deals has been returned, there is no need of investigation. Or since a dubious tender has been cancelled, there is no need of further enquiry about why it was improper. Who ought to ask questions about corruption? Most ministers say 'not diplomats'. Quite right. We foreigners should not have to spend time doing what it is the duty of others to do, and which it is clear Kenyans want them to do. It falls to you to demonstrate to your readers that here is an issue that needs further enquiry by the proper authorities; and to explain why it is important.What the public has a right to expect is scrutiny by its elected representatives; assisted by the Office of the Comptroller and Auditor General, who reports to Parliament.

Recent experience suggests this system of enforcing accountability, transparency and responsibility is not being allowed to work as it should. For examples: the recommendation in the Public Accounts Committee related to the need for acceptance of personal responsibility for the Anglo Leasing and Finance fiasco was expunged by a vote in the house of only 59 MPs, on a majority of three. What does that say about the standing of that potentially most powerful committee, the PAC? Or the standing of the Office of the Comptroller and Auditor-General, Parliament's servant and their major strong instrument in its efforts to control the Executive? Then, Parliament rejected what remained of their own Committee's Report. I did not expect the Democratic Republic of Congo to teach Kenya lessons in parliamentary control of the Executive. Yet President Joseph Kabila recently suspended six ministers and the boards of 10 parastatals following accusations of embezzlement levelled against them in a parliamentary report. It is a vital national interest for Kenyans concerned for their government's probity, international standing and ability to spend their resources - and others' - in fulfilment of the government's own strategy for reversing Kenya's decline and increasing impoverishment. As you would expect, the United Kingdom is ready and willing to help the Kenyan authorities investigate corruption. There have already been several useful episodes of cooperation between our people and the anti-corruption authorities here.

And I have recently passed to the appropriate Authorities details of twenty deals or procurements, which, I believe, merit the following treatment: i) Full and transparent investigation of a kind accessible and comprehensible in its entirety to every Kenyan taxpayer and citizen; ii) Resolution, whereby those against whom sufficient evidence of corrupt practice exists are, as appropriate, dismissed and prosecuted; iii) Repair - whereby action is taken to ensure that such opportunities are blocked in future.

Most such deals or procurements worthy of investigation are already partially in the public domain. Some are not. The list I have given your authorities is not complete. Far from it. Many stones remain unturned. - .. Many, many stones.You know a lot about Anglo Leasing, or Fleecing. Is it, as some argue, a dead issue meriting no further investigation or prosecution? In the first place the two deals show that Anglo 'Fleecing' is a clear example of a bridge between old and new corruption, between deals under the last KANU government and the current one. Under the Budget's list of external debts there is named an outfit called Silverson-Forensic. That is one to add to the payments to Anglo 'Fleecing'. The budget also shows payments last year and this to another company called Universal Satspace.

You can learn a lot if you look at publicly available evidence like the budget and then follow your nose and ask questions. If Government refuses to answer, you are very likely onto something! Try this approach on Universal Satspace. What do the chameleon-like appearances of famous but somehow unavailable businessmen tell us so far about grand corruption? First, networks of corruption can go back many years and, second, contacts built up under one government can be used by a well-entrenched outsider for dodgy dealings with its successor. Second, however many company names these people trade under or with which they are associated, the customer here in most of these cases is the good old OP. I have, as I say, given over to the Kenyan authorities the bare details of those twenty dodgy tenders. Their combined value leaves far behind the figure of Sh15 billion I gave back in July. Some rejected that figure or called it unsubstantiated. As more evidence of current corruption emerges, that figure will look ridiculously small.

Indeed, my private estimate of the cost of petty corruption alone makes it even tinier. With the impact of crooked deals or tenders you have read about in the media over the last year or two, they are enough to have a significant macroeconomic impact. I am curious, as I expect you are, about the recent procurement, for many more millions, of one or two civilian ships. This is a deal unofficially denied by the Department of Defence here. Kenya buys civilian ships. Then it converts them into warships. The Kenyan Navy has four such hybrids in service and is buying one or two more. Questions needing asking include: - Why are these ships being bought? - Where they fit into the Economic Recovery Strategy? and - Why the Kenyan authorities follow this seemingly secretive and roundabout way of acquiring warships for its Navy?

There are lots of things about corruption which weaken a state. It distorts the policy process; things are bought not because they are needed or even the best buy, but offer the best rake-off. From looting through grand corruption to petty corruption, the whole system makes the citizen's life intolerable. With it goes favouritism, nepotism, ethnic or regional preferences, and a wholesale denial of services. Also, a system of dissuasion, intimidation and repression which is contrary to good governance and impedes your legitimate enquiries and the public's legitimate interest. Either way, my current list now adds up to a lot more than the Sh15 billion I mentioned in July. That sum alone could have covered twice over the government's budget deficit. Or perhaps enabled it to cope with its citizens' need for famine relief. Or build 15,000 classrooms, meeting half the Ministry of Education's requirement. At the lower end of the scale of opportunity costs, just Sh2 billion would buy 10 million double size treated bednets: their availability would save 130,000 child lives lost to malaria.

Four of the deals on the list I have given to your authorities are larger than the infamous passports' scandal run by Anglo Leasing, which caused such a stink. So they must surely rate a commensurately bigger furore in demanding explanations. There is another noteworthy point. The names of certain international businessmen recur. What is interesting is the role of Kenyan people who are neither elected nor officials of government in the questionable negotiations of these significant transactions on behalf of government. Ask your newsvendor or the shoe-shiner if you want a highly informed list of who they are. And there is the role of people outside Kenya, who manipulate people inside Kenya, near to or actually in the government, with an ease and confidence which is frightening. They believe that, whatever electors may do, there will always be people in a new government who can be manipulated. Perhaps as the media unkindly refer to the Mount Kenya Mafia, the manipulators refer, as they toast their own good fortune in mansions far away, to the Mt Kenya Marionettes. I got some criticism for the language I used back in July last year. Looking back, I regret three things: not speaking out much earlier than July; underestimating the scale of the looting afoot; and the moderation of the language I used then: that was clearly inexcusably polite in relation to what we see going on. Even more so in light of what we discern, but do not see fully... - ..Yet.

I have been encouraged by more recent and very firm re-statements of the government's commitment to the war on corruption. That's why I return to the subject tonight: I am a supporter of their war strategy, and want to cheer their declared will to win. And I believe you have an interest in this war, too, reflecting the interests of the public. Here's a slightly adapted and shortened poem of TS Eliot, about a cat (not a leopard) who always gets away from the law. Eliot liked cats and wrote about all sorts of cat-characters. His long poem about cats inspired the famous musical "Cats". This one, called Macavity, is a really bad cat. He's also very clever. When he does something bad and people get after him, he always manages to escape. I hope this adaptation may amuse for a moment the hard-working investigators who are trying to find the footprints of the Macavitys in Kenya, and encourage them to keep looking.

"Macavity's a mystery cat, he's called the hidden paw - For he's the great facilitator, far above the law. He's a menace to the donors, he's the taxpayers' despair: For the treasury is empty - .but Macavity's not there! Macavity, Macavity, there's no one like Macavity, He flourishes in cyberspace, he stalks through zero gravity. He'll be on a yacht off Cyprus when they find the cupboard's bare, For the treasury is empty - ..but Macavity's not there: Don't ask for him in government - you'll get an icy stare And they'll tell you once and once again, Macavity's not there.
He likes to be in transit and he's partial to hotels, He has a place in Manchester, he's fond of the Seychelles. So when the nation's revenue's in European banks, Or you need a team of tractors but acquire a troop of tanks, Or the nation's full of caviar, but hasn't any bread, Or you want a road for Christmas, but a frigate comes instead, Or you're buying a police car and you're paying through your teeth, For a chicken house that's blue and white and rotten underneath: You can look behind the scenery or stare up in the air, But the Ministers will tell you that Macavity's not there. His manipulative skills would make a physio despair, For the Treasury is empty - ..but Macavity's not there!"

From AllAfrica.com, Africa, by The Nation, Nairobi, 2 February 2005

Kenya Defends Corruption Record

Nairobi - The Kenyan government on Thursday defended its record on corruption following a fresh attack by Britain's high commissioner to Kenya, who alleged there was "massive looting" of public funds in the east African country. Kenyan Vice President Moody Awori said the ongoing war on corruption was not in any way pegged on pressure by outsiders, but is a homegrown initiative by Kenyans themselves for their own benefit. Responding to criticism by the British envoy, Awori said Kenyans would not allow themselves to be dictated by foreigners and that Kenyans would themselves pursue avenues that they deem best for their interests. The cases purported to have been brought to light were already in the hands of various government machinery fighting corruption, he said while launching the International Press Institute Corporate Sponsorship in Nairobi.

Britain's High Commissioner to Kenya Edward Clay late Wednesdaysaid he had handed to the government a dossier of 20 suspicious tenders. Clay said those suspected of involvement in corruption, including government ministers, should be removed so that investigations are not hindered. The vice president assured that there will be prosecution and those found guilty of graft will face the full face of the law regardless of one's status in the society. "We will continue to fight corruption, but sometimes I get a little confused because we are using a legal system we were taught from the West. It taught this, that you are innocent until proven guilty," Awori said. Twice last year, the British envoy accused Kenyan ministers of involvement in "a gigantic looting spree," charging that the government's onslaught on sleaze was "evidently flawed," which sparked a diplomatic row between Nairobi and London.

From Xinhua, China, 4 February 2005

Act Decisively On Corruption Cases, State Urged

Kanyama - UPND Member of Parliament Henry Mtonga has called on Government to act decisively on corruption cases highlighted in the Auditor-General's report if the fight against corruption is to be won. He said it was sad that a team from the Zambia Revenue Authority (ZRA) who allegedly stole K1 billion should be asked to repay the money instead of just terminating their employment. Mr Mtonga, who was debating on estimates of this year's Budget, said cases of corruption needed to be dealt with conclusively by Government so that culprits behind such vices were taught serious lessons. He cited another case of the Chipata-Lundazi road where Government paid a contractor to work on the road even when they allegedly did not undertake any works.

Tourism Deputy Minister Neddy Nzowa in his debate called on the international community to show the same response they had shown to the tsunami disaster in East Asia to Africa in its fight against the HIV/AIDS pandemic. Defence Deputy Minister Wamundila Muliokela, his counterparts at Information Gaston Sichilima and Commerce Eugene Appel said this year's Budget was poverty eradication-focused. Mr Muliokela also commended the Barotse Royal Establishment for banning Women for Change activities in Western Province. Mapatizya MP Grace Sialumba (UPND) said Government needed to allocate more money for road construction to boost development in the country. Lupososhi MP Emmanuel Musonda (PF) said Government needed to establish a sustainable fish restocking programme for dams in Luapula and Northern provinces. Mbabala MP Emmanuel Hachipuka (UPND) asked Government to state how much total revenue was raised through the fuel levy whose budget was pegged at K75 billion but Government released K112 billion.

From AllAfrica.com, Africa, The Times of Zambia, Ndola, 4 February 2005

Cut Corruption to Save African Forests - Activists

Brazzaville - African leaders agreed bold plans at the weekend to preserve the world's second biggest rainforest area but Kenya's Nobel prize-winning environmentalist told them they would need to root out corruption to succeed. At a conference in Brazzaville, central African heads of state signed a treaty pledging to protect the forests of the Congo Basin from massive poaching and illegal or irresponsible logging which threaten the flora and fauna of the region. Stretching across some 200 million hectares and six states, the dense forests are home to half of Africa's wild animals - including gorillas, chimpanzees and forest elephants - as well as more than 10,000 plant species.

About 70 percent of the Congo Basin forests may be gone by 2040 unless action is taken, global conservation group WWF says. Kenya's deputy environment minister, Wangari Maathai, winner of the 2004 Nobel Peace Prize, accepted an invitation from the leaders to become a roving ambassador for the Congo Basin even though her country is not part of the region. But Maathai, who won the Nobel prize after leading a massive tree-planting scheme and campaigning against corruption, also noted several speakers at the conference in the capital of Congo Republic had stressed the need for good governance. "It is not by coincidence. Rather, it is because it is a serious issue and we must address it," she said on Saturday. "We have many friends," she said. "They want to help us. But we must create an enabling environment for development partners to do their part."

Funds Squandered - As several states in the region such as the Democratic Republic of Congo and the Central African Republic are among the poorest on the planet, activists say the West will have to provide much of the funding for conservation measures. All of the countries concerned are also regularly ranked among the world's most corrupt. Local and international watchdogs says there is clear evidence of large-scale illegal logging and officials embezzling or squandering much of the money timber companies pay to the state to help local communities. "It's scandalous how little of that money that is generated trickles down to local people," said Filip Verbelen, a Greenpeace campaigner who has traveled the world studying forests and logging operations.

Verbelen said the Congo Basin countries first committed themselves to preserving the forests at a summit six years ago but illegal and irresponsible logging remained widespread. "On paper, yes, they have the right language," he said. "But I have no indication at all that there is a political will to implement these measures fast." Verbelen added, however, that regional states and Western nations were at least now talking openly of illegal logging as a major problem when they had previously shown little interest. The campaigners' next challenge is to try to create a similar change in attitude when it comes to corruption. "To paraphrase the words of President Kennedy, let us not ask what we can get from the Congo Basin. Rather, what we can do for the Congo Basin," Maathai told the summit. "The basin does not need us, we need it."

From Reuters.uk, UK, by Andrew Gray, 6 February 2005

United States Freezes Aid

The United States yesterday froze Sh200 million aid for the anti-corruption campaign and said another Sh560 million is at risk over the resignation of President Mwai Kibaki's advisor, Mr John Githongo. At the same time, eight of Kenya's leading donors gave the President an ultimatum to prove that he and his government are committed to what they termed "Narc's alleged anti-corruption campaign. The US, Canada, Germany, Japan, Norway, Sweden, Switzerland and the United Kingdom closed ranks to demand the resignation of Cabinet ministers implicated in corruption in order to repair the Government's dwindling image in the fight against corruption. They asked for "a concrete and measurable government plan of action" against corruption in the wake of Githongo's resignation. "Mr Githongo's resignation leaves a huge void in the Government. It is imperative, therefore, that the President conducts an immediate review of his government's approach in dealing with this crisis and takes early action to restore credibility," they said in a joint statement. In a brief resignation message faxed to newsrooms on Monday from London, Githongo said he had quit because he was no longer able to continue working with the Government.

Should the eight countries - which account for most of Kenya's bilateral aid - take the precipitate step of cutting aid to various sectors, the first casualty is likely to be Finance minister David Mwiraria's national budget. According to the minister's Budget speech, donor funds constitute close to Sh70 billion of the Sh440 billion annual expenditure plan. The biggest pain will, however, be felt in the various sectors where the donors had committed to funding reform programmes. Together with the Sh200 million freeze announced by US Ambassador William Bellammy, billions of shillings worth of funding to key programmes such as the reform of the justice and legal system, agricultural sector reforms, infrastructural development, tourism and health sector reform where the eight countries are the lead financiers, are now on the line. The greatest fear, however, remains the impact the withholding of the funds is likely to have on the country's volatile financial markets. The move could prove to be particularly painful to holders of personal and home loans who are likely to see interest rates rise as the Government resorts to domestic borrowing to plug the budget holes. Githongo, who worked directly with the President as his adviser on corruption, resigned while on official duty in the United Kingdom.

The donors, in their statement, demanded not just the resignation of the lords of corruption but also that their misdeeds be made public and prosecutions be brought against them. They said Githongo's resignation posed "an extremely serious challenge" to the credibility of the Government's anti-corruption policy. They asked that the Government reviews its anti-corruption strategy and reaffirm its determination "at the highest levels" to tackle grand corruption. Noting that Githongo was yet to say why he resigned, the missions said it was informed by his concerns over the return of corruption in high places. "Indeed, it is known that his efforts in pursuing some of the more notorious cases that have come to light recently were being frustrated at every turn," they said. The foreign missions termed Githongo as a man with a solid experience in the fight against corruption since his days as director of the Kenyan chapter of Transparency International.

They noted that during an international anti-corruption conference in Nairobi last October, he emerged as the national and international face of the fight against corruption. Because of his stewardship, they said, progress had been made and several anti-corruption laws passed. Further, appropriate institutions had been created to deal with the menace. But with his departure, the war-against corruption had suffered a major blow, they said, and demanded that Kibaki takes action to restore donor confidence. "Such actions are necessary not only for the fruitful and successful continuation of international partnerships, but also for the confidence of the Kenyan people who appear to have become increasingly disillusioned with the Government's performance in this area," they said.

Announcing the aid freeze, the US also warned the Government to do something about corruption or risk losing Sh560 million (US$ 7 million) funding for governance programmes, under the Millennium Challenge Account. Bellamy said the kingpins of corruption were operating within President Kibaki's armpit and simple public servants could not push them out. "Exemplary public servants are no match for an Executive branch of government in whose rank the kingpins of corruption operate," Bellamy said. Bellamy spoke at a private luncheon of the British Business Association. Sections of the Government affected by the aid freeze are the Justice Ministry, Office of Governance and Ethics, and the Kenya Anti-Corruption Commission.

Bellamy called for an end to endless wrangling in government, noting that squabbling had held back development in the last two years. "There is no divide between left or right in Kenya. And yet the political infighting is bitter, leading often to paralysis," he said. Bellamy said there was too much anti corruption rhetoric with no action. That is why " fledgling steps, the good intentions, the strong statements issued by President Kibaki" have not been enough to change the culture of corruption in Kenya. "If we didn't fully understand it before yesterday, we should understand now that fighting corruption is not something that can be delegated to a handful of brave but vulnerable civil servants sitting in some office on the other side of town." That is why, he said, the fight was not going to be won by the Permanent Secretary for Ethics and Governance or KACC. "This much-vaunted machinery set up to fight corruption was never meant to operate against those in power today. John Githongo, Justice Ringera, whoever else you care to name - however honest and exemplary they are as public servants -- are no match for an Executive branch of government in whose ranks the kingpins of corruption operate."

The envoy told the Government to battle the vice or be overwhelmed by it. "That is the choice facing Kenya today. It is not enough to say: we passed some laws back in early 2003, we fired some judges, and we've set up anti-corruption machinery." Bellamy said his government was committed to working with the Kibaki government but the latter must change their corrupt ways. He detailed projects the US government has implemented in the country and support given in the year 2004. "Let me be very clear about this. We are eager to work with Kenya to improve governance, and we are in a position to be generous in this regard. But we cannot be helpful when all the evidence suggests that the Government isn't serious or, worse, that government is the source of the problem."

He said there is a "straight-line correlation" between the corruption of the 1980s and 1990s and Kenya's steady social and economic decline during that period. He noted that the bad ways of the Kanu government are continuing today. Referring to the Sh500 million payments for ghost workers and improper allowances in the Health Ministry, he said the funds were enough to employ up to 2,000 nurses. "The total value of the 20 corrupt or highly suspect deals which Sir Edward Clay mentioned last week would almost cover this year's budget deficit. Put another way, that amount would finance anti-retroviral drug treatment for every HIV-affected Kenyan who needs it for the next 10 years." "Every Kenyan labouring to feed his family, educate his children, care for a family member suffering from Aids or simply avoid getting hacked to death in the mounting wave of violence sweeping this country is a victim of today's corruption." However, Bellamy conceded some gains have been achieved. He said the private sector and not the Government have achieved the development.

"A little progress has been made over the past two years. Though the average Kenyan is not better off than he was two years ago in terms of income or employment or access to services, the economy as a whole has registered a few sectoral gains." Bellamy asked the Government to privatize, what he called "loss-making, graft-breeding parastatals". "Failing telecommunications, roads, railways and ports; expensive and unreliable energy supplies; state controlled banks crippled by non-performing loans; and marketing boards that only serve to discourage production all cry out for decisive action now," stated Bellamy. During year, 2004, the United States allocated about $175 million in direct and project assistance to Kenya. That is about Sh13.6 billion.

About $70 million of that was spent on combating HIV/Aids through President Bush's Emergency Plan for Aids relief, or PEPFAR. This year the US expects to spend more than $110 million in PEPFAR money in Kenya, the most the US will spend in any country in the world. Other significant United States Government investments in Kenya include: almost $30 million in assistance to Kenya's armed forces and police and prosecutors. Much of this is aimed at giving Kenya the capabilities to combat terrorism more effectively. $42 million in food aid is being given to the people of Kenya, of which more than $25 million was mobilized in response to President Kibaki's appeal last July, among others.

From East African Standard, Kenya, by Patrick Mathangani and Andrew Teyie, 9 February 2005

Kenya Takes United States Corruption Message to Heart

Kenya is taking seriously the political message behind the United States move to suspend $2,5-million in funding for anti-corruption work in the country, Minister of Justice Kiraitu Murungi said on Wednesday. Murungi was reacting to the announcement by US ambassador William Bellamy on Tuesday that his government is freezing support to Kenya's anti-corruption work, including efforts to set up a serious-fraud investigation unit and the work of the ethics and governance department. The move came one day after presidential anti-corruption adviser John Githongo resigned, reportedly because he was frustrated by lack of political will to take decisive action against senior government officials accused of corruption. "It is a strong message that the US is sending to the country ... It is a message that we are taking seriously," Murungi said. "We really want to take action, we don't want to be pushed to it." He added, however, that the fight against corruption is essentially a Kenyan affair that should be led by its government - and not by diplomats, donors or foreigners.

An anti-corruption coalition said on Tuesday that Githongo's resignation "sounds the death knell" on the government's fight against corruption. Twenty organisations signed the statement, including human rights groups, Kenya's main manufacturers' association and the Kenya chapter of the anti-graft lobby group Transparency International. The groups may withdraw from reform programmes they are working on with the government and call on citizens to withhold taxes if President Mwai Kibaki does not fire Cabinet ministers allegedly involved in corrupt deals, they said. Murungi said the fight against corruption has just begun and will be "bloody" and "bruising". He said that he expects those who benefit from corruption will use violence, just like organised crime groups reacted to government crackdowns in Italy. "We should not forget that this country [Kenya] has been one of the most corrupt countries in the world," Murungi said. He also sought to offset the political blow the government suffered from Githongo's resignation.

"We cannot fight corruption by running away from it. We cannot give up the fight, however difficult it is," Murungi said. "Networks of corruption are deeply entrenched in our system ... It is not possible, therefore, to fight corruption effectively with one sweep." Kibaki took over after winning December 2002 elections on pledges to clean up corruption that become endemic under the 24-year rule of former president Daniel arap Moi. British High Commissioner Edward Clay said last week that he recently presented Kibaki with a file on 20 corrupt government deals worth more than $192-million, which showed high-level graft continues. Most of those cases are related to security procurement in the president's office that also runs the Department of Defence, Murungi said. Eight Western embassies issued a statement saying that Githongo's resignation seriously damaged the government's anti-graft credentials. The US joined Britain, Canada, Germany, Japan, Norway, Sweden and Switzerland in signing.

From Mail & Guardian Online (subscription), South Africa , by Rodrique Ngowi, Nairobi, Kenya, 9 February 2005

Corruption in Northwest African Countries

Corruption does not have a central geographical location or an ethnic color or even a nationality, for wherever corruption finds a blind eye it expands, destroys the society and depletes the chances of development. In the recent days and in the absence of unity among countries of Northwestern Africa distant elements (perhaps by chance) combined to make corruption a headline reflecting the situation of these countries. The Algerians are preparing to draft a law against corruption that was studied by the council of ministers and will soon be sent to the parliament. This law is derived from the UN international convention for combating corruption, which aims at revealing the bribers and calls for the legal prosecution of corruptors.

It is noticeable that Algeria is the only Arab and African country that ratified this treaty so far; what are all the others waiting for? Perhaps the hosting of the Arab summit next month was one of the incentives for passing this new law simply because the summit's main issue would be "reform" according to what the new and current "fashion" in international relations suggests. However, it is more likely that the financial scandals in Algeria over the past few years, such as the recent bankruptcy of the "Khalifa Group" and the involvement of some of the military personnel in the trade networks and suspected deals called for the legislation of this new law that would contain this feature. One of the characteristics of this program is that it will grant the country a centralized surveillance apparatus that would monitor all public transactions and financial administration; the same mechanism would also be applied to the private sector. There is no doubt that the power centers that are harmed from this new law are seeking to delay its ratification or even discredit its content. In case they failed to do so, these forces will work on encumbering this new law by impeding the mechanism of legal prosecution. One of the new characteristics of this new law is the fact that it is not a formative step in the clear sense inasmuch as it places under the microscope of surveillance the different features of corruption; from the illegitimate money gathering and the disregard of bribery cases and tax evasions.

Morocco is also preparing for a major lawsuit against two close personal assistants of the Minister of Defense. The two men are charged with embezzlement. Probably this is a new page in the "Truth and Justice" book that the Moroccans have finally opened. However, news of Moroccan corruption reached the streets of Paris after Al Basari filed lawsuits in France against a Moroccan paper, claiming that this paper had accused him of sponsoring a corruption network that included his son who had gathered his fortune from the real estate business. Now, Paris has become a huge screen that reflects the images of corruption of countries of northwest Africa, for in addition to Basari's case, there were previous and similar Algerian and Tunisian cases. The French threatened to prosecute the son of Colonel Moammar Al Gadhafi after run-ins with the police in Paris. Accordingly, he exposed the lifestyle he is leading in France, and raised many questions about the sources of his family's fortune.

Most of the corruption cases are linked with the absence of transparency and freedom in society, and the situation is aggravating with the absence of the fourth estate (media) that would shed light on the despicable feature of corruption. On the other hand, it would encourage rebellion against the widespread of nepotism, corruption and the squandering of public funds. It has become clear from the experience of Eastern European countries and the regimes in developing countries that corruption expands in light of repression, and it has become apparent that corruption and repression nourish and complete each other. The battle of transparency is not only a governmental concern, and it is not the specialty of the parliaments alone, as the success and development of this battle lies in the participation of civil society via specialized organizations, as in the case of democratic countries. The selfish interests of groups in the countries of northwestern African countries have always been an obstacle facing the prospect of unity in the region. Any step that these countries advocate towards fighting corruption would facilitate the process of removing all the obstacles that impede the regional completion and regional unity.

From Dar Al-Hayat, Saudi Arabia, by Rashid Khashana, 7 February 2005

European Union Urges Kenya to be Serious About Corruption Fight by Cathy Majtenyi

The European Union says its 18 member states could reconsider their aid to Kenya if it does not show seriousness and urgency in eradicating corruption. The text of the European Union's statement released late Wednesday praised the Kenyan government for creating structures to fight corruption and promised to work closely with it and President Mwai Kibaki to eradicate the vice. But in the closing paragraph, the organization said its 18 member states have "important decisions" concerning "their own tax-payer-funded bilateral programs." An official with the European Union, Otto Moller, said member states will be watching Kenya closely as they make their budgetary decisions. "The outcome of these decision[s] will depend heavily on [the] government of Kenya's seriousness and sense of urgency in addressing these problems," he said. Dutch Ambassador Tanya Van Gool told VOA the European Union's statement is not meant to threaten the Kenyan government, but rather an encouragement for it to do better. Ms. Van Gool, whose country holds the EU presidency, would not specify what criteria member states would use to determine the seriousness and effectiveness of the government in the corruption fight.

"We are convinced that Kenyan authorities and institutions know very well what is their mandate and what they can do," the ambassador said. " As I said, a lot of positive work has been done in creating institutions, in creating programs and campaigns. But they need the means to work, they need legitimacy, they need trust, they need independence, and they need to do their job. We have not seen outcomes of that." Ms. Van Gool said the basis of the relationship between the EU and Kenya is good governance. She said without that, development is not possible. The EU statement follows a dramatic series of events that began last week when British Ambassador Edward Clay said he presented Kenyan authorities 20 cases of major government corruption worth many times more than the $200 million cost he had quoted earlier. Several days later, the permanent secretary of governance and ethics, John Githongo, resigned his post. Associates said he was continually stymied in his efforts to expose and resolve corrupt deals. Reacting to the resignation, U.S. Ambassador William Bellamy announced that the United States would suspend $2.5 million of aid earmarked for government programs to fight corruption. Eight countries including the United Sates and Canada signed a statement saying Mr. Githongo's resignation posses what they called "an extremely serious challenge to the credibility of the government's anti-corruption policy."

From Voice of America, 10 February 2005

IMF Team to Monitor Financial Performance

Lilongwe - International Monetary Fund (IMF) representatives are visiting Malawi this week to analyse the country's financial performance in the last quarter of 2004. The IMF team visited the country last November and said it was impressed with the economic performance of government, and especially its fight against corruption. Malawi relies heavily on balance of payments support from donors, which accounts for up to 80 percent of the country's development budget. Other donors have indicated that their assistance would depend on IMF recommendations. Christopher Wraight, the British Deputy High Commissioner to Malawi, said, "Recommendations by the IMF are important to the donors, but this does not mean that all the support we have given Malawi is based on [them]." Secretary to the Treasury Milton Kuntengule told the local press that the IMF team, which arrives on Tuesday, would be in the country for two weeks. The IMF and other donors suspended financial support to Malawi some three years ago when the former government failed to meet spending targets and bring corruption under control.

From Reuters AlertNet, UK, 14 February 2004

Kabbah to Launch National Anti-Corruption Strategy

A press release issued by the Anti-Corruption Commission (ACC) has indicated that President Kabbah would launch the National Anti-Corruption Strategy next Tuesday. The strategic document is a successful outcome of a two-day national consultative conference held at Kimbima Hotel from February 2-3 this year by the National Anti-Corruption Strategy Consultative Group. "National Anti-Corruption Strategies are the strategic action plans developed and implemented by governments in conjunction with other stakeholders to orchestrate national anti-corruption efforts," the release states, adding that the strategies are action plans aimed at identifying the root causes of corruption. The release further states that the two-day meeting attracted about 200 participants across the country to discuss the attitudes, causes and cost of corruption and measures to be included in the strategy. "This would help identify the most urgent areas for reform and then establish ownership of and commitment to the strategy," the release states. The launching ceremony would be preceded by an Integrity Retreat between the ACC and ministers responsible for the main areas of reform.

From AllAfrica.com, Africa, by Tanu Jalloh of Concord Times, Freetown, 11 February 2005

Nigeria to Impose Controls on Oil Finances - Obasanjo

Abuja - Nigeria's state energy company has resisted government attempts to audit its spending, but will now have to comply with anti-corruption controls, President Olusegun Obasanjo said in comments published on Tuesday. Obasanjo created a due process unit in the presidency three years ago to reduce fraud and cost inflation in government procurement contracts, but state-run Nigerian National Petroleum Corp. (NNPC) had escaped its remit until now. "NNPC has always fought due process, but I have given them an order to obey. No aspect of government transaction, no aspect of government business will escape," Obasanjo was quoted as saying at the opening of a conference on Monday in Tuesday's edition of ThisDay newspaper. Nigeria is the world's eighth largest oil exporter and NNPC controls about half of its 2.3 million barrels per day output, worth a total of $30 billion annually. The government's economic cabinet, which is driving a high-profile anti-corruption campaign as part of wider economic reforms, has been trying unsuccessfully to audit the nation's oil revenues since last year.

In April 2004, the head of the due process unit promised an audit of oil revenues by August that year. It has yet to appear. Obasanjo's critics say his government is only half-hearted about cracking down on graft in Nigeria, ranked as the third most corrupt nation in the world by sleaze watchdog Transparency International. The head of the Economic and Financial Crimes Commission said in December that 40 percent of the country's revenues were still lost to waste and corruption. Industry officials estimate about 100,000 barrels per day, or five percent of total oil output, is stolen by international criminal syndicates with connections to government. Before a major reshuffle in NNPC in 2003, Obasanjo criticised executives for deliberately sabotaging its refineries to benefit from lucrative fuel import contracts. Last year, NNPC fired seven executives after a probe found they had defrauded the country of hundreds of millions of dollars over several years by falsifying shipping documents. No one has been formally charged.

From Reuters South Africa, South Africa, 15 February 2005

Uganda's Economy is Stalling, Says International Monetary Fund

Not Satisfied? IMF's MD Rodrigo de Rato with former finance minister Gerald Ssendaula at a regional summit in Entebbe last year. IMF is not satisfied with Uganda's growth rates. A recent review of Uganda's economy by the International Monetary Fund (IMF) has warned that the country's growth momentum has slowed down and needs to be jump-started. For the third time in as many years, the economy failed to grow by the targeted 7% for various reasons including drought, plummeting commodity prices and rising oil prices. A preliminary report review by the IMF, sees Uganda's economy slowing to 5.5% in 2004/05, compared to 5.9% in the last financial year due to the current drought.

According to the review, IMF's executive directors were concerned that the Government had spent more money than it had planned for and frowned at the Government's lending to private businesses, a reference to financial bailouts to Hassan Basajjabalaba and Apparels Tri-Star. While acknowledging the rapid economic growth over the last two decades, the IMF noted that "the first wave of reforms has tapered off in recent years," before continuing, "Looking forward, the country needs a second wave of reforms to sustain high growth, reduce poverty and decrease aid dependency through balanced and social developments. In this sense, Uganda is at crossroads."

The IMF in a series of preliminary statements by its directors, said the Government would have to focus on increasing domestic revenue, fight corruption and promote private sector growth to boost the economy. But they also noted that "important prerequisites for a successful growth strategy were peace in the north and progress in liminating corruption." They noted that corruption continues to bedevil the Government and "that the political will to forcefully tackle corruption might be fading." "We support the key policies identified by authorities for raising productivity in Uganda. A medium-term framework for pursuing gradual fiscal consolidation, increasing spending on infrastructure, developing the financial sector, improving the business climate, reducing corruption and improving education and training needs to be drawn up," IMF said.

Last year, the Government's intervention to relieve Basajjabalaba of a sh21b debt with commercial banks and the financial aid to Tri-Star were a point of concern for the IMF directors. "Government lending and guarantees to the private sector are particularly troubling. Such practices should be stopped immediately. But recent reports raise concerns," the report said. "Weak budget controls and non-transparent government support of certain companies reinforce perceptions of corruption and send a negative signal to donors and investors." The IMF also lamented the continued low revenue and called for urgent reforms of URA.

From AllAfrica.com, Africa, by Paul Busharizi of New Vision, Kampala, 24 February 2005

World Bank Says Tougher Action Needed to Tackle Corruption

A World Bank mission visiting Liberia has said the country's transitional government must crack down harder on corruption and show greater transparency in its finances if it is to secure donor funding to help the country recover from 14 years of civil war. The mission, led by Shengman Zhang, the World Bank's managing director, also warned that there was no prospect of the World Bank lending more money to Liberia until the country's current loan arrears of almost US$450 million had been paid off. Zhang told reporters on Saturday that the World Bank and other donors wanted to see "more progress and stronger action on the part of the government, to the extent possible, in institution building, governance and anti-corruption (measures)." "We will watch very closely, we will assist as we can, but at the end of the day, we will see whether the country is serious and whether the government is serious to make reforms," he added. Donors have complained repeatedly about endemic corruption at high levels within the Liberian government. Last month, police chief Chris Massaquoi was suspended after he was found to have misappropriated an electricity generator meant for police headquarters in Monrovia for his personal use. But few other abusers of public funds and property have been brought to book.

Jacques Klein, the head of the United Nations Mission in Liberia (UNMIL) and US ambassador John Blaney have repeatedly criticised the broad-based administration led by Chairman Gyude Bryant for failing to crack down on corruption and impose good governance. Bryant's failure to put in place a credible functioning administration has resulted in the continuation of a UN embargo on exports of diamonds and timber. The trade ban was originally imposed to stop Taylor buying arms with the foreign exchange earned by selling these commodities, but it remained in force following his forced resignation over two years ago. Last December, the UN Security Council decided in December to extend the export embargo on diamonds and timber exports for a further six months because the government in Monrovia was not yet capable of exercising proper controls over the logging and mining industries. The cabinet is dominated by representatives of the three armed groups left standing when Liberia's long and bitter civil war finally ended in August 2003. Supporters of former president Charles Taylor now share power with the two rebel groups that fought against him: the Liberians United for Reconciliation and Democracy (LURD) and the Movement for Democracy in Liberia (MODEL).

The World Bank has been at the heart of international efforts to rebuild Liberia's shattered infrastructure and coordinate inflows of foreign aid. It backed a donor conference in New York 12 months ago which pledged US$520 million of aid for reconstruction. And despite the suspension of its own lending to Liberia, the Bank has provided the country with $29 million of grants since then. However, not all the promised international aid to Liberia has materialised. Abou Moussa, the UN Humanitarian Coordinator in Liberia, said only 69 percent of the aid pledges made a year ago had been honoured. "We have received US$ 359 million dollars so far from the donor pledges . [but with] so many crisis in the world today, there is a need to continuously highlight the plight of Liberia to donors so that it can not be forgotten," he stressed. Zhang stressed that donors were unlikely to cough up promised cash unless the Liberian government cleaned up its act. "There have been a lot of promises but none of it is guaranteed unless the government ends corruption, institutional weakness and lack of capacity," he said.

Liberia's Minister of Planning and Economic Affairs, Christian Herbert, promised that the government would heed the Bank's demands, adding "we will play our role as government to meet up with the benchmarks of the World Bank". Bryant announced the establishment of an anti-corruption commission in January. This will be comprised of human rights activists, religious leaders, political party representatives and lawyers, but so far no concrete action has been taken to set it up. A team of experts from the US treasury is currently working with Liberia's financial and revenue generating agencies to seal off corruption holes. Zhang insisted that it was too early for Liberia to push for relief on its $3 billion external debt, despite calls by the government for the entire debt to be written off. "Liberia is in an early stage of recovery. I do not think we have come to the point of debt relief," he said bluntly.

From AllAfrica.com, Africa, by UN Integrated Regional Information Networks, Monrovia, 21 February 2005

South Africa Ethics Debate Spills into International Spotlight

An ethical Search Engine Optimization (SEO) dust-up, which started in the South African media last Friday, has spilled over into the international SEO media. An ethical SEO dust-up, which started in the South African media last Friday, has spilled over into the international SEO media. Cape Town ISP, Tiscali SA is defending itself after issuing a press release touting new, automated SEO services it offers clients under the name, E-Traffic. In the press release, Tiscali states it uses hidden text and doorway pages, with the goal of getting clients' websites, "right in the face of active online consumers."nOne line of the release states, "Doorway pages are created that target specific search engines to improve search engine rankings." Others contain words such as "hidden text", making obvious implications of keyword stuffing, duplicate content and other violations of common search engine Terms of Service agreements.

The language used in the release outraged local SEOs from firms such as Quirk, Incubeta and Seoza, who fear their burgeoning industry will be called into disrepute if a major South African player starts spamming the search engines with SEO practices considered unethical by most of the sector. Tiscali's press statement also raised eyebrows at well known South African search engine Ananzi with company spokeperson Mark Buwalda being quoted as saying, "While we encourage people to add relevant meta tags and titles to their pages in order to get them noticed, manipulation and playing games does not help one's clients."

In it's defense, Tiscali has stated that the term Doorway pages might be misunderstood. What they really meant to say was, "information pages", or "sub-pages". Julie-Anne Doyle, Tiscali's head of consumer products was quoted in the same article saying, "I think perhaps the term 'doorway pages' in the Tiscali context has been misunderstood, and would be better understood if it were called 'sub-pages'. These sub-pages of the Web site are completely and totally part of the Web site, describing the business and products that are being sold in a professional and honourable way, in no way endangering search engine rankings." The controversy generated a lot of discussion in the past few days, so much that Tiscali's parent company, M-Web is thinking about retracting parts of the service. "We're still busy taking product decisions and working out what will stay and what will go," said Russell Dreisenstock, GM of M-Web's South African division.

From WWWCoder.com (press release), PA, by Jim Hedger of StepForth, 23 February 2005

China's New Round Action for Anti-corruption

Since January 2005, China has kicked off a special action against gambling and illegal activities committed by government officials and it will last till this May. With the stern striking and tracing measures implemented by the Chinese government, circumjacent casinos have been closed one after another and Chinese malfeasants ever splurging public money overseas have plunged into a fluster. Experts point out that this is just the beginning of China's new round of anti-corruption action. Why does China's anti-corruption storm spread to the whole world? Experts point out that many corrupt cases of Chinese officials are transnational and cooperation from the international society is necessary for hounding these malfeasants. Recently in New York, USA, many mainland and overseas Chinese throw their eyes once again on an apartment block in the midtown Manhattan.

It is said that there hides a female Chinese malfeasant at large - Yang Xiuzhu. She was once a deputy director of Zhejiang Provincial Department of Construction before running away. Over one month ago, Yang Xiuzhu's illegal money was disclosed, with its amount actually exceeding RMB250 million yuan. People concerning about this apartment block have two doubts in mind: firstly, the anti-corruption storm has got under way but when will Yang Xiuzhu and her suchlike fall into the net of justice? Secondly, when will the "Yang Xiuzhu phenomenon" cease to happen? The two doubts in fact reflect two problems that can't be overlooked in China's anti-corruption war: how to cooperates with relevant countries to capture malfeasants at large, and how to cut off their escaping channels and leave nowhere for malfeasants to hide themselves.

Experts figure that the reason for China's proposal to establish an international cooperation mechanism for anti-corruption is that such a conflict will confront enormous resistance without the cooperation of the international society. Firstly, there is still a group of malfeasants hiding overseas. As early as January 2001, Xinhua News Agency ever reported that there had been over 4000 Chinese suspects of corruption and bribery at large, taking with themselves more than RMB5 billion yuan public money. In addition, according to data from the Ministry of Public Security, there are still over 500 suspects of economic crimes (the majority are malfeasants) at large, with illegal money exceeding RMB70 billion yuan.

Secondly, malfeasants at large hide themselves in every part of the world. In the West, countries like the United States, Canada and Australia are "fairylands" for major malfeasants; countries and regions on good terms with China Taiwan, such as some countries of the Central America and the Pacific island countries, are regarded as shelters by some malfeasants; some subsidiary malfeasants prefer to stay in peripheral countries with lower living costs, like Thailand, Burma, Malaysia, Mongolia and Russia; another group of malfeasants currently hide themselves in countries in Africa, South America and East Europe, waiting for chance to move to "safe places". Thirdly, what encourages most malfeasants to corrupt is the possibility of their transferring money to overseas, and cooperation from foreign countries is therefore necessary if China wants to cut off channels for malfeasants to transfer money. Some scholar calculates that from 1990 to 2000, China's outward capitals in different forms reaches hundreds of billion yuan, of which a considerable portion is state assets appropriated by malfeasants. Once the cooperation mechanism for anti-corruption between China and foreign countries established, the relevant countries can exert strict censorship on capital origins and these malfeasants will definitely betray themselves.

People have noticed that pressures from the international society on Chinese malfeasants at large are also increasing as China frames out its anti-corruption storm. According to relevant personnel from the Ministry of Public Security, China currently hounds and captures malfeasants at large by several means including extradition and Interpol arrest. Among them, with the help of Interpol, a respectable number of malfeasants at large have been sent under escort and repatriated to China. While China is beating hard at corruption, some Chinese youngsters are seen to drive limousines as usual in the streets of some city in the southwest of Canada. Many local citizens are aware that some of them are children of some Chinese officials. They also hear that not long ago, a youngster whose father has been arrested for corruption, returned to China because he has lost his financial sources. In narrating this story, a correspondent of some local Chinese media said that from now on, there will be less and less shelters for Chinese malfeasants outside China.

From China Economic Net, China, 2 February 2005

Free Trade, Corruption to Top APEC Agenda

Free trade and the fight against corruption are among the priorities for the APEC meeting in November. Other priorities announced Tuesday are sharing prosperity from the knowledge-based economy, human security, promoting greater participation of small businesses and women, APEC reform, and promoting cross-cultural communication. The government said it settled on these seven issues after discussion with the organization's 21 member countries since last year's Santiago summit. Korea, which holds the rotating chairmanship of the organization this year, is in charge of preparing the APEC meeting, which includes selecting the themes. A Foreign Affairs Ministry official said that in this year's meeting, member countries would also convey a message for the success of negotiations for the Doha Development Agenda of the World Trade Organization, which will take place in Hong Kong immediately after the APEC meeting. As part of efforts to fight corruption and promote cross-cultural communication, the government plans to hold an APEC anti-corruption symposium in Seoul in September and a special film festival related to APEC on the sidelines of the Busan Film Festival in October.

From Chosun Ilbo, South Korea, 2 February 2005

Malaysia Police Offered Cash to Reject Bribes

Kuala Lumpur - A Malaysian state is fighting fire with fire in the battle against corruption, offering police a cash reward if they reject a bribe. The reward will be equal to twice the bribe, Pahang state's police chief was quoted as saying by the New Straits Times on Wednesday. Police in the central Malaysian state must also arrest the person who offered the bribe to be eligible for the reward. Prime Minister Abdullah Ahmad Badawi is leading a campaign against corruption, which has tarnished Malaysia's image in the eyes of foreign investors. Bribes are sometimes used to cut through red tape and persuade poorly paid police to look the other way. "For instance, if a policeman arrests someone offering him 50 ringgit ($13) we will reward him with 100 ringgit," Pahang police chief Ramli Yusoff said, adding that the "double reward" policy only applied for bribes under 200 ringgit. Rewards for turning down larger bribes would be decided on a case-by-case basis.
"I will personally hand over the reward to the personnel concerned," Ramli said.

From Reuters India, India, 1 February 2005

Brunei Films Anti-Corruption Drama

Bandar Seri Begawan - In an effort to raise awareness and educate the public on the negative impact of corruption on the stability and economic growth of the country, the Anti Corruption Bureau (ACB) is currently filming a series of 13 drama serials to be screened on national television. The drama, entitled Kod 486, stars Malaysian actors, Zamarulhisham and Umie Aida and is directed by Malaysian, Syed Idris bin Nordin, who is famed for his detective serials. Datin Paduka Hjh Intan Hj Kassim, Director of ACB, and Pg Dato Paduka Hj Ismail Pg Hi Mohamed, Director of Radio Television Brunei (RTB), are the executive producers. Abang Hj Kiprawi, ACB Senior Assistant Director, Abang Hj Abu Hanifah, OKPSD, are the producers while Hi Abd Raub Hj Yassin is the project manager and Linda Abdullah, production manager. Abang Hj Kiprawi said part of ACB's community services is holding lectures and organising seminars to educate the public on the impact of corruption. "We felt that lectures and seminars have a limited audience and we could not reach the mass public, especially the young generation.

"Therefore we thought the messages on the scourge of corruption can be delivered through drama serials, which are more appealing to youths," he said. He said the serials were one way to educate the community in a positive and productive way. "Our previous short drama serials in Tabir II and Insaf received accolades from the public so we decided to produce another serial with greater mass appeal by recruiting famous Malaysian artistes to act for us," he said. He said the serials are based on true stories taken from court cases. He added that this latest effort was in line with the resolution pledged at the United Nations Convention on Anti-Corruption. "The public should realise we are not only investigating cases of corruption but also creating awareness for those who cannot differentiate between corruptible acts and charity," he said. He said such drama serials have been filmed and shown in Hong Kong utilising famous Kung Fu actors such as Ti Lung.
He also expressed gratitude to Brunei Shell Petroleum Company Sdn Bhd and Brunei LNG Sdn Bhd for their contribution including funds for making the serials.

From Bru Direct, Brunei Darussalam, by Rosli Abidin Yahya, 3 February 2005

Philippines to Punish Officials with Banking Account in US

Manila - Philippine official anti-corruption body, the Presidential Anti-Graft Commission (PAGC), has launched a campaign to identify government officials who have dollar accounts in the United States, PAGC chairwoman Merceditas Gutierrez said Thursday. Gutierrez, who is also serving as legal counsel of President Gloria Macapagal Arroyo, said the Philippines has an existing treaty with the United States that allows it to get data from American authorities on Philippine officials' dollar accounts. "We have an existing treaty with the United States that allows the Philippines to get assistance from America because some of our officials go there and deposit their money. Under the treaty,we can ask for assistance so that we would know which banks received deposits from our officials," she said in an interview with DZMM radio station. She said the PAGC is coordinating with the Office of the Ombudsman and other anti-corruption bodies in government looking for corruption cases against high-profile officials.

From Xinhua, China, 3 February 2005

More firms Join Anti-graft Drive

Customs officials yesterday signed up 84 more companies to its anti-corruption drive, bringing the total number of participants to 293. The companies each pledge to not offer bribes to customs officials to facilitate clearance procedures, and is part of the Customs Department's ongoing battle against corruption at the agency. But despite the campaign, initiatives to improve internal controls and even the installation of closed-circuit cameras to monitor officials, bribery and corruption continues at clearance points. One auto spare parts exporter said corruption remained "a way of life"' to expedite shipments, most notably at Laem Chabang Port, the country's largest port. Even at yesterday's signing ceremony, companies signing up for the anti-corruption initiative insisted that while welcome, the programme was unlikely to lead to major changes any time soon.

Sathit Limpongpan, the customs director-general, said he was willing to investigate any state officials suspected of receiving bribes, and asked the public for co-operation in identifying offenders. Bribery was a crime not only for the state officials receiving graft, but for the parties that offered it as well, he said. Other businessmen said that while under-the-table payments continued at many customs points, recent initiatives to reduce the discretion of state officials had done much to cut the potential channels for bribes. Reductions in tariff rates and efforts to accelerate the clearance process through information technology had eliminated over 90% of the opportunities for officials to request bribes, one importer said. The Customs Department late last year pledged to implement a one-day clearance policy for imports and exports, cutting the time for officials to review shipments to just 90 minutes each. The policy, launched with other state agencies, is part of a national initiative to reduce the country's logistics costs.

From Bangkok Post, Thailand, by Wichit Chantanusornsiri, 4 February 2005

New Nepal Government Pledges Crackdown on Corruption as Maoists Threaten Blockade

Kathmandu - Nepal's new government has vowed to crack down on corruption and poverty, state media reported, as Maoist rebels warned they would bring the country to a halt if King Gyanendra did not reverse his power grab. A cabinet meeting chaired by the king adopted a 21-point socio-economic programme focused on creating jobs, ending nepotism and corruption, and spurring economic growth, state-run radio announced. "Property amassed through abuse of authority, smuggling, tax evasion, illegal contract and commission will be seized and nationalized," it said, announcing the decisions of the cabinet. Gyanendra on Tuesday fired the government led by Prime Minister Sher Bahadur Deuba for failing to organize elections or quell the insurgency by Maoists, who want to topple the monarchy and install a communist republic. He also named a loyalist cabinet under his "chairmanship", declared a state of emergency and pledged to restore multi-party democracy in three years.

State-run English daily "The Rising Nepal" Saturday outlined other populist measures the new government planned to take in what analysts say is an attempt by the king to win support for his actions from Nepalis fed up with greedy and squabbling politicians. The government would give more powers to village councils, dole out property to the landless, modernize farming, create jobs, develop tourism and provide free education to a percentage of needy students, it said. A senior minister, meanwhile, said multi-party democracy would only be restored and elections held once Maoist rebels were defeated. Foreign Minister Ramesh Nath Pandey told AFP that until the Maoist insurgency was halted, "multi-party democracy cannot come back on track." "We have learnt the lessons after paying a heavy price that without restoring peace and security, we cannot hold elections," he said. Maoist guerrilla leader Prachanda hit back in a statement received by AFP in New Delhi Saturday, warning that unless the king reversed his actions, the rebels would enforce an indefinite countrywide blockade from February 13. Prachanda urged citizens to stock up with vital provisions and come out "in strong resistance" to what he said was "Nazi-style repression" by the king's forces. "Our party challenges Gyanendra ... to withdraw his retrogressive steps immediately," his statement said. "If he fails to withdraw ... our party will be compelled to come out for countrywide blockade and traffic strike for uncertain time, from 13 February," it said.

In December, Maoist rebels enforced a week-long transport blockade that virtually cut off overland routes into the country's capital for a week, severely disrupting food and fuel supplies to the Kathmandu valley. A similar blockade in August spread fear among inhabitants and sent prices of essential items rocketing. The Maoist conflict has claimed more than 11,000 lives since it began eight years ago. War-weary, ordinary Nepalese interviewed in the capital Kathmandu said that if they had to choose between peace and democracy, for which many have been pressing, they would choose peace. "The population has been victimised, people are less concerned with politics. They want first peace should prevail," said a pro-monarchy analyst. "All the governments have collapsed, all the parties quarrel, corruption has become institutionalised," said an official with a human rights group. "Nepalese cannot believe in democracy," he said. All public phone lines, mobile services and the Internet have been cut in a bid by the king to stifle dissent and prevent protests. The media is also operating under strict censorship. In their first public reaction, meanwhile, Nepal's political parties Saturday denounced Gyanendra's sacking of the government as "undemocratic and unconstitutional".

From Turkish Press, Turkey, by Emmanuel Dunand, 5 February 2005

World Bank Warns Cambodia on Corruption

Cambodia was on Friday warned by the World Bank that its economic future hinges on stamping out the flagrant corruption that has undermined the country's business prospects since the end of the Khmer Rouge era. James Wolfenson, president of the Bank, said Phnom Penh's top three tasks to promote economic development - essential to generate jobs for the youthful population - are "fighting corruption, fighting corruption, and fighting corruption." "This is Cambodia's problem... if you do not move no one will cry over Cambodia," Mr Wolfenson told the first-ever investment conference in a country scarred by three decades of civil war. "If you do not become a credible competitor, it will be because of Cambodians, not because of the international community." Prime Minister Hun Sen, the long ruling strongman, re-affirmed that he intended to cut the excessive red tape, and improve the country's governance to make Cambodia an attractive investment destination. But Mr Hun Sen, who has made similar sweeping declarations before, has so far taken little convincing action to tackle the deeply entrenched culture of official corruption by poorly paid civil servants, who have come to depend on shake-downs of business to supplement their meager official wages.

Mr Wolfenson's warning comes at a pivotal moment for Cambodia. Its economy has grown by an average of 6 to 7 per cent a year in recent years, thanks in part to growing foreign tourist arrivals, but also due to a surge in garment exports to the United States. But the end of the global garment quota system in 2004 has threatened Cambodia's nearly $2bn in foreign garment sales, which accounts for nearly 80 per cent of its' total exports. Free trade in textiles allows buyers to source freely from the lowest cost, or most attractive, production locations namely China - a shift likely to take place gradually in the coming years. Cambodia's garment factories have opened themselves to intense scrutiny in a bid to promote themselves as a haven of fair labour standards and 'safe' production for image sensitive global brands. But bribes, pay-offs and "facilitation fees" are estimated to add around 10 to 15 per cent to the costs of garment exports. Both the World Bank and the IMF have projected that economic growth will slow to between 1.9 and 2.4 per cent a year as a result of the slowdown in the garment trade, following the end of the textile trade pact. Foreign investment has plunged from around $250m in 1998 to around $50m in 2002. In a World Bank survey last year of 800 businesses operating in the country, 75 per cent identified corruption as their biggest operational constraint.

The leadership conference took place against the backdrop of a political crisis that has seen outspoken Sam Rainsy, Cambodia's opposition leader, and one of his deputies, flee into exile after their parliamentary immunity was removed. Another opposition MP, who also lost his immunity, has been arrested as part of a crackdown that US senators has described as an attempt to crush Cambodia's democratic opposition.

From Financial Times, UK, by Amy Kazmin, 11 February 2005

Nepal King Constitutes Anti-corruption Commission

Kathmandu - Nepal's King Gyanendra on Thursday announced the formation of a six-member anti-corruption commission equipped with powers to control graft, investigate and jail corrupt politicians and bureaucrats. According to a statement issued by the royal palace, Bhakta Bahadur Koirala, a former bureaucrat would be the head of the commission that would be granted authority equivalent to the nation's courts. "The commission can investigate and take action against any person on the basis of complaints or information received from any source in connection with smuggling or tax evasion, involvement in the dealing of illegal contracts and other actions defined as corruption by the existing laws," the notice said. The commission has been granted the power to take action in contempt cases also and it can sentence anyone guilty of contempt of Commission to six months in prison or a fine of up to 10000 rupees or both. It can also confiscate the property of the individual earned through the means considered as corruption in accordance with the prevalent laws.

The move follows a series of measures put in place since February 1, when King Gyanendra sacked the Sher Bahadur Deuba government, imposed emergency and press censorship and suspended civil liberties in the Himalayan kingdom. The king said the measures were needed to check the rising Maoist insurgency, that has claimed more than 10,500 lives since 1996, and to bring political stability to the country. Nepal is locked in a bitter three-way struggle between the king, political parties and Maoist rebels. The king is often accused of overstepping his powers and this is the second time he has assumed power in three years. This is the fourth time the king has sacked a prime minister in less than three years. Nepal has had no parliament since 2002. Nepalese people have greeted the news of the anti-corruption commission with cautious optimism. Many politicians in successive governments in recent years have been charged for being involved in graft and bribery, with several of them being forced to resign amidst controversy. The opposition parties have planned to protest on streets against the royal coup on Friday, which is also the Democracy Day in Nepal. Arjun Narsingh, an important opposition leader was detained on Wednesday shortly after he announced launching of the agitation by major political parties.

From New Kerala, India, 17 February 2005

China Confronts Cadre Corruption

Beijing - China's Communist Party leaders are prepared to crack down on corruption and the abuse of power among party officials, state media said Wednesday. Wu Guanzheng, secretary of the party's Central Commission for Discipline Inspection, said an anti-graft campaign would target cadres violating rules on personnel and legal matters, plus those responsible for issuing licenses and making decisions concerning construction, finance, land management and government procurement. "Officials who use public resources for the private businesses of their spouses or children should resign, or be forced to resign. They will receive disciplinary penalties afterwards," Wu said in a report to the commission. "Resignation also applies to officials who are involved in gambling, with more severe punishments imposed on those who gamble in overseas casinos," he warned. On the issue of corruption Wu said party cadres found taking, or giving, bribes in the form of cash, securities or other types of payment would be removed from their posts, followed by further punishment, Xinhua news agency reported.

From New Kerala, India.7 February 2005

Government to Strengthen Anti-corruption Drive

Premier Wen Jiabao said yesterday in Beijing that the central government will strengthen anti-corruption efforts this year to build a cleaner government. He made the remarks at the third national working conference on building a clean government, which was hosted by the State Council. The working emphasis will focus on eight sectors this year, according to Wen, including the reform of government decision-making mechanisms. The big government-related decisions must be made in "scientific and democratic ways" and experts must be invited to offer advice. The purpose is to prevent government officials from abusing power. The supervision on government investment must be perfected, according to Wen, who added that all government investment must be made public and public bidding be invited. He also emphasized increasing monitoring on State-owned assets and the lease of lands, which is the major channel for officials taking illegal money. In another development, the ruling Communist Party of China (CPC) said it had disciplined 164,831 Party officials, including 15 at ministerial level in the year 2004, in an effort to stamp out corruption. Wu Guanzheng, secretary of the CPC Central Commission for Discipline Inspection, the Party's watchdog, made the remarks in his report to the commission's fifth plenary session. The report was published on Tuesday.

From China Daily, China, by Guo Nei of China Daily, 17 February 2005

Survey Indicates High Corruption Level

The OSCE intends to assist Azerbaijan in fighting corruption, head of the OSCE office in Baku Mauricio Pavesi told a roundtable, "Government agencies combating corruption", on Friday. Pavesi said that OSCE will help Azerbaijan improve its legislation in this area. In a recent survey conducted by the OSCE office in Baku among over a thousand people, 87% of respondents indicated the high corruption level in Azerbaijan. Over 59% of the respondents said that they and their family members faced bribery and half of them said that corruption negatively affects public administration. The respondents mainly indicated corruption in health and the law-enforcement, the OSCE representative said.

Pavesi noted that the survey also showed that the country's citizens are not actively involved in anti-corruption activities. He welcomed the establishment of the legal framework in the country to fight corruption. Pavesi said that the respondents' opinions are based on what they witnessed but not on any press reports. He added that one of the alarming facts is that more than half of the respondents are not aware that the country has adopted the anti-corruption law. Speaking at the event, the legal counselor for the US embassy in Azerbaijan Bass Srinan said that the draft law on fighting money laundering has been developed and submitted to the government of Azerbaijan.

It will be put on discussion at the country's parliament shortly, he added. A US Justice Department official Paul Bueran said that the anti-corruption measures would be inefficient unless the mentioned law passes. Parliament member Alimammad Nuriyev criticized the current make-up of the anti-corruption bodies. He said that the anti-corruption activities will not be efficient, as long as such bodies depend on the executive power. Nuriyev proposed to set up an independent agency dealing with the problem, pointing out the relevant international experience. He questioned the independence of the anti-corruption department under the Prosecutor General.

From AzerNews, Azerbaijan, 24 February 2005

GMA Signs UN Anti-corruption Accord

PP committed to declare corrupt practices as major crimes - Arroyo leads people power against graft - President Gloria Macapagal Arroyo (GMA) formally signed the United Nations (UN) Convention Against Corruption that would compel the Philippine government to declare all corrupt practices as major crimes during yesterday's 19th anniversary celebration of the EDSA People Power. Leading this year's rites with the theme "People Power Against Corruption" at the People Power 1 Monument in Quezon City, the President affirmed the government's commitment to the UN declaration, pending the Senate's concurrence. The UN declaration, adopted by the US General Assembly on Oct. 31, 2003, urges ignatory-countries to enact measures that would qualify a wide range of corrupt practices as major crimes, if they're not yet declared as such under existing domestic laws. It also requires signatory-governments to undertake measures to support the freezing, tracing, seizure and confiscation of the proceeds of corruption. The commitments of support and cooperation between the Coalition Against Corruption and seven government agencies was also signed and witnessed by the Arroyo and former presidents Corazon Aquino and Fidel Ramos, also known EDSA key players.

The multi-sectoral agreement signed by private and government coalition partners provides the framework in the implementation of government's campaign against corruption, institutionalizing people's participation in government's anti-corruption monitoring program. After leading the flag-raising ceremony in the morning, the President proceeded to the People Power Monument 1 to unveil the statue of former Sen. Benigno "Ninoy" Aquino Jr. whose assassination led to the 1986 popular revolt that ended the 20-year dictatorial rule. Arroyo called on the Filipinos to join her in the new kind of "revolution against corruption" as she vowed to use all powers within her hand to eradicate corruption in government and private sectors. In a related development, Press Secretary Ignacio Bunye announced that five persons now facing corruption charges will be slapped with forfeiture proceedings against alleged ill-gotten wealth within the next two weeks. Transparency International, a global anti-corruption coalition, has reported that the country is ranked third in Asia where corruption is rampant, losing some $48 billion or P2.6 trillion to corrupt practices in government over the past 20 years. The Philippines is likewise ranked 11th most corrupt in the world, sharing the spot with Pakistan, Romania and Zambia.

Don't take freedom lightly - Drilon - Senate President Franklin Drilon yesterday reminded Filipinos not to take their freedom for granted as citizens of other countries would make extreme sacrifices just to have their own freedom. As the nation commemorated EDSA 1, Drilon said the fact that he is now talking freely and enjoying all the liberties, particularly freedom of speech, "shows that freedom is very important and that we should not take it for granted." "The fact that we are an egalitarian society with the freedom of the press is something that other countries to this day will die to have. But we take it for granted. "It is only when we are deprived of this basic freedom that we long for it." Drilon noted that "we saw in EDSA Dos (2) a very split society. In Congress, it was a terrible situation after the impeachment trial in 2001. I presided over a very divided Senate. Now, we are able to bring it back to normalcy." Drilon gave up his Senate presidency in late 2000 after siding with the House of Representatives which initiated the impeachment proceeding against then President Joseph Estrada. The Senate presidency was handed over to now Senate Minority Leader Aquilino Pimentel Jr. The former President's wife, Loi Ejercito-Estrada, and son, Jinggoy are now colleagues of Drilon, Pimentel and Sen. Joker Arroyo, a former Makati congressman who was one of the House members who served as prosecutors in the impeachment trial. "I am not giving up. We just keep on pushing that we achieve that unity that we saw in our people in 1986," Drilon said. (Mario B. Casayuran)

EDSA is in our daily lives - Atienza - Manila Mayor Lito Atienza yesterday said the issue over the attendance at the yearly EDSA rites overlooks a more essential message - that the EDSA spirit should not be celebrated only once a year. "EDSA should be part of our day-to-day service. Our way of governance should always reflect its true spirit, and revolutionary fervor must be kept alive in our daily functions in government," he stressed in a message marking the 19th anniversary of the 1986 People Power Revolt against the Marcos dictatorship. Atienza, who had openly criticized Martial Law and was one of the few opposition members of parliament in the Batasan Pambansa, added that while the victory at EDSA afforded the Filipinos the new air of freedom, it should not be regarded as the end of the struggle. "We should always be inspired by people empowerment and democracy that were accomplished by EDSA."

Atienza, who was jailed twice during Martial Law, recalled the plenary sessions at the Batasan Pambansa when the votes for the snap election were being canvassed. He and other fellow opposition members questioned and scrutinized almost every certificate of canvas that was presented because it was obvious there was a blatant attempt to rig the results in favor of Marcos. He said they even walked out in protest of the parliament's declaration that Marcos won the February 1986 snap elections. "But we were certain (when we walked out) that we were on our way to a newly-liberated society." However, he lamented that some of those who fought the dictatorship died before the EDSA Revolt could take place, singling out former Antique Gov. Evelio Javier who was assassinated a few days after the snap elections. Last year, Atienza asked Manilans to emulate the example of Javier in the unveiling of a bronze statue of the late democracy fighter at the Roxas Blvd. Baywalk. It depicts Javier sitting on a park bench situated beside the statue of Ninoy Aquino, which was unveiled in 2003, gesturing towards Manila Bay.

Pimentel urges GMA to punish grafters in Cabinet - Senate Minority Leader Aquilino Pimentel Jr. yesterday challenged President Arroyo to make good on her vow to intensify the campaign against graft and confiscate tainted wealth by going after key officials of her administration linked to corruption scandals before judicial bodies. Pimentel said the President should erase the perception that her administration is pursuing a selective crackdown on grafters by being soft on officials who are close with her. "She should start the anti-graft drive with people around her, including members of the Cabinet. Immediately that would make her credible." He said the kid's glove treatment of certain grafters in her Cabinet is a graphic illustration that certain mischievous government executives are being coddled by Malacanang in total disregard of its much-ballyhooed pronouncement that there should be no sacred cows in the campaign. Pimentel said a check with the records of the Office of the Ombudsman revealed there are several Cabinet members who are facing a string of cases for violation of the Anti-Graft and Corrupt Practices Act and Code of Ethical Standards for Public Officials and Employees. He said the respondents have not been cleared of the charges because of the gravity of the alleged offenses. He said these pending graft charges are among the reasons why certain Cabinet members have been repeatedly bypassed by the Commission on Appointments. On the President's threat to cause the confiscation of the ill-gotten wealth of grafters even before they are convicted by the courts, Pimentel said: "As usual, she is talking through her hat. And the proof of the pudding is in the eating."

Kasangga calls for end to violence - The Kasangga Foundation, during yesterday's celebration of the anniversary of the EDSA 1, called for an end to violence in the country so that business and development programs can proceed. "Peace and security must prevail in this land for business to go on briskly and give stability to our economy," Alven Kabatic, Kasangga Foundation trustee, said. Elnora Suaybaguio, educator and businesswoman who heads Kasangga's district chapter in Davao del Norte, said a more fruitful dialogue between government and MILF negotiators must proceed in pursuit of peace for the Mindanao region. "Mindanao plays an important role in the nation's economic activity which must be accelerated for the country's faster recovery and stability."

Honest trike driver commended - President Gloria Macapagal Arroyo and Transportation Assistant Secretary and Land Transportation Office (LTO) chief Anneli Lontoc awarded a "Perpetual Driver's License" to tricycle driver Darwin Calvario of Gen. Santos City. The awarding rites were held at the People Power Monument in EDSA during yesterday's People Power 1 celebration. "Mr. Darwin Calvario is a tricycle driver from Gen. Santos City who chose to return a bag containing checks worth P270,000 and P26,000 in cash which he found in the backseat of his tricycle, and though he could have used it for a badly needed operation of his son who suffers from imporforate anus (no anal opening), said Lontoc in a brief interview.

From Manila Bulletin, Philippines, by Ferdie J. Maglalang, 25 February 2005

Swiss Urged to Step up Fight against Corruption

The Swiss could do more to fight corruption, says the OECD. Switzerland needs to increase efforts to combat bribery and to encourage "whistleblowing", according to a report published on Tuesday. The study by the Organisation for Economic Cooperation and Development (OECD) claims small companies and civil servants lack awareness of anti-corruption rules. The team of experts that compiled the report also criticised the Federal Prosecutor's Office for being slow in bringing cases of corruption to justice. But there were top marks for measures taken to prevent bribery, as well as praise for the "exemplary" stance adopted by Swiss multinationals.

Jean-Daniel Gerber, state secretary for economic affairs, said Switzerland had fared better than some of the 14 nations already audited by the international body."Compared with many other countries, Switzerland is among the leaders when it comes to fighting bribery," said Gerber on Tuesday. Mark Pieth, a Basel University law professor who leads the OECD working group on corruption, placed Switzerland in the same boat as France and Germany. "These states can all be criticised, but there is nothing fundamentally wrong about the way they deal with bribery of foreign public officials," he told swissinfo. According to Pieth, Britain and Luxembourg were found wanting, while Japan refused to be evaluated.

Could do better - The audit examined Switzerland's potential to prevent, pursue and prosecute cases of bribery involving foreign officials abroad. "The OECD has noted that officials in the cantons, towns and villages of Switzerland are still not aware of the potential for bribery," said Gerber, who admitted that there was still room for improvement. The working group said Swiss civil servants should be obliged to denounce cases of corruption. The OECD added that more attention should be paid to anonymous tip-offs and better protection given to whistleblowers. "Today, we can only act after a crime has been committed," said Philippe Levy, president of anti-corruption watchdog, Transparency Switzerland. "To fight bribery, we need preventive measures, such as protecting whistleblowers." Small and medium-sized businesses working abroad could also do more to fight corruption, said the report. It noted that while major companies had taken steps to tackle illegal payments, their smaller counterparts needed to be made more aware of corruption-related issues.

Greater transparency - Other measures suggested by the working group included improved presentation of company accounts and greater use of independent auditors. The OECD recommended that Swiss firms implicated in bribery cases should be excluded from public tenders and refused government export guarantees. The report also urged the Swiss authorities to speed up the processing of requests for international judicial assistance in cases involving corrupt foreign officials. It cited the Federal Prosecutor's Office as one of the weak links in the Swiss legal system. "Out of 12 corruption cases we have handled since last year, only two have been through the courts, and just one led to a conviction," admitted Marc-André Fels, spokesman for the federal prosecutor. Swiss officials said they would now go away and analyse the OECD's findings before proposing any new measures. "Corruption is an issue in every country, Switzerland included," Gerber told swissinfo. "That's why we must fight it with every means at our disposal."

From Swissinfo, Switzerland, 1 February 2005

Commission Promotes Open Discussion on Research Ethics

In Short: In a meeting of research ethics committees from across Europe, EU politicians emphasised the importance of scientific freedom and called for tolerant dialogue on ethics in research.

Brief News: A conference entitled 'Research ethics committees in Europe: facing the future together' took place in Brussels on 27-28 January 2005. An initiative of the Commission, it brought together representatives of local and regional ethics committees in Europe to promote pan-European dialogue, better awareness-raising and understanding between researchers and regulators on matters of ethics. In the opening session of the conference, the Science and Research Commissioner Janez Potocnik said that "ethics does not oppose science", and called on the research ethics committees to discuss ethics in research in a "friendly spirit of tolerance". "It is difficult to be creative without freedom. Therefore, there should not be any limits for science," commented Pia Elda Locatelli, member of the European Parliament and rapporteur of the Parliament's contribution to the future of Eurpean research (FP7). She also underlined that there is a "profound necessity to talk and understand each other". According to Rainer Gerhold, Director of the Science & Society division in the Commission, the Brussels conference was a practical answer to a "bottom-up request", and the subjects (the role of research ethics committees, quality assurance, training etc.) had been planned by the researchers and the speakers themselves.

From Euractiv, Belgium, 2 February 2005

Bulgaria's Business Starts Anti-Corruption Crusade

Hundreds of Bulgarians companies have signed a common declaration against corruption, and sent it to the Prime Minister and all other Cabinet members. The document suggests eleven specific steps that would enhance the fight against corruption. The implementation of the e-government project, the set up of an anti-corruption state body with the Council of Ministers, and special education programmes for the officials are among the measures recommended by the 400 companies - members of the Bulgarian Business Leaders Forum (BBLF), the Bulgarian International Business Association (BIBA) and the Bulgarian Convention and Visitors Bureau (BCVB). "Two years before EU entry, the fight against corruption needs to be our most urgent effort," BBLF Chairman Maxim Behar said. "I expect the government to take interest in the declaration, and invite us for a discussion on what we could do together to fight the problem," Mr Behar explained. The Bulgarian business elite pledged to assist the government's efforts in every possible way. Bulgaria has been ranked at 54th place of corruption practices among 140 countries globally researched by the corruption watchdog Transparency International this year. The survey, however, highlights on the corruption sensitive areas in Bulgaria, including customs administration, the judiciary and political parties.

From Sofia News Agency, Bulgaria, 24 February 2005

Graft, Red Tape Hurting Arab Economies

Dubai - To win more foreign investment Arab countries must tackle corruption and red tape, reform weak legal system and cut high business costs, OECD and World Bank representatives said yesterday. "A lack of a private sector in the economy, a lack of effectiveness in government, and corruption" were the main obstacles to foreign direct investment in Arab countries, said Shuichiro Megata, a Japanese representative to the OECD. Weak foreign and domestic investment in Arab states was a "conundrum" for economists, John Speakman, a Middle East specialist at the World Bank, told a conference in Dubai. "There is tonnes and tonnes of investment capital just dying to invest in the Arab world, but there is very little investment," Speakman said, pointing to about $1 trillion of Arab investments abroad. "If I am an investor, I will not invest if a contract I am relying on cannot be enforced. The Middle East has an incredibly poor track record on contract enforcement," Speakman added.

World Bank figures show that resolving contract disputes in the region requires, on average, 38 bureaucratic procedures, higher than for any other area. Corruption is particularly rife concerning contracts for major government infrastructure projects, one senior conference delegate told Reuters, on condition of anonymity. Poorer Arab countries like Syria and Egypt were more prone to corruption than Gulf Arab states, analysts said. Speakman said investors also complain about weak corporate governance, unreliable government information, inconsistent regulation and the prohibitive cost of setting up a business. The minimum capital required to set up a business in the region is about 10 times the gross national per capita income, the highest in the world and almost 20 times higher than developed countries, World Bank figures show. The conference was organised by the Organisation of Economic Cooperation and Development, an economic think tank of the world's top 30 industrialised nations. It was co-hosted by the Dubai Development and Investment Authority, a government agency that aims to attract investment. Salem bin Dasmal, a senior Dubai official, said Arab governments must remove barriers to investment if they are to tackle mounting unemployment. "The lagging pace of economic growth, behind population growth is the most urgent challenge" facing the region, said bin Dasmal.

From Khaleej Times, United Arab Emirates (Reuters), 2 February 2005

Feds Cast Corporate Dragnet Abroad

Stepped up scrutiny triggers self-audits, ethics reviews - San Francisco - A spate of recent cases shows newfound federal enthusiasm for cracking down on corporate misbehavior overseas, forcing companies to scour their operations for anything that smacks of bribery or shady bookkeeping. Sarbanes-Oxley and new federal sentencing guidelines are credited for fueling the pickup in the pace of bribery probes under the Foreign Corrupt Practices Act. With the threat of hefty fines, lengthy investigations and lost business, companies are investing more in due diligence and business ethics, creating a hot business trend as international mergers and acquisitions arena gather steam. "Global clients are very preoccupied about amorphous, increasingly dangerous risk, and FCPA has to be in that category," said Charles Grice, director of anti-money laundering and financial services at Kroll, a leading risk consulting firm. "We're getting a lot of calls from people who are wondering if they have FCPA exposure," he said. The Foreign Corrupt Practices Act makes it illegal for any publicly traded or private companies to bribe any foreign official to obtain or retain business. Grice said he's noticed an uptick in calls from "extremely nervous" clients, about 60 percent of them from international offices of European firms with extensive overseas operations.

Two major FCPA cases cropped up on the merger front last year. Lockheed Martin (LMT: news, chart, profile) ended its plan to purchase Titan Corp. (TTN: news, chart, profile) for $1.66 billion after Titan failed to finish its investigation into alleged bribery of Middle East and African officials to secure overseas contracts. Titan has tentatively agreed to plead guilty to criminal charges and pay a fine of less than $30 million to resolve the probe, according to a recent Wall Street Journal report, which also said Titan declined to comment on the proposed deal. And General Electric (GE: news, chart, profile) unit G.E. Infrastructure's $900 million purchase of InVision Technologies (INVN: news, chart, profile) was almost derailed after InVision said that it was investigating alleged violations by its distributors. The deal closed in December after InVision struck an $800,000 non-prosecution settlement with the Justice Department. "No company wants to buy itself a bribery problem anymore," said Alexandra Wrage, president of Trace International, a Washington D.C.-based nonprofit that helps companies with FCPA compliance issues. "They don't want to buy the bottomless pit of liabilities that briberies create."

The U.S. Securities and Exchange Commission has added more bribery investigations to its investigative portfolio, according SEC associate director of enforcement Paul Berger in an article on CFO.com. The agency also added 20 percent more staff last year to 1,200 to work in its prevention and suppression of fraud program, according to SEC spokesman John Heine. The U.S. Department of Justice has prosecuted 39 criminal cases since the FCPA was passed in 1977, according to a State Department report published in September. Defense companies, of course, aren't the only ones to face government scrutiny. Earlier this month, agrichemical giant Monsanto (MON: news, chart, profile) said it would pay an SEC fine of $500,000 and a $1 million penalty under a deferred prosecution deal with the DOJ relating to improper payments and financial irregularities in connection with its Indonesian affiliates. In June, pharmaceutical company Schering-Plough (SGP: news, chart, profile) settled an SEC investigation for $500,000 that its subsidiary in Poland made improper contributions to a charitable organization. The SEC said the company violated the FCPA bookkeeping provisions by not accurately recording the payments. The SEC is still mulling whether to sue three ex-Lucent Technologies (LU: news, chart, profile) executives, including former CEO Richard McGinn, over alleged FCPA violations. Germany's DaimlerChrysler (DCX: news, chart, profile) has said the SEC is probing allegations made by a former employee that the company has used secret bank accounts to bribe foreign government officials.

Seeking shelter under self-reporting - One factor driving the increase in FCPA investigations is stricter U.S. Sentencing Commission rules that went into effect in November for setting up compliance and ethics programs, which the commission called "essential for organizations seeking to mitigate its punishment for a criminal offense." Compliance experts say the guidelines and the Sarbanes-Oxley Act of 2002-the corporate reform law aimed at fighting fraud in part by requiring CEOs, CFOs and auditors to sign off on financial reports-have increased voluntarily disclosures by companies of their suspicions or findings of illegal transactions, in a bid to avoid the full weight of legal remedies available to the DOJ and the SEC. The sentencing rules include making boards of directors and executives responsible for oversight of training programs. The FCPA, like other regulatory agencies, also requires public companies to create internal accounting controls to ensure properly authorized transactions. "Self reporting buys you tremendous latitude and flexibility from the United States government," said Grice. "The benefit of self-reporting or self-disclosure is as much as 95 percent of the potential penalty that can be applied to against a corporation for FCPA violations." The G.E. Infrastructure/ InVision Technologies case "is a good example of the benefits a company gets from self-reporting," said Thomas Patton, a defense attorney and partner at Tighe Patton Armstrong Teasdale in Washington, D.C. But self-reporting certainly isn't a cure-all. Consider the case of Swiss-Swedish engineering company of ABB Ltd. (ABB: news, chart, profile) . It notified the government about FCPA violations and in July, ABB and two of its subsidiaries paid $16.4 million in fines to settle U.S. criminal and civil charges that they bribed government officials Nigerian, Angolan and Kazakhstan.

Taking action through training - Calls from clients seeking online, corporate compliance training programs are "definitely on the rise" said David Simon, who runs privately held WeComply in Mount Kisco, N.Y. "There's an electronic paper trail that's very valuable in the event the company gets in some trouble," said Simon of the programs. "They can point to that and say 'There were problems, but we did our best to prevent them and detect them when they occurred.'" At Core Laboratories (CLB: news, chart, profile) , FCPA training is primarily done with a DVD and an instructor, said John Denson, general counsel at oil services company. Denson said Core Labs has a heightened sensitivity to the issue given its "experience of having a subsidiary that did have an FCPA problem that pre-dated our acquisition of that subsidiary". He said workers with questions about facilitation, or so-called "grease" payments, which are permissible under the FCPA, must contact its legal department for consultation. There's a gray zone, say some compliance experts, between bribery and facilitation payments, which are allowed by the FCPA only if they speed up paperwork.

Denson said employees there know "continued employment is dependent on their compliance, in every respect, to the Foreign Corrupt Practices Act." He also said Core Labs does background checks on middlemen conducting business on its behalf and has them sign documents acknowledging that the law applies to them. Wrage said she encourages companies to rely less on sales-performance bonuses for field salespeople, particularly in countries where there's high demand for bribes and grease payments. Aside from the costs and complications from government and internal probes, corruption undermines free trade itself, she said. "Free trade means the best product for the best prices usually wins. But these companies are seeing that their bid was the most competitive and their product was far and away the best...and they lost," said Wrage. "They only have to have this happen once or twice before they start getting pretty angry about bribery."

From MarketWatch, by Carla Mozee, 2 February 2005

Narcotics-Related Corruption Cited as Threat to Caribbean States

Washington - New report Studies Conditions in Eight Island Nations - Narcotics-related corruption and associated arms trafficking, and money laundering and financial crime constitute a "growing threat" to the small island states of the Caribbean, according to a new report published by the independent, anti-corruption group Transparency International. The report warned that the "urgent nature" of the narcotics threat derives from the fact that about 35 metric tons of cocaine originated from, was destined for, or transited through the Eastern Caribbean in 2002. The Bahamas was in the top 21 of countries in the world in terms of cocaine interceptions in 2002, and almost half of the cocaine introduced into the United States and 30 percent introduced into Europe comes through the Caribbean corridor, said the report. In addition to assessing the Bahamas, Transparency International's report examined the "national integrity systems" of Antigua-Barbuda, Barbados, Dominica, Grenada, St. Kitts-Nevis, St. Lucia, and St. Vincent and the Grenadines. Transparency International says a national integrity system is a system of checks and balances that is unique to each country that either assures or fails to assure citizens of just and honest government.

Three of the countries studied in the report -- Antigua-Barbuda, the Bahamas and Dominica -- are regarded as major money-laundering territories "whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking." "It is therefore no exaggeration to suggest," said the report, that "drug trafficking, official corruption, [and] violent intimidation have the potential to threaten the stability of the small, democratic countries of the Eastern Caribbean and to varying degrees have damaged civil society in all of these countries." On the positive side, the eight "micro-states" studied in the report "perform relatively better than most countries" in Latin America and elsewhere in the Caribbean region. The reason for this is because they have free and independent media, effective superior courts, a civil society with "latent anti-corruption potential," and, most recently, have established more "stringent regimes against money laundering and financial crimes," according to the report, entitled "The National Integrity Systems TI Caribbean Composite Study 2004."

Transparency International, based in Berlin, also said the report found that domestic and international concern with financial crimes is the reason why some countries in the Caribbean region have adopted more stringent anti-money-laundering offices. Consequently, those countries have been removed from the Organization for Economic Cooperation and Development's Financial Action Task Force list of noncooperating countries regarding money laundering. Transparency International's findings follow U.S. government statements that the primary drug threat to the United States from the Caribbean is the trans-shipment of large amounts of cocaine from South America. The Caribbean also plays an important role in drug-related money laundering, with many Caribbean countries having well developed offshore banking systems and bank secrecy laws that facilitate money laundering, said the U.S. Drug Enforcement Administration (DEA) in its 2003 report called "The Drug Trade in the Caribbean: A Threat Assessment." In that report, the DEA said that in early 2000, the Caribbean Financial Action Task Force, an organization of states of the Caribbean Basin established to fight money laundering, estimated that $60 billion in drug trafficking and organized crime proceeds are laundered through the Caribbean every year.

The DEA report is available online at: http://www.dea.gov/pubs/intel/03014/03014.html. The Transparency International report is available at:http://www.transparency.org/activities/nat_integ_systems/dnld/carib_comp.pdf. (The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov).

From All American Patriots (press release), Sweden, by Eric Green, 2 February 2005

Don't Bring Ethics into Free Trade: WTO Chief

London - The head of the World Trade Organisation (WTO) has said a new era of "ethically driven" decision-making may be in the offing but it must not be allowed to impinge on global trade. Concern about animal welfare in the West may be legitimate, but "if this is brought into areas of trade, then we would have to deal with things that the WTO would not be equipped at the moment to deal with," Supachai Panitchpakdi said in an interview published in The Times newspaper Tuesday. "I don't think at the moment we are ready to do so," he said. The comments by Supachai, whose term as WTO chief ends in August, come in the backdrop of increasing global protests over international trade and ethical issues - ranging from genetically modified organisms to child labour, dolphin protection and the environment. Echoing strong concerns expressed in the past by developing countries such as India, the WTO chief warned that these could be used as excuses to erect protectionist non-tariff barriers. Instead he suggested a bigger role for the United Nations Environment Programme (UNEP) to tackle environmental issues. UNEP could become "a full-fledged organisation to take care of the environment, to take away the hot issue from us. We just do trade," he said. "When I talk about expansion of the areas of responsibility of this organisation I raise the concern that we [WTO] will go into areas like this. It demands a different kind of expertise that we don't have."

From New Kerala, India, 1 February 2005

World, United Kingdom Ban on Kenyan Graft Suspects

United Kingdom - The UK government has issued a travel ban on Kenyan ministers and businessmen implicated in corruption. A list of 20 allegedly corrupt deals was handed over to Kenya's president by the UK High Commission two weeks ago. Envoy Sir Edward Clay said graft was at the heart of government in Kenya, affecting at least four ministries. The High Commission says barring those involved is a strict implementation of rules applying to foreigners wishing to enter the UK and is not a new policy. The US administration last week decided to suspend more than $2m in funding to the Kenyan government to combat corruption. Also last week, Kenya's most senior anti-corruption adviser, John Githongo, resigned, saying he could no longer serve the government.

Fight - President Mwai Kibaki came to power two years ago promising to make fighting corruption a top priority. Last week he rejected suggestions that he had lost the political will to fight graft and ordered an inquiry. "There should be no doubt in anybody's mind about our commitment to winning the fight against graft," he said.

From Keralanext, India, 14 February 2004

United States Stands Firm on Corruption Clause in Trade Agreement with Dhaka

Dhaka - The United States on Monday stood firm against Dhaka's request to exclude a clause related to bribery and corruption from the proposed Trade and Investment Framework Agreement (TIFA) on the first day of the third-round talks here on the TIFA draft prepared by the United States, according to a press report Tuesday. The US delegation, comprising senior trade policy adviser on Asia and Pacific affairs Betsee E. Steelman and a trade official from the US embassy in Dhaka, was firm on inclusion of bribery and corruption issues despite Dhaka's objection, the New Age reported. Joint Commerce Secretary Elias Ahmed, head of a six-member Bangladesh delegation at the talks, was quoted as saying that the decision on corruption and bribery issues had not been finalized yet. He, however, said there was nothing wrong about "inclusion of issues related to corruption and bribery in the agreement." "The agreement will call for elimination of corruption and bribery in both the countries, not just Bangladesh," he added. The United States reportedly has so far signed TIFA with more than a dozen countries. However, corruption and bribery issues have not featured in the US agreements with Sri Lanka, Pakistan, and more recently Afghanistan.

From Xinhua, China, 15 February 2005

USAID Official Says Corruption Can Block Economic Development

Fighting corruption emerges as important U.S. foreign policy objective - Washington - Nothing does more to alienate citizens from their political leaders and institutions and to undermine stability and economic development than endemic corruption, according to a new report from the U.S. Agency for International Development (USAID). A topic considered "taboo" to talk about within the international aid community as recently as 10 years ago, corruption has emerged as an important U.S. foreign policy issue, Barbara Turner, USAID deputy assistant administrator for policy and program coordination, told the Advisory Committee on Voluntary Foreign Aid in Washington on Feb 16. The committee, which links the U.S. government and private voluntary organizations active in international humanitarian assistance and development, meets three times a year. "People throughout the world are rejecting the notion that corruption is inevitable," according to a report Turner presented at the meeting.

The report, "USAID Anticorruption Strategy," defines corruption as the abuse of "entrusted authority for private gain." USAID has adopted an anti-corruption strategy that includes raising public awareness of the problem, which exists not only in failed and failing states, but also in countries that have "sophisticated financial systems," Turner said. The strategy also includes a focus on helping poor countries develop transparent contracting and audit systems and enforce their anti-corruption laws, she said. USAID also is developing its capacity to respond rapidly to reports of suspected corruption in developing countries, Turner said. The agency is training its staff to recognize the signals of corruption in governments and in organizations that receive U.S. development funds, she said. Most USAID overseas missions have indicated interest in expanding their local anti-corruption programs, according to the agency's report.

The approach to providing a comprehensive understanding of what drives corruption will be multidisciplinary, Neil Levine, head of USAID's governance division, told the committee. Additionally, USAID wants to provide more support to local news media organizations that publicly report corruption without putting journalists in danger, Turner said. The report says USAID wants to give special attention to facilitating women's participation in anti-corruption efforts and women's access to public resources, particularly in the areas of health and education. The agency also wants to expand its strategies to deal with corruption at the lower levels of government, according to the report. Corruption of low-paid public officials such as police and teachers is a particular problem, Turner said. Nancy Zucker, managing director of the nonprofit group Transparency International USA, said that when her organization was founded in the early 1990s, it had to demonstrate to governments that corruption was an economic as well as an ethics issue. She added that governments need to create the right environments -- including by making available to the public more contracting information - so that companies can adopt transparent purchasing processes. This would encourage competition and private-sector growth and facilitate effective free markets and the incorporation of developing countries into the mainstream of the global marketplace, the report says.

The full text of the report is available at (PDF file): http://www.usaid.gov/our_work/democracy_and_governance/publications/pdfs/ac_strategy_final.pdf (The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

From All American Patriots (press release), Sweden, by Kathryn McConnell, 17 February 2005

World Bank Says Penalized 300 for Corruption

Washington - World Bank investigators said on Thursday they had penalized more than 300 firms and individuals for fraud and corruption since 1999 but did not know the full extent of the problem in bank-financed projects. In its first report of an expected annual series, a unit set up by bank president James Wolfensohn to root out abuse of bank funds said it had investigated more than 2,000 cases over 5 years involving bank staff and outsiders. Maarten de Jong, who heads the 50 lawyers, forensic auditors and investigators in the Department of Institutional Integrity, said publication of the report was another step in the bank's increased corruption fight. De Jong, a Dutch criminologist, said he was unable to conclude from the data the scale of the abuse. "What it does show is that the World Bank is doing something about it," he told a news conference. The Washington-based institution provides about $20 billion a year for projects in developing countries and has about 1,400 projects on its books, each one involving multiple contracts.

Last year a U.S. Senate panel which oversees international financial institutions questioned how successful the World Bank had been in fighting corruption. Thursday's report showed that in fiscal 2004, 55 firms and 71 people were barred from doing business with the bank and their names posted on the bank's Web site for fraud and corruption. The report also showed that the largest number of new cases were reported in East Asia and the Pacific, and in Europe and Central Asia regions. The least cases were reported in the Middle East and North Africa.

Robert Hindle, a senior bank manager, said it would be "highly speculative" to conclude from the first report overall trends and costs of corruption to the bank. "What we don't know and have no sense of is what is not being brought to our attention, so we are extremely reluctant to conclude anything at this point about the overall level of funds involved," he told the news conference. But he said the data showed a steady rise in allegations of corruption outside the bank, which he attributed to increased willingness by people to report abuse. Hindle also noted that more bank staff and consultants were reporting allegations of corruption and fraud in bank-financed projects. More than half of all tipoffs were from bank staff. "This is a good thing and reflects that this aspect of the bank is becoming increasingly well known and is clearly becoming mainstream," he said. According to the data, 45 percent of all allegations reported were for procurement fraud and collusion, 30 percent for kickbacks and bribes, and 6 percent for overcharging and misuse of projects assets.

From Reuters, Washington DC, by Lesley Wroughton, 25 February 2005

Museveni Advises Scribes on Ethics

President Yoweri Museveni has called for a high level of professionalism and knowledge among journalists while executing their work. "Journalists are duty-bound to maintain moral uprightness, and to ensure that they do not cause, in any way, undue anxiety or distress to anyone through irresponsible reporting and broadcasting," Museveni said. In a speech read by Beatrice Wabudeya, the presidency minister, Museveni said journalists should use the press freedom for fair and truthful reporting. "Competition is quite high, and there is sometimes a tendency for cheap popularity in order to sell, which degrades your work and overlooks the noble interests of people you serve," he said. Wabudeya represented the President at the Broadcast Forum in Kampala yesterday. Museveni said the public relied on journalists to keep them in touch with and informed about the rest of the world. "You must continually and diligently research in order to validate and substantiate what you report in order to maintain credibility," he added. He applauded the journalists for being resourceful in the fight against AIDS and asked them to do more. Lands minister Col. Kahinda Otafiire blasted federal agitators, saying they should concentrate on developmental issues. "I get surprised when I hear people saying that they will die for federo. Don't they have better things to argue about especially issues affecting the lives of all Ugandans?" he asked.

From AllAfrica.com, Africa, by Mari Karugaba of New Vision, Kampala, 1 February 2005

Chad Prime Minister Resigns after Strikes by Civil Servants

N'Djamena - Chad's prime minister resigned on Thursday and was replaced by the former agriculture minister, state radio and officials in the oil-producing central African country said. Moussa Faki, who was appointed in June 2003, was replaced by Pascal Yoadimnadji, a lawyer by training, state radio said. Faki's spokesman said the prime minister had handed in his resignation after a meeting with President Idriss Deby. He gave no reason. Faki's resignation follows months of strikes by civil servants over unpaid wages. Last month, the government started paying the salaries, sending officials out to the arid nation's outlying regions to dole out the money. Chad's budget has come under pressure from an influx of refugees fleeing violence in neighbouring Sudan's Darfur region, which pushed up prices and stretched meagre resources. The International Monetary Fund said on Thursday that it would decide on a new loan programme for Chad in February. Chad started producing oil from its southern Doba project last year but despite the prospect of oil wealth, it remains one of the world's poorest countries.

From Reuters South Africa, South Africa, 4 February 2005

Democratic Republic of Congo Launches Civil Service Census

The Democratic Republic of Congo (DRC) government is looking at ways of streamlining its public sector. This week it launched its civil service census with the help of South Africa. The civil service census is aimed at identifying, training and giving skills to the DRC civil servants so they can be able to render basic services to the people. This has been hailed as a bold step by the Congolese government in efforts to streamline the public civil service. The public transport system in the diamond-rich country is old and always overloaded – a reflection of some of the problems the country is faced with. The civil service is also in a state of confusion. Jean Pierre-Bemba, the DRC vice president, says they are trying to avoid many ghost workers because government does not know how many civil servants it has.

Geraldine Fraser-Moleketi, South Africa's minister of public and service administration, helped the DRC with the mission. She says the launch provides databases where they will know how many employees they have and also give them information to develop conditions of employment. Congolese officials are upbeat about the latest developments. Athanase Matheda Kyelu, the Congolese public and service administration minister, says this will allow them to handle civil servants very well. With this sector getting attention, it is hoped that attention will now turn to other sectors. The civil service launch is one of the many initiatives South Africa has undertaken to assist in the rebuilding of Congo.

From SABC News, South Africa, 6 February 2005

No Salary Increment for Civil Servants

Finance and Development Planning Minister Baledzi Gaolathe dashed civil servants' hopes when he failed to award them a salary increase. The Minister said that the tight budgetary situation and the fact that government has just started the implementation of the new unitary pay structure means that there will be no public service salary adjustment for the current financial year. The government is still reeling from last year's 15 percent salary increase for civil servants, which punched a P600 million hole in its coffers. The increment came after a period of strikes and pressure by civil servants and teachers for better working conditions. The teachers led the onslaught with strikes. Government then realised that labour movements in the country were serious about their resolve to get better pay. Though the government hiked the salaries, others said that it would be highly inflationary. To fund the new pay system, government was forced to halt some of development projects.

From Mmegi, Botswana, by Kabo Mokgoabone, 8 February 2005

Civil Servants to Undergo Annual Assessment Under New Programme

Civil servants will from next year go through an annual assessment system in an array of programmes by the Government to improve the public sector, a top Government official has said. Public Sector Reform and Development secretary, Joyce Nyakeya, said the integrated performance appraisal system, unlike the performance contract signed recently by senior civil servants will target all workers, to help the Government to improve their working conditions. "All employees will sign a contract at the beginning of each year, showing all activities they will carry-out during the year in relation to their respective departments' plans of action," she said. She was addressing a Kenya Private Sector Alliance conference at Safari Park hotel. The system is still being fine tuned, and a pilot study, targeting five ministries, will commence in July, to be fully adopted in 2006. She said the organisational structure of the Government has remained the same, with recruitment done as a social obligation rather than looking at the needs of the country. However, she said, reforms in the civil service will take long time, but priority will be given to those delivering services, like agricultural extension officers.

Ms Nyakeya said that the civil service is still too big. "To what extent are we as a country ready to continue paying high salaries to civil servants and be left with no money to invest in our economy?" she asked. Figures available show that the Government spends at least nine per cent of the country's Gross Domestic Product (GDP) paying civil servants salaries every year. In Uganda and Tanzania, less than five per cent of the GDP goes to paying civil servants. However, she said, some ministries would need to hire more staff, while others might have to reduce them. Ms Nyakeya said: "The interesting issue about the civil service is that the wage bill is too high, yet the individual civil servants are underpaid. There should be a way of getting the right size which can be fairly remunerated." The managing director of Avenue Healthcare, Dr Amit Thakker, said the Government should give all civil servants skills assessment tests, to filter out those who are qualified.
He said hiring practices in the civil service were influenced by interests other than merit, leading to overstaffing.

From AllAfrica.com, Africa, by The Nation, Nairobi, 10 February 2005

Mbeki Expected to Rein in Civil Servants

President Thabo Mbeki is expected to give tough new guidelines to his government, particularly the 1.1 million civil servants who are ultimately responsible for improving the lives of all South Africans. He can also be expected to make a call on South Africans living abroad to come home with their skills as the country shifts gear in the battle to fight poverty and create jobs. Mbeki will deliver his State of the Nation address at 11am to a joint sitting of parliament and several high-profile guests including former presidents Nelson Mandela and F.W. de Klerk. In his State of the Nation address on May 21 last year, Mbeki set out an ambitious and targeted programme of action by which his government could be held to account. On Saturday he will deliver a progress report focused on which targets have been met, which have been delayed and why and which new programmes his government will embark on to complement what has already been done.

Mbeki will undoubtedly place much focus on the state of the economy, his government's stated intention of realising a growth rate of between three and six percent, the rate of inflation and also the country's interest rates. He will take a sober look at unemployment and job creation, and the progress, or lack thereof, in meeting the targets set by the Jobs Summit of October 1998, as well as the Growth and Development Summit of June 2003. Mbeki will want to breathe new life into his government's pursuit of a better life for all South Africans by taking stock of the progress in delivering in such crucial areas as education, health, housing, water, sanitation and social grants. The capacity of provinces and local government to deliver these services will get special attention and the public will be urged to keep their local representatives on their toes. Another key area will be the fight against crime, given that Mbeki said in his last state of the nation that he wants the country's top 200 criminals arrested and brought to justice.

From Independent Online, South Africa, by Jeremy Michaels, 10 February 2005

Mbeki Wags Finger at 'Lazy Civil Servants'

President Thabo Mbeki promised on Friday to "deal with" lazy civil servants who deny citizens the service they deserve, but also issued a stern warning that violent protests by communities impatient with service delivery "will be met with the full force of the law". Mbeki's state of the nation speech in parliament criticised the state's evident inability to deliver services as it was expected to and said his administration would have to ensure that it improved "the machinery of government". Non-delivery was "a reflection of weaknesses in the governance system", Mbeki said. Mbeki said: "That only 56 percent of the municipal infrastructure grant had been allocated to municipalities by December is a reflection of a lack of all-round capacity, particularly... with regard to water, sanitation and public works projects. He said: "We need massively to improve the management, organisational, technical and other capacities of government so that it meets its objectives." By May the directors-general of all government departments would be submitting to cabinet a review of the way government functioned and recommend how to speed up social transformation. The government would also have to educate people that "our country does not have the resources immediately to meet, simultaneously, all the admittedly urgent needs of our people". The president said the government would also "have to deal with those within the public service who, because of their negligence and tardiness, deny many of our people services due to them".

The Institute for Democracy in South Africa (Idasa) commented: "The speech provides an opportunity for service delivery to be significantly enhanced by parliament exercising vigorous oversight roles to ensure the executive meets its delivery targets." Cosatu's general secretary, Zwelinzima Vavi, criticised Mbeki's announcement that by the end of the year government would complete a system of tax and levy exemptions for medium, small and micro-enterprises, as well as proposing a series of central bargaining arrangements. Vavi said business had been lobbying government to introduce the ideas floated by Mbeki. "Those who enjoyed better jobs yesterday will lose their jobs and end up in these casualised forms of employment. We want to warn that we will not take that lying down," Vavi said. Democratic Alliance leader Tony Leon said Mbeki deserved credit for admitting the lack of progress in some areas, "but clearly the state lacks the capacity to play the expanding role that the president and the ANC envisage for it". "President Mbeki failed to acknowledge one of the major reasons for this failure of delivery - namely, that racial transformation of the public service has pushed some of the best-qualified civil servants out of government departments." United Democratic Movement leader Bantu Holomisa said: "Sadly, there has been a trend in the civil service of appointing only people with ANC membership cards who are often unqualified, incompetent or intent merely on their own enrichment."

From Independent Online, South Africa, by Jeremy Michaels, 12 February 2005

Declaration Way to Go, Says Githae

An assistant minister wants the law amended to provide public wealth declaration. Robinson Githae, of the Justice and Constitutional Affairs ministry, said that as it stands, the Public Servants Ethics Bill has failed to check corruption since the contents of the wealth declaration forms remain secret, anyway. The forms filled in 2003 by prominent personalities, including the Head of State, are just gathering dust wherever they have been kept under lock and key, Githae said. The law makes it is a crime for anybody to disclose the contents of the wealth declaration forms. If found guilty, one can be jailed for two years or fined Sh2 million or both. Githae was answering questions from journalists during the induction of 45 senior Kenya Anti- Corruption Commission officials at Mt Kenya Safari Club in Nanyuki. "If the law is changed so Kenyans can know how much a leader was worth before assuming office and what he had amassed, it will be easy to determine whether the leader is corrupt," he said. He called on KACC to publish, on a weekly basis, the progress of cases it was handling to keep the public updated. He proposed that KACC should not wait until it had finalised all the cases before making it public. Githae said Kenya was committed to fighting against corruption as the ordinary people had suffered a lot from the pervasive nature of economic crime and graft.

From AllAfrica.com, Africa, by The East African Standard, Nairobi, 15 February 2005

Low Wages Contribute to Corruption in the Civil Service - Gyimah Boadi Argues

A senior Lecturer at the department of Political Science, Prof. E. Gyimah Boadi, has identified poor remuneration among public service workers as a major cause of corruption and mal- administration in public administration in African countries. In his view, African states and governments have yet to address an important pre-requisite for developing economies: ie. adequate remuneration for public servants and state officials. Prof. Gyimah Boadi said these at an inaugural lecture on the theme: "The quest for development of the state, what has liberal democracy got to do with it," at the University of Ghana last week. He noted that the former Singaporean Prime Minister, Lee Kwan Yew succeeded by matching public service salaries with those of the private sector in that country.

Quoting Lee Kwan Yew, he said "underpaid ministers and public officials have ruined many governments and adequate remuneration is vital for high standards of probity in ministers and high officials. "It is difficult, if not impossible, to assail the argument that we have to pay our public servants far better than what presently prevails, if we are to have a moral and technical basis for expecting effective delivery of public services worthy of a developmental state," he said adding. "And yet few African governments have attempted anything close to a meaningful salary reform." He said underlying the persisting corruption in public services are difficult administrative procedures and some government policies, which the public consider irksome, unjust and discriminatory. Prof. Gyimah-Boadi further said unlike developed states, African countries are often unable or unwilling to insulate key sections of the public service from partisan and sectional political pressure.

In addition, African states are unable to recruit qualified and competent administrators and accord them the necessary authority to direct economic development programmes without resistance from other political parties. "Far from a commitment to strengthening the public service, governments in Africa are more likely to deliberately weaken the public service, undermine its autonomy and render it vulnerable to manipulation," Prof. Gyimah- Boadi explained. He said political leaders in African countries are aware of this problem of inadequate remuneration for public sector staff but are handicapped in the area of tax mobilization. "Afraid of the likely political and accountability implications, thy shy away from improving tax collection, preferring foreign aid instead," he said.

He cited the impasse over the Price Waterhouse salary reform proposal in the Rawlings/NDC era as a typical example and added that even though President Kufuor proposed a national debate on the salaries of public servants at the beginning of his term of office, nothing has been heard of it until now. "Imagine renewing a passport or attempting to register land and this would bring to the fore that very little has changed from the olden days." Prof. Gyimah-Boadi, however, said thanks to constitutional rule, there is a gradual return to the traditions of an independent public services commission and the neutrality of public servants in political issues which had been lost under a succession of authoritarian regimes. He said democratic politics consisting of FM radio stations, Parliamentary Vetting and questions, appear to be helping to expand the space for the Ghanaian public, taxpayers and consumers, to publicly voice out their demands for greater governmental responsiveness and accountability. "That probably explains why Ghana now has a Senior Minister whose main ministry appears to be the reform of public service."

Dwelling on the importance of democracy to development, Prof. Gyimah Boadi said democracy in its infant stage generates considerable negative pressures for state reform. These include political patronage; the use of governmental power to reward political insiders, which encourages self seeking behaviour and discourages productive work. There has been various debates as to the real causes of Africa's problems. Whilst scholars like the leading African Sociologist Ali Mazrui has blamed it on local and foreign factors, some world leaders say it is time to tackle Africa's developmental problems.British Prime Minister Tony Blair has repeatedly said he wants Africa to be a priority during Britain's presidency of the G8 this year.

He told the BBC that he hopes to raise the "profile and visibility" of the continent's problems in order to encourage people to offer more help. They say they are wary, based on past experience, particularly when it comes to pledges to relieve debt. Aid organisations say they will want to see that money is not reallocated from one set of poor countries to another. Romilly Greenhill, policy officer for ActionAid, said deaths as a result of poverty and preventable diseases in Africa amounted to the equivalent of the tsunami death toll every week. Africa is the only continent to have grown poorer in the past 25 years. It is the continent with the largest number of people living on less than a dollar a day - 49% of the total population. One African in three is undernourished. Twenty-eight million people in Africa are now affected with HIV/AIDS. There are 11 million orphans in Africa as a result of Aids. Africa also accounts for 90% of global deaths from malaria, and a woman in Africa is over 100 times more likely to die in pregnancy or childbirth than a woman in a developed country.

From AllAfrica.com, Africa, by Isabella Gyau Orhin of Public Agenda, Accra, 15 February 2005

Civil Servants to Sign Performance Contracts

Civil servants will from June 30 sign a one-year contract whose extension will depend on their performance, the Government announced yesterday. The first evaluation will be conducted between July 1 and September 20 next year when thousands of civil servants will know their fate. A Minister in the Office of the President in charge of Public Service, Mr William ole Ntimama, told civil servants attending a training programme in Nairobi that government employees, including those in state corporations, will now have to sweat for their pay. The civil service has become the butt of jokes by the public with the notorious jacket-on-the-chair jibe. "It is the intention of the government to re-emphasise meritocracy and excellence as the criteria for recruitment and retention of public officers in the service, " he said. He said it was high time performance was measured against set criteria to avoid rewarding sloth. He urged civil servants to embrace the concept, saying the government was serving its moral responsibility by responding to demands by the public for value of taxes paid.

Outlining details of the looming contracts, the Permanent Secretary to the Cabinet and Head of Public Service, Mr Francis Muthaura, said ministries and departments were expected by April 1 to outline their performance targets for the financial year 2005 and 2006, which usually begins in June. The Ministries are expected to submit quarterly performance reports within 30 days after the end of each quarter or 30 days after every three months. State corporations that have signed the contracts will submit their reports by October 7, this year, while the remaining will submit their reports by October 2006. The top 10 performers will be recognised every October 20, including top 10 performing ministries and departments. State corporations that have signed the contracts will be recognised on October 7.

From AllAfrica.com, Africa, by Argwings Odera of The East African Standard, Nairobi, 17 February 2005

The Public Service Must Serve Us All

An overweight public service was pared down... but now President Mbeki has conceded that it has become too thin to get the job done properly and, already, a head-hunt is on for people to boost performance in the health, education and engineering fields. Mbeki said, expanding on his State-of-the Nation address, that the government needs to increase its capacity to achieve what must be done. He referred to crippling staffing problems which, in some instances, meant deadlines he set had been missed. While he has stressed that inefficiency would not be tolerated, he gave his assurance to public servants that retrenchments were not part of the plan. Rather, staff would be retrained and supplemented to give government departments the capacity to do the work they need to do.

He also told us that additional costs incurred in bulking up the public service would not come at the expense of spending on social development. All of this is good news in a city where so many depend on the public service for their livelihood but also where we rely on the public service on a daily basis. South Africa needs a quality public service which will get the job done and, for this, suitable people must be employed. They must be accountable not only to the President, but to all the people they serve. Never again do we want to see a fat-cat public service where the image we have is that those employed to serve us sip tea while we wait, frustrated, for their attention.

From Pretoria News (subscription), South Africa, by Philani Mgwaba, 17 February 2005

Questionable Work Ethics Still Persistent in Public Service - PSC

Government has to inculcate a strong work ethic among those public servants who continue to undermine service delivery and strategic goals that have been set. The Public Service Commission (PSC) sounded this call in Parliament today when it released its annual report on the state of the country's public sector. Under the theme, Bracing the public service for sustained, effective delivery based on Batho Pele, the report urged government to consolidate its developmental foundation by strengthening its mechanics aimed at capacity building, anti-corruption, public participation and the retention of scarce skills.

It also called on authorities to speedily address professional misconduct in provinces, where it says an impression has been created that nothing is being done to deal with corruption, the flouting of Batho Pele principles and other policies central to service delivery. Whistleblowers, said the independent body, ought to be given further protection by way of educating the public about guidelines on reporting corruption and maladministration, among others. However the implementation of government's socio-economic projects remains the single most crucial challenge characterised by under-spending, the development of wrong strategies and over ambitious targets with many objectives that often fail to achieve their intended outcomes, the report says.

"More attention is still required at the level of implementation to ensure that a culture of professional ethics is entrenched in the public service and it finds expression in the daily conduct of each and every public servant," said head of the PSC Professor Stan Sangweni. The report comes a few days after President Thabo Mbeki admitted that government could not meet some of its time-bound targets because of some delays in his administration and this needed "urgent attention". He however warned lazy and incompetent civil servants against dragging their feet, saying authorities would deal with them accordingly. "We have to deal with those within the public service who, because of their negligence and tardiness, deny many of our people services due to them, in instances where resources have been made available to deliver these services."

A view later echoed by education minister Naledi Pandor, who said she was "troubled" by some officials who disregarded some education targets President Mbeki had set as urgent. This relates to the building of new classrooms to have all pupils in the country learning in proper establishments with safe water and sanitation, by the end of this financial year. Lengthy tendering processes, problematic supply chain processes, under-spending on school infrastructure by provinces and the dragging of feet by some officials have been cited as some of the reasons for targets not being met. The PSC said it would mount pressure on officials by visiting service delivery sites unannounced to check if there was movement on the ground, a view backed by President Mbeki.

From AllAfrica.com, Africa by Matome Sebelebele of BuaNews, Pretoria, 16 February 2005

Civil Service to Be Re-organised

Accra - A re-organization of the Ghana Civil Service begins this year, as part of the Public Sector Reform under the good governance programme. Announcing this in the 2005 Financial Statement, the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu said the Government was finalising a professional Human Resource framework, establish a regulatory framework for subvented agencies and the development of a sound communications strategy. Mr Baah-Wiredu said the Government would further improve the management of the payroll and eradicate the incidence of ghost names by tightening the rules and strengthening systems of control, implement systems for the capture and management of subvented agencies among other things. "Government is also to clarify institutional responsibilities for payroll and personnel database management and independent scrutiny of Report 11 prior to submission to the banks for payment. He said a Credit Union Bill would be promulgated this year to encourage savings as well as open up opportunities for people to access credit and hire purchase system. Mr Baah-Wiredu said a National Identification system would be executed this year to streamline transactions based on credit information. House numbering, naming of streets in all towns and cities to ease communication and contacts within the society would be implemented this year.

From GhanaWeb, Ghana, 24 February 2005

No More Cheap Money for Public Servants

For around one million civil servants nationwide, it seems hard to enjoy the benefit of cheap money from commercial banks in the future. According to an announcement from the bank industry on February 3, 14 banks including Nonghyup, Kookmin and Woori decided to suspend low interest credit loans subject to public servants unless they cannot exercise security rights over civil servant retirement allowances. Banks have loaned civil servant-borrowers money with around five percent interest under an agreement with the Government Employees Pension Corporation (GEPC). The agreement says: "The Government Employees Pension Corporation will remit civil servant-borrowers' loans with their retirement allowances to their credit transaction accounts in case they do not pay back their borrowed money."

Under government employee pension law, banks cannot exercise a security right over the retirement allowance of public servants, but the GEPC has guaranteed that government employees clear their bank debt first before any other things after they get their retirement allowance. However, the practice has drawn banks' attention as cases public servants have filed resulted in the court writing off their loans, and some of them redeemed their lending money since the Individual Credit Recovery Act, enacted last September, were reported. Indeed, a court ruled that the retirement allowance of government employees couldn't be used as a security.

A relevant official of a commercial bank said, "Moral hazard has become serious among public servants as some of them unscrupulously get write offs on their loans while taking advantage of institutions after using cheap money from banks." In fact, Woori Bank said that the number of civil servants who applied for debt redemption before a court has increased to a whopping 100 compared to 30 of last November, Hana Bank also reported the number surged to 58 from 32 during the same period. Fourteen banks recently have submitted a joint petition to the Supreme Court to recognize public servant's lending as a loan on security. Under the circumstances, banks are now considering reducing the amount of credit and raising interest rates for government employees to more than nine percent, in line with ordinary lending interest rates, after closing the agreement with the GEPC, in case their request is not accepted.

From Donga, South Korea, by Seung-Jin Kim, 3 February 2005

Shape Up or Ship Out, Idris Tells Civil Servants

Kuala Terengganu: Buck up or face action - this is the advice of Mentri Besar Datuk Seri Idris Jusoh to errant civil servants in the state. He said it was wrong to assume that they enjoyed job security till retirement. "We can take disciplinary action, including dismissal, as poor performance affects the Government's delivery system," he said in his speech at the presentation of excellent service awards to 12 recipients for 2003 here yesterday. He said state secretary Datuk Muhatar Abdullah should initiate action against those who played truant or did not discharge their duties well. "This kind of attitude should not be allowed to continue as it will have a contagious effect on others," he said. Terengganu has 16,000 civil servants including 4,000 who work with state agencies. Idris reminded civil servants that they must continuously improve on their knowledge and must "unlearn and re-learn new ideas". "They must also have a sense of urgency in completing the task before them," he added. Muhatar said action would be taken against errant civil servants based on the report submitted by their department heads.

From Malaysia Star, Malaysia, 4 February 2005

Courses for Civil Servants to Continue

Government servants, especially those dealing with the public, will continue to attend courses held by the Anti-Corruption Agency, Chief Secretary to the Government Tan Sri Samsudin Osman said. "The ACA officers and I will give talks to civil servants on ways to rid abuse of power, irregularities and corruption within the service sector. "We do not want the sector to be tainted with negative activities," he said. Referring to the proposal by Prime Minister Datuk Seri Abdullah Ahmad Badawi that decision-making centres be set up in government departments and agencies, Samsudin said the move would first be implemented at the Road Transport Department, National Registration Department and the Immigration Department.

The centres will be made up of lower-ranking officers who will be empowered to make decisions on behalf of their superiors. They will handle applications for licences, passports and identity cards. "It should be stressed here that it is the delegation of power and not delegation of responsibility from higher-ranking officers to the lower-ranking officers. "Responsibility still lies with the higher-ranking officers who will have to monitor whether the lower-ranking officers have made the right decision. "If there are mistakes and the decision made is wrong, it becomes the responsibility of the higher-ranking officers to rectify those mistakes." Samsudin had earlier been re-appointed Chief Secretary, with consent of the Yang di-Pertuan Agong, for another year, effectively from March 3.

A statement was issued by the Prime Minister's Department today. Abdullah said Samsudin, who was appointed to the post on Jan 1, 2001, and re-appointed on a contract basis for two years effective March 3, 2003, until March 2, 2005, was needed to further steer the public service to greater heights. He said he had full confidence that Samsudin would be able to bring more changes and enhance the public service delivery system. "There are many things that need to be done in the administration for positive changes. Samsudin must lead efforts to bring about these changes."

From New Straits Times, Malaysia, Putrajaya, 9 February 2005

New Government to Hold Post-election Gathering on Civil Service Reform

Bangkok - Thailand's newly-elected second term government has announced plans to hold a conference on civil service reform.
Deputy prime minister Visanu Krue-ngarm said it would draw suggestions from ministers, senior officials, and academics.
"Prime Minister Thaksin Shinawatra wants the reform to continue the way it has been conducted during the past two years. The reform committee has already created a model, which will be discussed at the workshop," he said. Mr Visanu said the there had already been some progress towards reform, and that the committee had carried on its work continuously. "We already have plans about what to do this year, next year and the year after that. We will also be evaluating them to fix any loopholes," he said. He said civil servants would be encouraged to work more effectively and a number laws would be amended to accommodate the changes. The deputy prime minister said the reform committee had also studied the need to merge some departments and ministries.

From MCOT, Thailand, 9 February 2005

Some Public Servants to be Redesignated

At least 35,000 public servants, presently employed as clerks, stenographers, typists, storekeepers, book keepers and shroffs will be designated as Management Assistants under a new program, initiated by the Ministry of Public Administration and Home Affairs. The program which was initiated on December 1, last year will be operative from March this year. The Ministry of Public Administration and Home Affairs in a recent circular to countrywide local government institutions, departments and ministries where employees serving under such categories with the appointments granted by the Combined Service,set a deadline to express their consent over this new proposal on or before March 23 this year. Minister Amarasiri Dodangoda told the Sunday Observer that those who wish to accept this new proposal could remain in the service as Management Assistants and others will get an opportunity to seek their retirement. Employees who seek retirement under the new scheme, will be entitled to draw their pension from the following month.

From Sunday Observer, Sri Lanka, by Ananda Kannangara, 12 February 2005

Frontline Government Staff Beware!

The next time the telephone rings, it may be your head of department on the line. And he may be using a fictitious name to inquire about specific services. "By doing this, they can check on the efficiency of frontliners, including telephonists," Chief Secretary to the Government, Tan Sri Samsudin Osman said of his novel proposal for improving civil service efficiency. He wants heads of department to experience for themselves the response from their frontline staff. "They can pretend to be members of the public in telephone calls to the general line of their respective departments," he said in an interview. Samsudin said such calls could reveal if staff were courteous and gave proper answers. "Through constant checks, complaints by members of the public can be further minimised," he said. He said heads of department should regularly check on the performance of their staff. "Our ultimate objective is to enhance the image of the public service delivery system in the eyes of the public." Such a move would complement the Government's on-going courtesy campaign, he added. He said public relations courses would be held for civil servants, especially those dealing daily with the public.

Intan (National Institute of Public Administration) would continue to hold short courses for civil servants on dealing with the public. Samsudin said the Government wanted to deliver professional and value-added services to the public. The Government has been emphasising the need for an efficient and user-friendly public delivery system. On the meeting tomorrow between Cuepacs representatives and Public Service Department officials, Samsudin said the latter would listen to issues raised. The Cuepacs delegation will be led by newly-elected president Nordin Abdul Hamid, while the PSD team will be headed by director-general Tan Sri Jamaluddin Ahmad Damanhuri. Nordin is expected to raise the matter of the Efficiency Level Evaluation (PTK) for public sector employees, criticised by civil servants. Other issues for discussion include a five-day working week for all civil servants, full-pay study leave, the 13-month salary and annual bonuses.

From New Straits Times, Malaysia, 20 February 2005

Civil Servants Must Think When Socializing

Regulations on national government employees socializing with the people from outside the bureaucracy that they do business with will be relaxed effective April 1. The government is going to revise ethical rules for national government employees at the request of the National Public Service Ethics Board of the National Personnel Authority. One of the major elements of the revision is that restrictions on public servants wining and dining with stakeholders will be relaxed as long as they pay their own way. Under the current rules, national service officials need approval from their superiors to eat or drink at night with stakeholders. After the rules are revised, they will no longer need such approval. Only in cases where the tab is likely to exceed 10,000 yen in total will they have to report it in advance.

The regulations are to be relaxed because government ministry and agency officials complained that the current rules are so strict they prevent exchange of information with other public servants or people in the private sector. At the National Public Service Ethics Board, government officials also pointed out various problems caused by the strict rules--many officials are daunted and have become unwilling to collect information from or exchange opinions with outsiders or they collect information only from the Internet without leaving the office. Some bureaucrats also complained the current restrictions have prevented them from getting unfiltered information and caused more difficulties in policymaking--their most important job. It is very important for central government officials to collect necessary information from various high-quality sources in formulating and carrying out policy.

Sensible limits must apply - To discharge their original responsibilities, central government officials need to socialize with stakeholders to a certain extent, but common sense must be used to set limits. Such an approach assumes public servants have a sense of mission to work for best interests of the nation and its people. Of course, the relaxing of the regulations must not lead to a resurgence of unrestricted fraternization with stakeholders including the wooing of public servants with excessive entertainment from stakeholders from the private sector. The National Public Official Moral Code and rules of ethics for national government officials were put in place in April 2000 because a series of scandals involving elite bureaucrats surfaced in the late 1990s. Senior officials of the Finance Ministry and the then International Trade and Industry Ministry were treated to excessive entertainment and given expensive gifts by businesspeople and an administrative vice minister of the then Health and Welfare Ministry accepted a bribe. Since the public lost confidence in public servants, the government strictly restricted socializing by national government employees with people they met through their jobs and were in a position to give approvals, licenses, contracts or grants to or whose firms they might have to inspect or supervise.

Scandals still surfacing -Of course, bureaucrats are no longer being treated to excessive entertainment or expensive gifts. However, scandals which further deepen public distrust of national government officials still keep surfacing. One example is a scandal involving the Health, Labor and Welfare Ministry and the Social Insurance Agency. Their officials systematically received and shared fees paid by private publishers for supervising the editing of information booklets which were made with state subsidies. The latest revision will add clauses to the ethics rules prohibiting the acceptance of fees for supervisory work or any other systematic illicit conduct. The ethics rule book would not need such clauses if central government employees simply used common sense and each one listened to his or her conscience. The nation faces important and difficult problems concerning its social security system, aging population, low birthrate, finances, education system and environment. The responsibilities and roles of central government employees in solving these problems have become more important than ever. Public servants must have a sense of duty to fulfill their responsibilities and play their roles.

From Daily Yomiuri, Japan, by Yomiuri Shimbun, 19 February 2005

World Bank Concerned About Slow Progress of Civil Service Reforms

Islamabad: The World Bank has expressed its concern over the slow progress of structural reform of the Pakistani civil service, as indicated in an interim report of the Actuarial Office on pay and pension reforms. The report states that proposed reforms might not achieve the desired financial objectives. A draft of the report was shared with the World Bank (WB) several months ago and the bank made several suggestions to the government, but it appears that the government did not take these suggestions into consideration, sources told Daily Times. "WB officials were unable to meet the chairman of the pay and pensions committee to convey the bank's concerns," sources said.

The WB's pensions team had been providing training and technical support to the Actuarial Office for over a year and the office prepared the interim report which was submitted to the pay and pensions committee, sources said. The WB provided $61 million to the Government of Pakistan for training and restructuring the top bureaucracy according to modern requirements, sources said. Sources said the bank had several concerns about the recommendations proposed in the report, including that financial savings projected by the actuarial assessment were overstated; that the parametric reforms were somewhat marginal; and that the costing of the reform proposals was marginal and incomplete. "The bank has also expressed concerns over the extent to which provincial governments have been involved into the process and work of the Actuarial Office," he said.

The Actuarial Office report states: "Progress on civil service restructuring and the creation of the National Executive Service (NES) has been slow. The Establishment Division and the Civil Service Reform Unit (CSRU) has proposed to pilot, in Basic Pay Scale (BPS) 19 and 20 of the federal secretariat, the creation of an open stream based upon merit and with improved transfer flexibility amongst the various divisions and departments." It also states that it is not clear to what extent the government approved this policy and when would it be implemented. In addition, the CSRU planned to undertake wider studies of detailed design of the NES, taking into account lessons learned from the introduction of the new stream.

It appears that the creation of a broader NES as originally envisaged has met significant internal opposition and has been seen as elitist, evoking similar concerns to those raised by the District Management Group (DMG). "The proposed CSRU pilot, if restricted to senior secretariat cadre grades only, may demonstrate that the fears about elitism are warranted because officers can reach senior managerial executive positions without much experience or development," the report adds. The report concludes that the Actuarial Office would share the database used to make projections of reform options with the bank and that the bank's experts were ready to come to Pakistan and work with the pay and pensions committee to develop reform options which could be implemented to achieve short-term targets and also to work on a long-term pensions reform strategy with the Ministry of Finance.

From Daily Times, Pakistan, 19 February 2005

UNDP and Afghan Civil Service Commission Seal a Deal for Parliament

UNDP and Afghan Civil Service Commission SEAL a deal for Parliament22 February 2005; Kabul Afghanistan: Today, UNDP solidified a partnership to support the establishment and functioning of the Afghan legislature. A day after the official launch of the first ever National Human Development Report for Afghanistan, which emphasizes the importance of efficiency, transparency and accountability in government as prerequisites for human development in Afghanistan, UNDP entered into an agreement with the Government of France and the Afghan Civil Service Commission that will ensure that the incoming parliament is given proper support to do its work. Mr Zephirin Diabre, Associate Administrator of UNDP, and Dr. Ahmad Moshahed, Chairman of the Independent Administrative Reform and Civil Service Commission of Afghanistan, endorsed the project document for "Support to the Establishment of the Afghan Legislature" (SEAL) project. SEAL is a two year, two phase project that aims to put in place the necessary stable democratic foundations for the Afghan Legislature. Phase one will focus on meeting start-up needs and costs for the Parliament before elections. Post-elections, Phase two focuses on continuing to support and to sustain the functions of the parliament in its role as legislator.

Dr. Moshahed addressed his remarks to the future Afghan parliament and referred to its responsibility to the people of Afghanistan. "With the establishment of a parliamentary system", he stated, "we hope that Afghanistan will witness the emergence of a modern and civil life and the establishment of peace and security." Once elected, the Upper and Lower Houses of parliament will be situated at the former parliament compound on Dar-Ul-Aman road -- renovation and rehabilitation to the structures is underway through a project of the Ministry of Urban Development and Housing. While structural preparations for the incoming parliament proceed, the SEAL project aims to train a core group of civil servants to populate the parliament building, and to put in place the legal framework as well as the coordination and programming mechanisms that will support the new government. In order to facilitate proper communications with all branches of government, the new facilities will be outfitted with office equipment, information and communications technologies, and an effective public outreach strategy will be designed.

"I am pleased to continue to promote the important role of parliament", stated Mr Diabré, "Parliament is a place of debate and the foundation of what will ensure strong leadership in this country." Prior to his appointment as Associate Administrator of UNDP, and among his other leadership roles in his native Bukina Faso, Mr Diabré served as Minister of Finance and as a parliamentarian. Together with several senior representatives from ministries, UN agencies and the donor community, the document signing was witnessed by His Excellency Jean-Pierre Guinhut, Ambassador of France to Afghanistan. While the Government of France is currently the lead donor for the SEAL project, His Excellency Guinhut promptly pointed out that, in terms of initiative towards democratic governance, "there is only one leading nation - and it is Afghanistan." For more information, please contact Gary S. Holub, Communications Officer UNDP. gary.holub@undp.org Hiroko Takagi, Programme Officer UNDP, hiroko.takagi@undp.org

From ReliefWeb (press release), Switzerland, 24 February 2005

Government's First Counter Service Set to Open

Bangkok - The Civil Service Development Committee plans to open the government's first counter service on Saturday at Sky Train stations, to accept payments and offer other government services. The planned counter service is part of the government's scheme to make the country's public services more efficient, a senior government official, Thosaporn Sirisamphan told TNA. The Government Counter Service (GCS) is designed to help tackle the civil service's red tape culture. ''People just visit the counter and can do everything they need to,'' Mr.Thosaporn said. The public will be able to pay their bills, post letters, renew their passports, pay their income tax, buy an airline ticket, get an identify card and a 30-baht-health-care card, he said. Thailand's Prime Minister Thaksin Shinawatra will attend the official opening ceremony of the GCS. ''In the near future, we hope to set up government counter services inside communities, underground train stations, department stores and airports throughout Bangkok and in the provinces," Mr. Thosaporn said.

From MCOT, Thailand, 23 February 2005

Public Servants and the 'Treaty Principles'

National Party Leader Don Brash says the next National Government plans to strip references to the vague 'principles of the Treaty of Waitangi' from public service employment contracts. "The next National Government will make it clear that a knowledge of the Treaty and its supposed principles will not be a condition of employment for people working in the public sector." Dr Brash was speaking in Auckland today. "Instead, we will adopt a less exotic approach in relation to the recruitment of public servants; one where we seek auditors who can actually audit, managers who can manage and accountants who can count," says Dr Brash. It has been a year since Trevor Mallard and Helen Clark promised to clean up the mess created by the 'principles' of the Treaty. "Political correctness around the Treaty?

The stuff that Trevor Mallard was committed to eliminating? We know that almost every advertisement for a job in a government department still includes words noting that the department has a "commitment to the principles of the Treaty of Waitangi", though without the slightest explanation of what that might mean. "A recent advertisement for six positions in the Ministry of Transport noted that that department was 'committed to creating a positive linguistic environment where te reo Maori is valued and encouraged'. Another advertisement, for the position of Deputy Controller and Auditor-General, notes that the applicant should have 'the ability to work effectively within the spirit of the Treaty of Waitangi'. "Of course those public servants working to resolve Treaty settlements need to have an understanding of the Treaty of Waitangi, but there is surely no need whatsoever for other public servants, or for school teachers, or for nurses, or for Auditors-General, to subscribe to a particular view of what the Treaty implies," Dr Brash says.

From Scoop.co.nz (press release), New Zealand, by Don Brash, 25 February 2005

20 Top Public Servants Graduate

Some familiar faces in the public service received diplomas at the Executive Development Programme 1 graduation at the National University of Samoa's Le Papapigalagala campus. The Executive Development Programme is a component of the Government's Strategy for Professional Development in the public service. It is intended for executive managers. Steering committee chairman Sala Epa Tuioti said the programme adopted the process of "Action Learning". This is where participants discuss, reflect and apply their learning from formal sessions directly to the real work problems and challenges facing them in the workplace. They also devise strategies to address these problems, said Sala. The one-year course was delivered by the University of New England in New South Wales, Australia, in collaboration with the Public Service Commission. The first group was launched in March 2004 with 20 selected participants from Government Ministries.

Prime Minister Tuilaepa Aiono Sailele Malielegaoi, who delivered the keynote address at Friday night's graduation, reflected on the importance of the programme in strengthening the capacity of the public service. This is particularly in relation to Government's long term plans and directives. A key component of the 12-month programme is the presentation of a group "workplace project". This is on a prevailing challenge or problematic issue within the workplace and how the project plan would contribute to public sector objectives and Government's strategic directives. Participants were expected to conduct research, network, investigate and consult extensively with peers and stakeholders. This is so they would be able to gather data, analyse it and present practical solutions and strategies for Government and other users of the completed project.

From Samoa Observer, Samoa, by Terry Tavita, 22 February 2005

Conference to Consider Public Service Broadcasting

Journalists and experts will meet in Moscow later this month to discuss establishing a model for public service broadcasting in that city's region. The Media Division of Council of Europe is organizing the conference, scheduled for February 24. The locally based Foundation for the Development of Public Service Broadcasting is cooperating on the event. A year ago, the Council of Europe's Parliamentary Assembly issued a recommendation on public service broadcasting. Among other things, the document recommended programs to more closely align public broadcasting in Russia - as well as Azerbaijan, Georgia and Ukraine - with European standards. An overarching aim of this work, according to the recommendation, is to help foster environments that better uphold freedom of expression.

For more information on the conference, contact Alessia Sonaglioni at Alessia.SONAGLIONI@coe.int. Meanwhile, the Media Division also is conducting a seminar in Chisnau, Moldova, on media and elections. That seminar is scheduled for February 8 and 9 and is conducted in conjunction with the Stability Pact for Southeastern Europe. For more information, contact Eugen Cibotaru at Eugen.CIBOTARU@coe.int. And in Serbia-Montenegro, the division is holding a seminar on balancing freedom of expression with other fundamental rights, such as privacy, the presumption of innocence, and a fair trial. That seminar, scheduled for February 22 and 23, is in cooperation with the European Agency for Reconstruction. For more information, contact Lejla Dervisagic at Lejla.DERVISAGIC@coe.int.

From International Journalist's Network, 1 February 2005

Howard Expresses Faith in Power of Government

Michael Howard has said he has faith in the power of government to "make a difference for the better". In a speech on Thursday, the Conservative leader also said that he viewed himself as - "more than anything" - a public servant. The comments came as he paid tribute to the hard work of public sector professionals. Speaking at a conference organised by the Guardian, Howard added that the government should give more responsibility to nurses, doctors, teachers and police officers. "I know you wouldn't expect me to count the Guardian as my favourite morning reading," he said. "But then you wouldn't have expected Nixon to go to China, De Gaulle to decolonise Algeria or Margaret Thatcher to be the first western leader to sound the warning on global warning." Howard said that it was a curiosity of politics that "it is often Conservatives who are the real radicals". "Time and again it is politicians from the centre right who can see where an old consensus no longer works and liberate people to establish a new one," he said. "When it comes to innovation, the Guardian has an estimable record. Not least in its coverage of the public sector. "I particularly welcome the space you devote to reporting and analysing change in our public services. "Because I think of myself, more than anything, as a public servant. "I have faith in the power of government, exercising its responsibilities properly, to make a difference for the better."

The Tory leader said that governments "don't have all the answers" but added that "if they govern with the right values, they can make a real difference". "And one overwhelmingly important value for government is honouring public service," he said. Teaching, nursing, becoming a doctor or police constable - these are noble careers. "More than that, they are professions worthy of respect." Howard paid tribute to teachers who inspire the next generation, health professionals who cure the sick and police officers who build safer communities. "We should trust these professionals to exercise their common sense and their judgement – to follow their instincts," he said.

From ePolitix, UK, 3 February 2005

Civil Servants to Vote Over Strike Action on Pensions

Almost 300,000 civil servants are set to decide whether to begin strike action next month in a row over pensions, the Public and Commercial Services Union announced today. Britain's largest civil service union said it would be balloting up to 290,000 public sector members on strike action over government plans to compulsorily change the public sector retirement age from 60 to 65. The move follows ballot plans by local government unions Unison and the T&G, which have both agreed to ballot members over local government pension changes due to come into force this April, and further proposed changes envisaged for 2008. All three union ballots will close in the second week of March, with a "yes" vote expected to lead to an orchestrated day of strike action on March 23. Other unions are expected to decide on whether to ballot for strike action over pension changes next week. Public sector unions are also preparing for a separate day of campaigning against pension changes on February 18.

The government plan to raise the pension age for the civil and public services comes just over two years after previous changes to the civil service pension scheme, and will force people to work longer to get their expected pension, PCS general secretary, Mark Serwotka, said today. The plans, which have been met with scepticism and anger by members, will also see an end to the final salary pension scheme. Mr Serwotka said civil servants were facing a "double whammy" of pension changes leading to insecurity for staff, on top of planned staffing cuts of 84,000 following the efficiency review carried out for the government by Sir Peter Gershon. · Unison general secretary Dave Prentis is consulting lawyers after the head of the local government Employers' Organisation accused him of deliberately misleading members over pension changes due to come into force this April to persuade members to go out on strike. The changes, which even the EO admits are difficult to explain, boil down to a raising of the early retirement age from 50 to 55, and an increase in the age at which staff can receive a full pension scheme.

Other proposals, due for implementation in 2008, include axing the final salary scheme to a career-based average. Unison members were consulted on both the imminent and the proposed changes, and backed the move to ballot for strike action. But Rob Pinkham, EO chief executive, emailed Mr Prentis earlier this week accusing the union of "wilfully misleading" members by telling them all the changes were coming into force this April. Mr Pinkham also approached a national newspaper to repeat his accusations. A Unison spokeswoman described the move as a smear tactic. "What [Mr Pinkham] should be doing is trying to settle the dispute, not inflame it in this way," she said. "The decision to ballot for strike action was taken by the union collectively last June, and it is outrageous and disgraceful that someone in a position like Mr Pinkham should try to fling around wild accusations like this."

Terry Edwards, EO assistant director for pensions, defended the accusations levelled at Mr Prentis, while admitting that from April eligible council workers will no longer be able to draw a full pension at 60. He said some council staff seemed to be under the impression that all pension changes were coming into force this spring. "Whether members are misunderstanding what is going on or not I don't know," he said. "But a lot of people are getting very worried." He declined to comment on whether the EO had engaged in smear tactics against Mr Prentis, but pledged to get more information out to council staff to get their own message across. "We will be issuing stuff to members explaining why the change is happening," he said.

From Guardian, UK, by Helene Mulholland, 4 February 2005

Civil Service Still Not Satisfactory

Milan - For the Italians 'public' still has a value, but their overall opinion on civil service, meant to improve people's quality of life, is not entirely positive. People expect the civil service to improve health services, social and labour services and they would like to see a general improvement in their services with less money wasted and less democracy. That is the outcome of a survey conducted by Ipsos in January 2005 on behalf of Forum PA. There are no big changes compared with last year's survey: for many people a good quality of life depends on a good quality of public service. There was a slight drop in the number of people who prefer public services to private services ( 61 pct in 2004 and 56 pct in 2005).

The drop in 'appeal' mainly affects the 18-34 year age group. "Building up the quality of civil service to guarantee the quality of life" is the title of the Forum P.A.2005, the yearly exhibition -conference of services for citizens (Roma, 9-13 May). During the presentation the focus was on a quality civil service that works better, costs less and listens better to citizens. The meeting, moderated by the deputy director of the daily Sole 24 Ore, Gianfranco Fabi, was attended by: civil service minister, Mario Baccini, minister for Innovation and Technology, Lucio Stanca, the mayor of Milan, Gabriele Albertini, the mayor of Genoa, Giuseppe Pericu, the director of the civil service school, Angelo Maria Petroni and the director general of the Forum P.A., Carlo Mochi Sismondi. "An increase in the quality of civil service - said Baccini - corresponds with an increase in the quality of life. In order to pursue sustainable economic growth, with more work opportunities and more social cohesion, we need to produce a new form of political dynamics concerning all these issues and, as a consequence, strengthen the civil service".

From Agenzia Giornalistica Italia, Italy, 3 February 2005

Massive Civil Service Strike Ballot

Hundreds of thousands of jobcentre and benefit office workers, museum staff, driving test examiners and other civil servants are to be balloted on a series of strikes in a worsening dispute over pensions which threatens widespread unrest in the run-up to the general election. About 290,000 members of the Public and Commercial Services Union will be balloted over the next few weeks and will stage their first walkout on March 23 if they support industrial action. They could be joined by almost one million local government workers who are also being balloted for strikes in protest at changes to their pension arrangements. The PCS said it was "disgraceful" the Government was pressing ahead with controversial plans to raise the pensionable age for civil servants from 60 to 65. The union is also embroiled in a bitter row with the Government over huge job cuts in the civil service which will see more than 100,000 posts axed in the Department for Work and Pensions, Inland Revenue, Customs and other areas. Workers who could strike include those based at jobcentres, benefit and pensions offices, the Child Support Agency, museums and driving test examiners.

PCS general secretary Mark Serwotka said the union's leadership had agreed unanimously to ballot their entire membership for a series of strikes starting on March 23. The union said it was particularly angry at the refusal of ministers to negotiate on the planned increase in the pension age. "The Government must accept that the unions should be allowed to negotiate on pensions as well as other areas such as jobs. It is disgraceful that the Government is not allowing its employees any choice in these crucially important matters but forcing them to work an extra five years." The union is confident of achieving a huge yes vote for industrial action which could lead to widespread unrest across the public sector in the UK in the run-up to the election, expected on May 5.

From ic Hounslow.co.uk, UK, 3 February 2005

Women Civil Servants Earn 25% Less - and Gap is Growing

Women civil servants earn 25% less than their male counterparts, according to new government figures which show the civil service pay gap is more than double the disparity found in the rest of the public sector. At April 1 2004, the average gross salary for men and women was £18,890, with one-quarter of staff still earning £14,750 or less, figures released yesterday show. The average salary for female civil servants compared to that of men's has decreased from 78.1% in 2003 to 75% last year, despite equal pay reviews concluded by civil service departments and agencies in 2003. This compares to the pay gap in the rest of the public sector, which sees women earn 90% of the salary men take home, and casts doubt on the government's professed commitment to tackling pay inequality. The unresolved issue of equal pay has found a new lease of life recently, as MPs and even sectors of the business community are recognising the importance of pay parity across the gender divide. In a bid to appease trade unions frustrated by the slow progress being made on this issue, the government last year set up the woman and work commission under Lady Prosser to examine the gender pay gap, which is due to report this summer.

MPs on the Department of Trade and Industry select committee have decided to pre-empt the report by carrying out their own investigations into "occupational segregation" which sees a dominance of men in certain better-paid jobs and of women in lower-paid occupations. The perennial issue of pay inequality is also a key plank of the Trades Union Congress' s submission to next month's budget, in which it calls for "funding flexibility" so that ministers can "implement equal pay and other negotiated settlements" within their own departments. Business also joined the equal pay bandwagon today, by calling on the government to do more to encourage companies to conduct equal pay audits to ensure there is no discrimination against women.

The Chartered Institute of Personnel and Development (CIPD) claimed today there was a "huge" lack of awareness among employers about equal pay. It said the government should work with employers to "change mindsets" and to make sure they recognised the business benefits of paying women the same as men. Firms were also encouraged to involve line managers in pay and benefits policies to make sure money was not being wasted. Fewer than a third of firms involved line managers in developing pay strategies, research for the CIPD found. Charles Cotton, the CIPD reward adviser, said: "Reward is becoming more and more important in helping employers compete in the war for talent, as unemployment is so low. "Many employers are recognising that non-financial rewards, such as family-friendly work policies, are just as important as wages and bonuses."

From Guardian, UK, by Helene Mulholland, 8 February 2005

German Civil Servants Get New Deal

An agreement has finally been reached in the long-running pay dispute for Germany's more than 2 million federal and local public sector workers. The end is nigh for an antiquated system that ran counter to efficiency. After two solid days of talks behind closed doors and two drawn-out years of negotiations between employer groups and unions, the deal will not only establish a 39-hour work week for federal employees throughout the country, with local government workers given the possibility of agreeing to the same terms, but it will extensively and radically reform the current wage system, according to German Interior Minister Otto Schily. "What we've agreed upon is a remarkable piece of reform," Schily said. "We're replacing an out-of-date pay system and will radically modernize it with this agreement." Negotiators say the deal is a turning point that will strengthen the public sector's efficiency. The term 'efficiency' may be considered synonymous with Germany, but workers in the public sector here have a different reputation - as a result of the numerous benefits they receive, including automatic allowances based on age or marital status and subsidized wedding costs. The reforms include promoting employee productivity, more flexible work times and bringing into line the hours worked in the country's east and west. The work week had previously been 38.5 hours in the western part of Germany and 40 hours in the former German Democratic Republic.

Avoiding privatization - Chief negotiator Thomas Boehle, from the employers' association, said reaching the deal wasn't easy, but it's proof of a good working relationship between the parties involved. "We worked together extremely well and made some real progress towards the very end of the talks," he said. "And one giant step was managing to prevent the further privatization of public services." Although compromises were made by both the employer groups and union bosses involved in what they described as "intense" negotiations, both sides signaled a positive result. Frank Bsirske, head of the Verdi services union, said that besides simplifying the pay structure, the new measures will also make the sector more attractive to younger workers by increasing pay for career beginners. "In my opinion, what we have here is a rounded concept, laying the foundations for the future - with considerably more value placed on performance-related pay," Bsirske said. The new model is expected to come into effect by October and will apply for civil servants on a federal and local level for the next three years. Public sector workers on a state level are thrashing out a separate deal.

From Deutsche Welle, Germany, 10 February 2005

Protests Begin over Changes to Public Sector Pensions

Thousands of staff in schools, colleges, councils, government departments and prisons have joined rallies today in protest at changes to their pensions. Events are planned across England, Scotland and Wales starting at midday, in protest at government plans which will affect more than 7 million public servants. The day of action, coordinated by the Trades Union Congress (TUC), has been organised in response to the government's decision to push through a change to pension schemes for public servants, dubbed as "work 'til you drop" by unions, which complain that there has been insufficient consultation and negotiation on the matter. The central concern among public servants is the proposed five-year increase in the retirement age, from 60 to 65 years, which unions say will result in employees working "longer for less". Police and fire officers will retire at 55, instead of 50. Unions argued that favourable pension deals have long been seen by public sector workers as compensation for low pay and high stress levels.

TUC general secretary, Brendan Barber, called for more "serious engagement to negotiate a fair public pension deal". "Cuts in pension provision are the same as a pay cut," he said. "The government's attempt to raise retirement ages across the 7 million who work in the public sector must add up to the biggest ever pensions change." Mark Serwotka, the general secretary of the Public and Commercial Services union, said: "Today is an opportunity to push home the message to the government, the politicians and the public that public servants won't sit idly by and allow forced changes to their pension. "They won't tolerate having to work until they drop to receive their pension and they won't put up with being denied real choices about their future." The campaign is the precursor to possible strike action next month. A number of unions have already signalled plans to ballot members for strike action, while others, including the National Union of Teachers, are still gauging members' views before deciding to go ahead with formal ballots.

Two local government unions, Unison and the T&G, had stalled their ballots earlier this week in a lastditch attempt to persuade the deputy prime minister, John Prescott, to withdraw plans to introduce changes to the local government pension scheme this April. But after talks with Mr Prescott broke down last night, the unions signalled their intention to go ahead with the strike ballot. Unison said that it will now press ahead with a strike ballot of its 800,000 local government members in Britain. The ballot will close on March 9, in time for the co-ordinated strike day pencilled in for March 23. Dave Prentis, general secretary of Unison, said: "It will be a sad day for local government if the strike goes ahead. With goodwill on all sides, this dispute could still be settled. "We want the regulations to be withdrawn so that we can get into meaningful discussions about the future shape of the local government pension scheme. "Our members pay into the scheme week in, week out all their working lives, and they deserve the right to be involved in any decisions about its future and not have to face change by diktat."

From Guardian, UK, by Helene Mulholland, 18 February 2005

Top Civil Servants to Vote on Strike

Top civil servants, from ministers' private secretaries to crown prosecutors and tax inspectors, are to vote on whether to strike for the first time in 20 years over plans to raise their pension age from 60 to 65. The FDA, the top civil servants' union, said it was balloting 10,000 members on whether they wanted to join a strike planned for March 23 by other civil service unions and more than 1m council workers. In a gesture towards the close working relationship that many of its more senior members have with ministers, the union is proposing a half-day of action until noon, rather than the full day walk out planned for the rest of the civil service and in council offices. If the vote goes in favour it will be the first strike by senior civil servants since 1984. Jonathan Baume, the FDA's general secretary, said: "We are not seeking to bring the government to its knees." But there was a "genuine sense of grievance" over the plans to raise the pension age and replace the civil service final salary scheme with one based on career average earnings.

The union recognised that rising life expectancy required a "serious public policy debate about the sustainability of pension schemes". But changes should result from dialogue and debate, not a "government diktat" that would see its members "coerced" into a career average scheme that would disadvantage many high performing civil servants. Members joined with the expectation of a decent pension in return for lower salaries, and the "government is in danger of tearing up the moral contract with senior managers at the very time that they are expected to lead the government's ambitious programme of public sector reform". Mark Serwotka, general secretary of PCS, the largest civil service union, whose members started receiving ballot papers yesterday, said the government was "courting confrontation with its own workforce" by compulsorily raising the pension age and refusing to negotiate on the issue.

From Financial Times, UK by Nicholas Timmins, 23 February 2005

Separate Civil Service for Scotland 'A Possibility'

Scotland's most senior civil servant has promised to create a separate civil service north of the Border, if a future Holyrood administration demanded the change. But John Elvidge, the permanent secretary at the Scottish Executive, stressed the move would have to be approved by the Westminster government, which has retained control over the civil service. And in an effort to avoid being dragged into political controversy, Mr Elvidge, who is proud of the civil service's impartiality, refused to say whether he supported splitting Scotland's public servants from their Whitehall colleagues.

However, his frank remarks demonstrate a willingness to contemplate a policy which his predecessors, who have fiercely defended the idea of one UK civil service, were unwilling even to contemplate. In an interview for The Scotsman's new Government and Public Affairs pages, Mr Elvidge said he may have to work for an Executive in the future - possibly a Lib Dem-Nationalist coalition - which favoured a change. Asked what he would do if a new administration told him it wanted a separate Scottish civil service, he said: "Just like any other set of ministerial policies, if that's their policy then that's what we shall deliver." Mr Elvidge's remarks sparked a new debate over the civil service at Holyrood, where SNP and Liberal Democrat MSPs backed the idea, though it was opposed by most Labour MSPs. John Swinney, the former leader of the SNP, said: "This is a very welcome clarification of the position by John Elvidge - that it is entirely practical to have a Scottish civil service."

From Scotsman, UK. by Peter Macmahon, 25 February 2005

Plan Could Shift 30,000 Federal Bureaucrats, Union Warns

Ottawa - The federal government is planning major changes in the way it serves Canadians, a move that could shift thousands of bureaucrats from big cities to smaller centres at a cost of hundreds of millions of dollars. CBC News has learned that Ottawa is considering consolidating its services under the banner of Services Canada, the tentative name for a super-agency that has been two years in the making. It would provide one-stop shopping for Canadians who need everything from jobs to employment insurance forms to passports to health services for veterans. Nycole Turmel, president of the Public Service Alliance of Canada, said the spectre of the sweeping changes is already making people nervous. "It could affect between 10 and 30 thousand jobs inside the public sector," said Turmel, whose union represents more than 80,000 government workers, many of them in the Ottawa region. Turmel was leaked a draft copy outlining the plan, which – if it goes through – would be one of the biggest re-alignments of federal services ever seen in the country.

In a strategy outlined in draft budget documents shown to CBC, the federal government would relocate thousands of bureaucrats from departments like Human Resources and Skills Development over the next two years. The workers most affected would be those staffing urban call centres, job centres and data-processing centres. Their jobs would be relocated in small regional centres instead. The scheme has an ambitious timeline, if the Liberals go ahead with it. It would start on April 1 of this year and be fully implemented by 2007. Treasury Board President Reg Alcock tried to reassure public servants who may be worrying about their jobs, saying that no decisions have been made. "Anything that will cause any impact on public service, should it happen, I can assure you the public service will be treated with great respect and in accordance with the agreements we have." Government planners said the changes would improve services while cutting costs in the long run. However, a senior government source says starting up the new department would cost hundreds of millions of dollars.
Some provincial governments have already moved to this approach to deliver their services. Service New Brunswick, for example, provides more than 200 services including driver's licence renewals, land registry changes and property tax payments.

From CBC Montreal, Canada, 12 February 2005

Cost of Redesigning Civil Service Raises Questions

Ottawa - Opposition members of Parliament want to know the price tag on a project that will change the way 30,000 federal bureaucrats do their jobs. Government sources have told CBC that the new agency, Service Canada, would save billions of dollars in the long run but would cost hundreds of millions to set up. The Liberal government wants to create a single point of contact for all government services, from tax advice to passports to job assistance. A key part of the plan is relocating thousands of civil servants from call centres and data-processing sites in cities like Ottawa to smaller cities and towns across the country.

New Democrat MP Ed Broadbent represents the riding of Ottawa Centre, where many civil servants based in Ottawa live. Despite that, the veteran politician says streamlining government and placing more jobs in the regions could be a positive move - if the price tag makes sense. "There has to be a cost-benefit analysis done to make sure it makes sense to taxpayers across the country," said Broadbent, a former leader of the NDP. "We have a Veterans Affairs [headquarters] in P.E.I. because it was a Liberal political decision to benefit them," he said. "We have a taxation centre in Shawinigan," the hometown of former Liberal prime minister Jean Chretien. "Too often these decisions are just political and there is no benefit to the taxpayer." The plan is tentatively due to be rolled out starting this spring, with full implementation within two years.

Lead bureaucrat once helmed gun registry - The person in charge of the Service Canada pilot project has been associated with some expensive government ventures in the past, including the federal gun registry. Maryantonett Flumian was appointed chief executive officer of the Canadian Firearms Centre in 2000. Under her watch, the gun registry's costs ballooned to more than a billion dollars and became the subject of a scathing report by Auditor General Sheila Fraser. Flumian now serves as associate deputy minister of Human Resources and Skills Development.

From CBC News, Canada, 14 February 2005

Reform Groups Warn Federal Ethics Agency Not to Weaken Ethics Rules

Proposals to Gut Personal Financial Reporting Requirements for Senior-Level Government Employees Raise Conflict of Interest Concerns -
Washington - A non-partisan, ideologically diverse coalition of 10 reform groups has submitted testimony to the Office of Government Ethics (OGE) urging the agency not to weaken personal financial disclosure requirements for senior-level government employees. The coalition consists of Public Citizen, Common Cause, the Center for Responsive Politics, Democracy 21, Citizens for Responsibility and Ethics in Washington (CREW), Center for Corporate Policy, Public Campaign, OMB Watch, the Campaign Legal Center and Judicial Watch. The Bush administration and its congressional friends don't want a full and thorough evaluation of appointees and therefore want to dump a number of the current financial reporting requirements, which would allow nominees, appointees and senior-level officials a great deal of secrecy regarding their finances.

The OGE is considering capping the reporting of personal wealth at $2.5 million, not requiring the disclosure of the itineraries of trips paid for by special interest groups, and allowing officials to omit the dates of major stock transactions from financial reports. "Cutting back on the personal financial disclosure requirements of appointees is being offered as'streamlining' the process, but this is entirely the wrong way to address the problem," said Frank Clemente, director of Public Citizen's Congress Watch. "It is really nothing more than an attempt to cloak the sources and amount of wealth of senior-level officials." The coalition has warned the OGE that its proposals for gutting the personal financial requirements will hide important financial records that could reveal relationships between senior-level government employees and business interests that create conflicts of interest – all the while providing very little time-saving benefit to the appointment process. The groups called for:

Maintaining the disclosure requirements of wealth held by government officials up to and exceeding $50 million, an amount frequently held by top presidential appointees, instead of capping disclosure at $2.5 million. Maintaining the requirement to report all dates of major stock transactions so as to flag potential insider trading by officials knowledgeable of pending government contracts. Publishing requests and approvals of waivers for officials seeking outside employment so that Congress may be aware of possible conflicts of interest when these officials are negotiating legislation. Placing these financial records on the Internet through an electronic reporting system. "Right now, not enough financial information about government officials is reported to the public," said Craig Holman, legislative representative for Public Citizen. "Stories abound of scandal between government officials and private businesses, including the somewhat murky story of the business relationship between Vice President Dick Cheney, who is helping lead the war effort, and his business interests in Halliburton Co., a major recipient of government defense contracts."

Following a legislative effort last year by House Republican leaders to weaken the personal financial disclosure requirements of national security officials in the intelligence reform bill (H.R. 10), an effort that was unsuccessful because of congressional and watchdog group opposition, the final House-Senate conference agreement instead required further study of the issue by OGE. The groups' written testimony was submitted by Friday's deadline at the request of OGE as part of the study.

From Common Dreams, 14 February 2005

Africa Seeks Karnataka's Help in E-governance Projects

Namibia has expressed interest in replicating some of the Karnataka's e-governance projects like registration of land and vehicle records and online treasury system in the African country, state IT secretary M K Shankaralinge Gowda said today. "Namibia is interested in replicating several successful e-governance projects of the state," Gowda told reporters after a four-day interaction with diplomats from nine African nations, who were in the state on invitation from former Prime Minister H D Deve Gowda. Namibia's High Commissioner to India Major General Charles D N P Namoloh, he said, was keen in learning India's experience in e-governance and wanted to replicate the projects in the African nation. Gowda said the African diplomats were also interested in providing citizen centric services such as e-seva operational in Andhra Pradesh. Tunisian ambassador Elyes Kasri said Indian IT firms can use the talent in Africa for offering BPO services in French, Italian, Spanish and German to European countries. He also invited Indian hospitals to set up operations and offer healthcare to African nationals, besides high-end facilities to visiting Europeans and Americans.

From New Kerala, India, 3 February 2005

President Launches E-government Project

President Yahya Jammeh, on Tuesday, launched the Electronic government (E-government), a system facilitated through the use of information, communication and technology (ICT), initiated by the department of state for Communication Information and Technology (DOSCIT). In his launching statement delivered on his behalf by Vice President Isatou Njie-Saidy, Jammeh described the initiative as a significant milestone in The Gambia's information age. He noted that the effective use of information and knowledge could be a key factor to socio-economic growth. "A nation's capability to socio-economic development and to gain global competitiveness and improve the well-being of its people, depend very much on the extend to which it can develop, use, explain and sell information, knowledge and technology in one form or the other," he said.

President Jammeh highlighted the vitality of the use of ICT in bridging the gap between the developed and developing countries. He said his government would ensure that every Gambian gain access to ICT services and that "ITC is no longer a luxury for the elite but an absolute necessity for the masses." He said that government will continue to adopt legislations; policies and human resource programmes that will assist The Gambia become a key player in the information world. The SoS for ICT, Dr Amadou Scattred Janneh, said the protect would link all government departments which he said would make government service accessible and transparent. He expressed hope that the citizenry will also benefit from the project. He commended the private sector and called on other players in the information system to come on board.

From Daily Observer, Gambia, by Ramatoulie Charreh, 25 February 2005

National E-governance Action Plan Drawn: Maran

The Centre has drawn a national e-governance action plan covering all the three tiers of the Government with the objective of 'turning the power of Indian information technology inwards' and transforming the country into one of the most competitive nations globally, Communication and IT Minister Dayanidhi Maran said on Thursday. "The most important attribute of this plan is its singular focus on the citizens," Maran said while inaugurating the 8th national conference on e-governance. The plan envisages access by all citizens to Government and private services from their own villages or towns apart from giving access to economic opportunities both within the country and globally, he said. Emphasising that the Common Minimum Programme of the UPA Government at the Centre envisaged promotion of e-governance on a massive scale, he said the programme incorporated numerous mission mode projects mainly stressed on improving service delivery to citizens and businesses. These projects were being taken up both by the Centre and the states for country-wide implementation in a phased, time-bound manner over the next three to four years. Chief Minister Naveen Patnaik and Orissa's Minister for Energy, Tourism and IT, Suryanarayan Patra also attended the three-day conference.

From Hindustan Times, India, Press Trust of India, Bhubaneswar, 3 February 2005

Significance of E-governance

E-governance is a fact of life in many countries of the world today, specially in the developed countries. Dependence on computers to store data, make available such information or data to members of the public, for the government's own transparency, accountability and greater all-round efficient functioning, for all of these purposes and more, increasingly the significance of computerisation and its benefits are getting recognition also in the developing countries including Bangladesh. Understandably, the general conditions of backwardness put some limitations on the greater or wider use of commuters in this country. But this need not be the case in the limited number of government offices. Extensive use of computers in this limited domain can, nonetheless, attain much improvement in the running of the civil services when the services are found typically burdened by the inefficiencies and corruption due to the system of their manual operation.

For instance, computerised maintenance of records and the difficulties posed in tampering with them, led to notable improvement in the functioning of the Bangladesh Road Transport Authority (BRTA) offices where this mode of record keeping was introduced some years ago. It should be possible to achieve similar efficiency in record keeping and remove corruption at the offices where land records are kept with the use of computers. Similar uplift can be experienced in the courts where records are currently spoiled, manipulated and abused like at no other places probably to favour the perpetuators of such activities. Very effective use of computerisation can come from its application in the customs administration where human handling leaves the scope for huge corruption or bribery and the consequent evasion of duties. Not only in the above services, the use of computers can help to bring positive advances in all spheres of governmental activities.

E-governance is not in contemplation stages in Bangladesh. It was adopted as policy and implementation of a plan started from 2002 to make government officers and employees skilled in the use of computers. But that well-intentioned programme appears to have made insufficient progress. Reportedly, only 28 per cent government officers and 29 per cent of employees have learnt the use of computer although desktop computers grace the tables of large number of potential users in government offices. Many of them consider the computer more like an official embellishment than as a tool to be compulsorily and gainfully used. Officers and men who fail to become computer literate or more than that, as required, must be served with notices to acquire the necessary know-how by a certain date or face penalties. They should have access to appropriate training for the purpose.

From The New Nation, Bangladesh, 2 February 2005

Energize E-government Now

Beijing - More efforts are needed to upgrade government websites, says an article in the Workers' Daily. An excerpt follows: The municipal government of Zhengzhou, Central China's Henan Province, published an assessment of local government websites last month. According to the report, 14 of its 91 government websites scored a zero. Besides poor accessibility, the report found that lack of content, updates and interactivity were all major problems. These are also the common faults of many government websites throughout China. Quite a number of government institutions are not accustomed to serving the public through the Internet and other digital means. Under such circumstances, e-government is being treated as a political assignment and not a tool to better serve the people.

Government employees should alter their attitudes and improve the service. E-government is crucial to constructing an open and transparent government. As a window to the central authorities, websites should offer the public the most convenient access to government information and services. The Internet has become an important forum of public opinion. But a number of local governments have made their websites a place of publicity and not an avenue for listening and responding to the public. Interaction between government departments and the public is not yet adequate. What's more, e-government is a must for improving administrative efficiency. The popularity of the Internet and on-line services beat traditional measures due to their speed, transparency and convenience. Since the Government Online Initiative was launched in 1999, there have been more than 10,000 government websites set up in China. But there is still a long way to go before their services are up to scratch.

From Xinhua, China, 7 February 2005

E-governance Spending up 60% in Fiscal Year 2004: Study

E-governance spending in India is estimated to have grown by 60 per cent to $480 million in fiscal 2003-2004 from around $300 million in 2002-2003. A study conducted by Indian Market Research Bureau (IMRB) on the state of e-governance readiness in various central ministeries and departments found that India was at the threshold of ICT initiatives at the government level with several structural changes in the existing process of governance already underway. The firm studied the efficiency of usage of IT based on the following indicies - IT preparedness, IT policy, people, IT and infrastructure and processes and IT benefits/competence acheived. The key findings of the study were in terms of e-governance preparedness. About 61 per cent of the central ministeries and departments were found to have a precise defination of e-governance and defined it as a creator of a simple, moral, accountable, responsive and transparent (SMART) government.

Twenty-six ministeries and departments scored 128 out of 128 on e-governance, 55 per cent of the ministries and departments considered IT as one of the key areas where performance was regularly monitered by the top officials and 59.4 per cent of the central ministries and departments claimed to have created a well documentated IT action plan/policy guidelines. Most ministries and departments had completed their basic automation in terms of PC, printers, scanners etc. IMRB study indicated that though India was currently at the first stage of e-governance readiness but levels of adoption are fairly high and were increasing rapidly.

From Business Standard, India, 16 February 2005

Regional Seminar on E-government Opens in Ha Noi

Ha Noi - More than 100 delegates from over 20 member countries of the Asia-Pacific Tele-community (APT), Vietnamese relevant ministries and branches, and local and foreign IT companies are attending a two-day regional workshop on e-government in Ha Noi. During the seminar, jointly held by the Ministry of Post and Telematics and the APT, participants will be discussing a strategy and activities to build an e-government model, the participation of private sectors in the building of an e-government, as well as the integration of IT into everyday activities. The workshop, which will close on Feb. 25, is being viewed as an opportunity for local and foreign managers and businesspeople to exchange information and experiences in this field in order to find suitable solutions for respective countries, and particularly to learn from the successful e-government models in Japan, Singapore, and the Republic of Korea. According to IT experts, e-government is one of the most important IT application fields and has attracted much attention from governments all over the world. IT application will help governments improve the effectiveness and quality of their administrative services.

From Viet Nam News Agency, Vietnam, 24 February 2005

Twenty Billion Viet Nam Dollars to Develop E-government

Ha Noi - A total sum of 20 billion VND will be spent to develop an e-government system in Viet Nam in 2005, said officials at a two-day regional seminar on e-government in Ha Noi. More than 100 delegates from over 20 member countries of the Asia-Pacific Tele-community (APT), Vietnamese ministerial and branch officials, and local and foreign IT companies attended the conference. The building and launching of the e-government, which has been ongoing since 2001, has seen initial successes so far, according to foreign experts' evaluation. During the seminar, jointly held on Feb. 24-25 by the Ministry of Post and Telematics and the APT, participants discussed a strategy and activities to build an e-government model, the participation of the private sector in building an e-government, as well as the integration of IT into everyday activities. The seminar is being viewed as an opportunity for local and foreign businesspeople to exchange information and experiences in this field in order to find suitable solutions for respective countries, and particularly to learn from the successful e-government models of Japan, Singapore, and the Republic of Korea. According to IT experts, e-government is one of the most important IT application fields and has attracted much attention from governments all over the world. IT application will help governments improve the effectiveness and quality of their administrative services.

From Viet Nam News Agency, Vietnam, 25 February 2005

E-Government - Korea Emerges as E-government Leader

At the end of 2004, the Korean government heard the good news from the United Nations that its status as an electronic government had jumped to fifth place from 13th in 2003. "The Korean central services portal (http://www.egov.go.kr)... is definitely one of the world leaders in tightly integrating online government services," the U.N. report said. According to the 2004 e-government readiness rankings, the United States came in first, followed by Denmark, the United Kingdom and Sweden. The annual report says, "The E-Government Readiness Survey 2004 assesses... how willing and ready the governments around the world are to employ the opportunities offered by Information and Communication Technology to improve the access, and quality, of basic social services to the people for sustainable human development." In referring to Korea, the report said, "A total of 393 services can be accessed online - from the initial application to the electronic issuing of results." It added, "While the site clearly focuses on services, including transactions, it also features a host of everyday information such as up-to-date news, calendar or upcoming events, archived information, useful links and citizen feedback mechanisms."

In Korea, the Government for Citizens or G4C project was established to provide user-friendly government services without the constraints of time and space, improving administrative productivity with lower costs and higher efficiency. The G4C system allows people home access to the civil service through the Internet, as well as offering other programs on tax, insurance, education and digital signature services. "The G4C Project aims to establish an electronic channel for government services to the public along with the system for sharing information among agencies," a report from the Ministry of Government Administration and Home Affairs said. The project helped reduce the bothersome process of obtaining official documents. The report said, "Previously people were dissatisfied with the way government services and information are delivered, because it took long hours due to the complicated procedures. It is often necessary to submit various verification documents, requiring service applicants to visit several agencies to obtain them."

Background - The Korean government's initiative on e-government is based on the explosion of Internet since the mid 90's in the nation. As of last year, the number of people using the Internet reached 31 million, approximately 70 percent of the total population. "This indicates the potential demand has grown up enough for electronic delivery of government services and information to citizens and businesses," a government report said. "As people become aware of the power of the Internet and experience good service in the private sector, they will become less tolerant of poor service in the public sector. If people can buy an airplane ticket over the Internet, they will want to get the citizenship certificate issues the same way," it said. The unique culture of PC Bang or public PC room accelerated the penetration rate of the Internet. The high speed Internet can be easily accessible for a meager 1,000 won per hour on average everywhere. "Rapid growth of the 'PC bang' industry had been due, in part, to an economic crisis in 1998, when many young people had been forced to be out of jobs. New business opportunities were searched for and created by Internet," the report said.

High speed Internet companies have allied themselves with companies who build apartments. "Construction companies have enjoyed incentives provided for apartments with high-speed Internet access," the report said. "Communication carriers also have been able to find business opportunities to put cables underground to apartment complexes where there are enough potential customers within a compact area." The stiff competition among dot-com companies also contributed to the spread of the Internet as they provided services favorable to customers, including free email services. "Email communications have become popular even to primary school students. They are heavy Internet users, sharing information among their classmates and teachers on homework and after-school activities," the report said. Government officials thought that given that the rapid development of Information Technology and Communication, it was never too early to start building e-government. "We had a kind of fear that failure to build an information infrastructure would hurt the Korean government to the point that it might not be able to compete in the global context, leaving the nation farther behind developed countries," the report said.

Objective & Task - In the future, the Korean government will keep on making strenuous efforts to build one-window portals which provide services according to events which affect people's lives. "We need to pay attention to life-event portals which focus on certain life situations like birth, marriage, retirement, building a house, starting up a business, and so on," the report said. "Information and services can be aggregated and presented to citizens as life events." Previously, Web applications used to be simple collections of links to related Web sites. Government portals have been designed and organized based on the structure of governmental bodies, not on the stream of life-cycle events from the point of a user's convenience. Therefore, by browsing the life-event portal provided by the G4C, citizens can easily apply for various public services and obtain related information, with fewer trips to government offices and with less verification documents submitted.

The government introduced four tasks to be a world leader of e-government as follows: - The first task is the establishment of government portal sites so that civil services can be provided anytime and anyplace. They are arranged systematically following the life-cycle or sequence of events as a matter of convenience. This map is to play a role of navigator for site visitors. - The next task prepares the framework for information sharing where an integrated system is to be established for information groups in the five sectors. When information is shared across governmental bodies, they cannot only increase convenience, they can also avoid the need to enter data multiple times, thus reducing errors involved in data input. - The third task is to build up infrastructures such as electronic authentication and electronic payment. This includes the establishment of public key infrastructure that prevents forgery and falsification of issued documents, development of DTD (data type definition) for electronic documents, and construction of a DB security system to detect intrusion, hacking and information drain, etc.
- The last task involves revising laws and regulations so they are able to meet the conditions of online delivery of services and information. Many codes of laws and regulations had been identified to be updated, encouraging information sharing among government bodies, verifying the legal status for electronic documents. Laws and regulations are to be revised so that they do not unintentionally interrupt the successful implementation of the project.

From Korea Herald (subscription), South Korea, 28 February 2005

E-Government: Singapore's Vision and Practice

Singapore - Ranked among the world's top three e-Governments by World Economic Forum in 2003, Singapore adopted the vision of e-Government even some two decades ago and has since paved the way on under the direction of several action plans.
The island state started its efforts towards a mature e-Government from the computerization in the public sector in 1980 as the Civil Service Computerization Program (CSCP) aimed to improve operational efficiencies in government departments and agencies. Along with the rapid evolutions of the information and telecommunication technologies in the past decade, the concept of service delivery has been undergoing significant changes. Taking advantage of its advanced IT industry and bearing the fruit of the CSCP, Singapore launched the first e-Government Action Plan in 2000 with a customer-oriented approach to delivering public services.

The four-year plan, which consumed the government 1.5 billion Singapore dollars (about 920 million US dollars), mandated the public sector to create integrated electronic services to the citizens and echo to their needs with feedback at an "Internet speed". New infocomm technologies were emphasized in the plan in creating, delivering and upgrading e-services by the public sectorso as to enhance the capabilities and capacities of an e-Government and bring about an e-based society in the digital economy. To realize these goals, a high-level e-Government Policy Committee has been formed for the purposes of coordination and supervision, while the Ministry of Finance and the Infocomm Development Authority of Singapore (IDA) have been contributing financial and technical management respectively.

In the infrastructure front, as smooth and satisfactory e-service delivery involves complicated interfaces among different government departments, which may be using different computer systems, the private sector has been playing a key role in this aspect. Taking Ecquaria Technologies, a local software company, as an example. According to its portfolio on the website of the International Enterprise Singapore (IE Singapore), Ecquaria is thechief architect that designed the entire Public Service Infrastructure (PSi) solution and has successfully implemented a number of e-Government projects in the island state. Among the projects was the business licensing requirement system. Thanks to Ecquaria's solution, any Singaporean who wants to start a business may get all the necessary information and evenhave his license application done online with but a few clicks of the mouse, instead of laboring to go to various government departments.

This is just part of the convenience the e-Government has presented to the people. Based on the PSi, a round-the-clock eCitizen Portal enables Singaporeans to interact with the government on a wide range of matters through a single Internet access point. The IDA figures showed that the monthly hit rates of the portalhave increased from 240,000 in October 2001 to 14.4 million in June 2003, or, four times of the country's total citizen population. Further, the Singapore Personal Access (SingPass), launched twoyears ago, enhanced the security of e-service transaction by requiring the user ID and password for the access. For businesses, e-Government means not only time-saving, but also less charge. For instance, the fee for incorporating a new company has been cut from at least 1,200 Singapore dollars (about 736 US dollars) with manual processing to a flat amount of 300 Singapore dollars (about 184 US dollars) through e-service, while time required shortened from two days to two hours. As Singapore has adopted the second e-Government Action Plan for 2003 to 2006, the government hoped to forge an e-lifestyle, with which a networked government would connect its citizens closer by including them in the policy making and review process through virtual communities, as well as deliver accessible, integrated and value-adding e-services to both individuals and businesses who prefer online transactions.

From Viet Nam News Agency, Vietnam, by Wang Jianxin, 28 February 2005

Local Councils on Track to Meet E-gov Targets

Local authorities in England expect to meet Tony Blair's target of delivering 100% of services online by the end of this year, according to local e-government minister Phil Hope. The Implementing Electronic Government statements, submitted by every council in England, showed they were on track to meet the e-government target, set by the prime minister in 2000. With this achievement, authorities are now expecting to deliver savings £1.2bn in efficiency savings by 2007/08, Hope said. The average council is now 79% e-enabled and expects to meet the December 2005 target, the IEG statements showed. "In more than 100 councils, citizens can already go online to submit planning applications, check their council tax balance and calculate their benefits entitlement," Hope said. "Our challenge for the next 12 months is to drive through the full benefits of e-government to help build the efficient and effective local councils that our communities deserve." The minister now expects £121m efficiency gains in 2004/05 because of local e-government. This figure would rise to £400m in 2007/08, with the introduction of e-procurement, he said. There would be a mid-term assessment of e-government progress in July 2005, he said.

From ComputerWeekly.com, UK, by Lindsay Clarke, 3 February 2005

E-gov to Cost Europe 4bn+ Euros

This year will see rapid growth in government spend on IT across Europe, according to research from IDC, as the deadlines for the eEurope Action Plan approach. For the public sector, the 2005 objective is that Europe should have "modern online public services". In 2003, around 12 per cent of total spend on IT in government went towards making government services available electronically. The research outfit predicts that by 2008, Europe will spend $4.2bn each year on e-government projects. "Western European governments are moving toward integrated e-government, which will result in an average annual growth of 10.5% of IT service spending for e-government over the next five years," said Massimiliano Claps, an analyst in IDC's public sector group. As well as tracking government IT spend, IDC has evaluated both the sophistication of the government service available online, and the readiness of the population to engage with those services.

The research reveals that a large portion of the population in Southern Europe doesn't have the technology to access the kinds of services the governments are offering, even when those services compare favourably with those on offer in the Northern European countries. Denmark and Sweden lead the pack in the terms of sophistication of the services available, and Italy is not far behind. Norway, Sweden and the UK made the biggest improvements to services available between 2003 and 2004, IDC says, while Switzerland is trailing behind. IDC suggests this could be due to the decentralised structure of the Swiss government.

From Register, UK, by Lucy Sherriff, 4 February 2005

Schemes to Boost E-government: Industry Bodies to Help Improve Government IT

The public sector IT managers' group Socitm and technology industry association Intellect launched separate initiatives in February to pinpoint gaps in government IT policy, and suggest how e-government could be improved. Socitm's e2Government programme is designed to promote efficient use of IT in local government. According to Socitm, current e-government initiatives focus too much on technology and improving access to services, while ignoring the need for back-office efficiencies. "Every project should be approached with two things in mind - improving the service for the customers and making the service more efficient," said Glyn Evans, chair of Socitm's Information Age Government Group. "E-government is no different."

Evans also called on IT chiefs in the public sector to break down the barriers between business staff and IT departments. "The business managers need to engage with their IT colleagues more and the IT managers need to talk the language of business managers more than they traditionally have done," Evans said. Meanwhile, Intellect has revealed plans to develop an "Intellect Index" framework, to identify gaps in the way government assesses technology, and to help it shape its policies for the knowledge economy. Intellect also hopes to identify a range of new indicators that the government should consider in its technology plans.

Beatrice Rogers, senior programme manager of the index, argued that the government often measures the wrong things; or measures the right things but inconsistently or with large time gaps, rendering the resulting figures misleading. "The general consensus is that government policy does not react quickly enough," commented Rogers. "Measurements inform policy, so if we measure the wrong things then we can't create the right environment to compete in this fast-changing global economy." Rogers argued that government often fails to fully grasp the business potential of IT. "There seems to be a lack of understanding of the importance of IT in facilitating all industries to provide high-value goods, services and knowledge so we can compete globally." Intellect is undertaking an analysis of gaps in the government's current data collection processes. It will publish the first index findings this autumn in collaboration with the Institute of Directors.

From VNUNet.com, UK, by Phil Muncaster of IT Week, 24 February 2005

European Union to Benefit From New e-Government Services and Your Europe Portal

Over 250 participants from all EU Member States debated the priorities for e-Government in Europe during a conference entitled "Cross-border eGovernment services for administrations, businesses and citizens" in Brussels last week. New EU e-Government services will open up access and cut red tape for the free movement of people, goods and services across Europe. Though some hurdles must still be overcome to reach this ambitious goal, a blueprint for the future technical infrastructure of eGovernment in Europe was presented at the conference. The European Commission also presened its new IDABC programme, which aims to improve the efficiency of European public administrations. Commission Vice-President Guenter Verheugen commented: "Businesses and citizens are the core target groups for the new EU eGovernment services. In order to revitalise the Lisbon agenda we need modern public services that eliminate unnecessary bureaucracy".

The discussions at the conference focussed on: - Means to seize public procurement opportunities in other Member States. - A reduction of the flow of the paper documents to improve the efficiency of trade procedures. Paper administration is estimated as one of the major challenges to the international trade. According to World Trade Organization (WTO) 7 – 10 % of the total value of the global commerce (i.e. about 400 billions USD) is spent in the process of document exchange that accompany the respective deals. - How e-Government will make life easier for mobile workers to deal with their social security rights (insurances, pension rights etc.). Citizens abroad (tourism, working, studying, etc.), would have easy access to health services.

The Your Europe web portal was presented as a first step towards this new generation of e-Government services. Your Europe offers already now easily accessible information and services to those mobile citizens and businesses who wish to take full advantage of their European rights and opportunities. IDABC is a Community programme managed by the European Commission's Enterprise and Industry Directorate General. It uses the opportunities offered by information and communication technologies to encourage and support the delivery of cross-border public sector services to citizens and enterprises in Europe, to improve efficiency and collaboration between European public administrations and to contribute to making Europe an attractive place to live, work and invest. To achieve its objectives, IDABC issues recommendations, develops solutions and provides services that enable national and European administrations to communicate electronically and offer modern public services to businesses and citizens in Europe. The programme also provides financing to projects that address European policy requirements and improve cooperation between administrations across Europe.

From PublicTechnology.net, UK, 20 February 2005

Dubai School of Government Puts Forward Emirate's e-Government Experience at UNDP/OECD Jordan Summit

Dubai School of Government (DSG) today presented Dubai's experience in e-government reform as part of a UAE delegation to a joint United Nations Development Programme (UNDP) and Organization for Economic Co-operation and Development (OECD) regional governance conference at the Dead Sea, Jordan. Held under the patronage of His Majesty King Abdullah II, the conference launched a three-year programme on "Good Governance for Development in the Arab Countries" (GfD) following the resolutions of the sixteenth Arab Summit in Tunis, 2004. "The UAE was among six Arab states that agreed to host and coordinate activities under the GfD programme, Dubai having been singled out as a regional leader in e-government, administrative simplification and regulatory reform," Nabil Al Yousuf, Executive Director, Dubai School of Government , said today.

"The UAE delegation here today represents a cross-section of government bodies in the Emirates. We have presented Dubai's experience in the e-government sphere of public management to further the conference's objective of sustained regional growth through strengthened good governance based on the rule of law, transparency and accountability, as well as increased citizen participation," Al Yousuf continued. "The DSG will play a leading role in the ongoing coordination of the GfD programme on behalf of Dubai and the UAE." The UAE delegates included, Mahmood Al Bastaki, Acting Director, Dubai eGovernment, Tareq Loutah, Director, Trade and Industry Development Department, Dubai Chamber of Commerce and Industry, Mansour Al Awar, Director, Total Quality Management, Dubai Police, Ahmad bin Hmaidan, IT Director, Dubai Department of Justice, Tareq Ibrahim Al Kassim, Director, Criminal Cases Department, Dubai Department of Justice, and Mohammad Aal Saleh, Director, Expertise and Disputes Settlements Department, Ruler's Court.

The conference brought together prime ministers, ministers and regional senior government officials, representatives of Arab regional organizations, civil society organizations, the private sector, media and experts from OECD member states and the UNDP. Other Middle East countries presenting their experience in areas of the GfD initiative include host country Jordan, addressing the subject of "The Role of the Judiciary and Enforcement of Judgments", and Morocco on "Civil Service and Integrity". Lebanon will be showcasing its experience on "The Role of Civil Society and Media in the Reform of the Public Sector", Egypt on "Governance of Public Finance", and Tunisia on "Public Service Delivery".

Launched last year at the directive of H.H. General Sheikh Mohammed Bin Rashed Al Maktoum, Crown Prince of Dubai, UAE Minister of Defense, the Dubai School of Government, in cooperation with Harvard University's John F. Kennedy School of Government (KSG), is dedicated to enhancing public sector management in the region by developing talented leaders through exchange of ideas and knowledge sharing. Dubai School of Government has also planned an extensive schedule of executive education programs in the area of public sector management for regional decision makers; forums and conferences aimed at knowledge exchange on current public policy issues; and distinguished lectures where world leaders share expertise.

From AME Info, United Arab Emirates, 7 February 2005

E-government A Step closer With Introduction of 50 New Automated Services

For the first time in Kuwait, services offered by eight state institutions would be available for the public through automated systems and the internet as part of the shift towards e-government at the Info-Connect 2005 exhibition. Secretary General of the technical apparatus in charge of automation of state services Abdellatif Al-Sraye told KUNA Monday that automated services by the ministries of interior, education, justice, and health as well as the Civil Service Commission, the Public Authority for Civil Information, Kuwait Municipality and Kuwait Institute for Scientific Research (KISR) are now available through the state's e-services website. The services on the website include maps and indication of location of all state institutions and ministries, he said. As to the objective behind participating in the exhibition, Al-Sraye said this is a means to introduce society to the possibilities and further promote the concept of e-government. Specialists also get the opportunity to see the latest in technology and systems in the field, he noted.

Other than introducing the services, the staff at the exhibition are handing out surveys to assess the public's response and take input in order to improve service in the future. The State of Kuwait set up a National Committee and charged it to integrating technology and internet applications into state services and the committee is headed by His Highness the Prime Minister. Among the committee's duties is drafting the state's e-government strategies. The Info-Connect 2005 exhibition kicked off Saturday, February 5th and lasts till February 11th. Over 70 bodies and companies specialized in e-services are taking part. The government e-services team is present to receive inquiries and demonstrate use of the services through the internet both in the morning and evening hours.

From MENAFN, Middle East, 7 February 2005

Pact of Consultancy Services on E-government Laws Signed

Muscat - An agreement providing for consultancy services for the development of e-legislation to support Oman digital society and e-government initiative was signed yesterday by Mohammed bin Nasser Al Khusaibi, secretary-general at the Ministry of National Economy and head of the executive committee following up implementation of the national information technology strategy. The agreement was signed with Said Al Shahry Law Office, which is in partnership for this project with the law firm Baker & McKenzie. The agreement is part of the government's endeavour to implement a national plan for Oman digital society and e-government designed to allow for a move towards electronic channels for delivering government services to citizens and the business sector. It provides for formulating in Arabic and English languages laws that regulate electronic transactions and also for comprehensive revision to the existing body of legislation to accommodate requirements of both the e-government and the broader digital society. The new body of legislations will provide legal support to Omani citizens and businesses in relation to legitimacy of digital signatures, validity of electronic contracts, roles, duties and liabilities of electronic intermediaries, privacy and security of information and consumer protection in electronic transactions. It will also provide for dealing with potential crimes associated with electronic transactions.

From Times of Oman, Oman, 5 February 2005

Government Gets Italian, UNDP Support to Use E-accounting, E-procurement Applications

Amman - The government signed an agreement with Italy and the United Nations Development Programme (UNDP) on Monday to implement and develop e-accounting and e-procurement applications for the use of several ministries. Under the agreement, the Italian government will provide $575,000 to fund the outlining of the two project's strategies. Funding will also cover "different activities to be undertaken for an in-depth analysis, determining the scope, time frames and financial requirements for full implementation of e-procurement and to support the country's public administrative reform process to set up a modern unified government-wide e-accounting system." The agreement was signed by Finance Minister Mohammad Abu Hammour, Italian Minister for Innovation and Technology Lucio Stanca and UNDP resident representative Christine Mcnab. "This project represents an essential part of the Finance Ministry's mid-term strategy [2004-2007] on financial management reform," Abu Hammour said during the signing ceremony. He added that by making all government transactions and tenders regarding purchasing supplies, equipment and services done electronically, the agreement fulfils one major goal for this strategy in terms of improving the services extended to businessmen and citizens alike.

The Italian government will provide technical assistance throughout the different phases of the project which will be implemented by Ministry of Finance through the UNDP. The Italian fund is part of the Italy's "e-government for development" initiative, which was launched in 2002 and focuses on project implementation through providing financial aid and know-how, government to government cooperation for sharing experiences and building on best practices and lessons learned from project implementation. "As the government of Jordan recognises that one of the major driving factors in the transformation of the Jordan economy is government itself as the largest producer and consumer of goods and services in the country, hence, it has identified information and communications technology as crucial for the social and economic development of the country and an ICT policy and strategy has been defined," the UNDP said in a press release. The statement explains that the government does not see e-government in isolation but rather as part of the larger structural processes of public sector and financial management reform. "Through e-procurement and e-accounting, the government hopes to streamline the procurement and accounting processes, make them more transparent, reduce transaction costs and enhance the competitiveness among suppliers for its procurement, thereby lowering the costs for procured goods and services and raising government's capacity to provide public services," the UNDP added.

From MENAFN, Middle East, Jordan Times, 8 February 2005

e-Government Policy Approved

The 2005 masterplan policy for the e-Government project was approved by the e-Government steering committee at a meeting in Dubai yesterday. Held under the chairmanship of Dr Mohammad Khalfan Bin Kharbash, Minister of State for Finance and Industry, the meeting reviewed progress reports of ongoing projects and discussed the e-Government policies, standards and processes (PSP) project. "The work that has been completed by our technical partners at Etisalat, represented by eCompany, together with the e-Government project management team from the Ministry of Finance and Industry, has been widely lauded. We call on parties involved in this project to speed up the process to meet the deadlines set for the various phases of this landmark project," Dr Kharbash said.

The 2005 masterplan will focus on core applications to increase effectiveness and efficiency of the federal government. It offers a seamless interface between the government, businesses, and citizens through a number of e-Services available through various channels, such as the internet, mobile phones, public kiosks, call centres and other dedicated service centres across the country. The plan also takes into consideration specialised training programmes to enable federal employees to meet the challenges of implementing the e-Government project. The steering committee was also briefed about the progress made on various ongoing e-Government projects. These comprise e-Projects, e-Expat, the Human Resources Management Information System (HRMIS), and the Financial Management Information System (FMIS).

From Dubai Interact, United Arab Emirates , 17 February 2005

Top United Nations Rating for Bahrain in Arab world on E-government

Bahrain tops the Arab world in e-government readiness, a UN report has revealed. The kingdom stands second only to Israel in West Asia, ahead of Cyprus and Turkey. The UN Global E-Government Readiness Report 2004 was prepared by its Economics and Social Affairs Department. The report is titled Towards Access for Opportunity. "We are proud to stand first in the Arab world in e-government readiness, following an independent survey carried out by the UN," said Central Informatics Organisation (CIO) acting president Shaikh Ahmed bin Ateyatulla Al Khalifa. Among the e-government projects which gave an edge to Bahrain over other countries are His Majesty King Hamad's Future Schools Project and the Smart Card project initiated by His Majesty, said Shaikh Ahmed.

"Other successful projects surveyed in Bahrain include the Government Data Network, which connects all government departments through a single network, and the e-voting project," said Shaikh Ahmed. The UN team carried out a survey on e-government readiness among all the member countries.The survey in Bahrain was sponsored and supervised by the UN last year and was conducted in association with the CIO. Among the world nations, Bahrain's ranking is 48. The ranking of other GCC countries: UAE 60, Qatar 80, Saudi Arabia 90, Kuwait 100 and Oman 127. The ranking of some of the other countries in West Asia: Israel 23, Cyprus 49, Turkey 57, Jordan 68, Lebanon 74, Iraq 103 and Yemen 154.

From Gulf Daily News, Bahrain, by Soman Baby, 24 February 2005

Why Kenya's Tax Policy Needs Reform

Joseph Gitau juxtaposes Ndwiga's tax waiver against duty increase on mitumba. While making observations about how our government seems to be spending money in less important areas (expensive cars for Cabinet ministers) and engaging in wasteful expenditure (the Anglo Leasing scandal), many pundits often do not realise that public expenditure is just but half of what is supposed to be the Government's major policy mechanism: fiscal policy. Any student of public finance - and our President is one of them - will tell you how university lecturers drilled into him or her the fact that fiscal policy looks at government spending, but most importantly, how it raises revenue. (This included a session in pronunciation as well; that fiscal is pronounced as "fees-core" and not "physical"!) This revenue is of course raised in many ways, ranging from taxation to donor aid and borrowing. The Kenya Revenue Authority is our main tax agency. But it is important to note that the KRA is charged with the responsibility of tax administration, and not the formulation of tax policy, strictly speaking. The power to formulate tax policy rests with the Treasury. However, the Treasury still oversees some elements of tax administration as exemplified by its involvement in the tax incentives given to Goldenberg in the 1990s, and the recent tax amnesty as well as the stamp duty waiver granted to the Cooperatives Minister.

Minister Njeru Ndwiga's tax waiver when juxtaposed with the duty increase on mitumba or imported second hand clothes raises questions about one fundamental element of a good tax policy: the issue of equity. As Adam Smith, the father of political economy outlined ages ago, a good tax policy has four main elements - which he called the canons of taxation. These elements, which must be embedded in its design, administration and implementation are equity, efficiency, economy and simplicity. While the tax waiver may not have been illegal, meaning that no laws were broken, when put in the context of the canon of equity, it may not have been the best course of action. The canon of equity in any tax system is usually based on the ability to pay, not just for the person on whom the tax falls (called the tax incidence), but on the people on whom all taxes in the country are levied (referred to as the tax burden). Equity requires that the people, or corporations, that are more able to pay tax shoulder a larger tax burden as opposed to those who are less well off.

Between the Cooperatives minister, a well-to-do government official, and the thousands of poor people who rely on mitumba, who needs a tax waiver more? Answering this fundamental question that also involves some moral and value judgment, is what equity entails. If our tax policy had no answer to this question, then perhaps the Finance minister should have looked at no less than the bible: to whom much is given, much will be required! However, it is important to keep in mind that a large part of our tax policy, especially income tax levied on formal employees, is more or less based on equity as tax rates increase when one earns more. However, an important area that needs to be looked at critically is the rate at which the marginal tax increases vis-‡-vis increase in income. For instance, if my salary increases by 10 per cent, will my tax payments increase by a rate less than 10 per cent or more? If it's the latter, then it means the tax policy becomes a disincentive for me because the more I work and earn, the more will be taken away from me.

This brings us to the second canon, that of efficiency. It basically requires the tax policy to create more incentives and fewer distortions in economic activity. Many times, we have heard investors lament that some selected taxes make it very difficult to do business in Kenya, and that business set-up and expansion is hindered by the multiple fees and charges that one has to pay. This is an area that our tax authorities need to look into if this tax component of our fiscal policy is to complement economic recovery and job creation. The canons of economy and simplicity essentially require the tax system to consume a minimal amount of the total tax collected in administration and management. They also require that procedures and compliance be easily understood.

The cost of collecting a single shilling should be kept as low as possible. Perhaps the most important aspect of tax policy is the popular maxim of "no taxation without representation." The people who are being taxed should increasingly have a say on how their money is taxed, spent and distributed. Lastly, what areas of reform exist? Perhaps the most critical is widening the tax base in order to enable more tax revenue to be collected without increasing tax levels. Widening the base might even lead to a reduction in the average tax rates. The tax amnesty that was offered by the government and administered by the KRA last June, during which over Sh4 billion was collected, did show that there is room for improvement even without increasing tax levels. This would be good for all: Kenyans would pay less tax according to their ability to pay and the government would get more revenue.

From AllAfrica.com, Africa, by Joseph Gitau of The East African Standard, Nairobi, 7 February 2005

Government Brings in New Finance Controls

The Ministry of Finance is currently introducing the Integrated Financial Management Information System (IFMIS), a complex financial management system. The system is intended to address inadequacies in the present financial management information system used in managing public financial resources and decision-making. Among the weaknesses of the current system is the inability to sufficiently support controls and transparency in financial management processes, thereby undermining the government's ability to strategically manage public financial resources. Thus, the government and its cooperating partners have designed the IFMIS project aimed at improving the acquisition, allocation, utilisation and conversion of public financial resources through the use of an automated and integrated, effective, efficient and economic information system.

IFMIS will help the strategic management of public financial resources to enhance accountability, transparency, cost-effective public service delivery and poverty reduction efforts. Through interaction with the Eastern and Southern African Association of Accountants General (ESAAG) member countries, Namibia, among other things, is able to learn best practices in IFMIS. ESAAG is a cooperation effort between accountants general, providing a forum for participants to review and discuss comparative experiences and to assist and improve government accounting systems in order to produce financial statements according to international standards. Namibia, a founding member of the 13-member ESAAG, founded in Tanzania in 1995, will host the association's Annual Conference and Annual General Meeting from 21-25 February with the theme: Transforming Pubic Expenditure Management Reforms in the East and Southern Africa Region for the 21st Century.

The conference was last year held in the Ugandan capital, Kampala, with the theme: Improving Public Accountability. According to Namibia's Accountant-General, Maru Tjihumino, the country has also been benefiting from ESAAG in terms of the yearly financial management course that it offers people for its member countries. The first Financial Management Course was held in South Africa in 2003 and covered, among others, Ethics and Accountability as well as the controversial issue of Tender and Quotations. Participants at the inaugural course identified the Management of Public Assets, Public Debt Management and Auditing and Accounting Standards as some of the issues needing attention in future training programmes.

Further, Namibia has also been benefiting from best practices from other member countries through consultancies facilitated by the association, and at its annual conferences as well as workshops hosted by its stakeholders like the Institute for Pubic Finance and Accountancy (IPFA) and the Chartered Institute for Public Finance and Accountancy (CIPFA). "Consultancy services unearthed our shortcomings in financial reporting," Tjihumino comments appreciatively on Namibia's affiliation to ESAAG. The ESAAG project was initiated in 1991 and originated from ideas that came out of the Financial Management project at the Ministry of Finance in Lesotho. The aim of the project was to develop a new financial management infrastructure for the public sector in Lesotho. As part of the project, several short study visits for senior managers were organised in the Southern African region. During this period, various treasury/accountants general departments expressed interest in cooperating with the purpose of improving the financial management performance in their own countries.

Thus a proposal was made to promote cooperation among accountants general in the region, and to establish a forum for sharing knowledge and exchanging ideas. The Lesotho Finance Ministry initiated the project proposal, which it forwarded to the Swedish International Development Agency (Sida) for funding for an Annual Conference for Accountants Genenal in East and Southern Africa. At the third conference in 1994, the accountants general resolved to establish a new association to be known as ESAAG to be funded by member fees. Each member country contributes N$25 000 annually. Member countries are Botswana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swa-ziland, Uganda, Tanzania, Zambia and Zimbabwe. Plans to expand the organisation to other regions are in the offing with Ethiopia, Rwanda and Eritrea bidding to join.

From AllAfrica.com, Africa , by New Era, Windhoek, 17 February 2005

European Union to Support Transport Sector Reforms

The Prime Minister, Ephraim Inoni yesterday received in audience members of the European Union review mission. The European Union is determined to help Cameroon implement its reforms in the transport and other sectors. This was the declaration of the leader of the European Union mid-term review mission to Cameroon, Elisabeth Tison, after an audience with the Prime Minister, Ephraim Inoni yesterday, February 17. Elisabeth Tison who was accompanied by the Ambassador of the European Union Commission to Cameroon, Peter Huges told the press that their discussion focused on their review mission which started last February 15. The audience was an opportunity for them to discuss with the Prime Minister, strategies and programmes aimed at improving performance on the transport and public finance sectors. The aim of the mission was therefore to re-launch cooperation between Cameroon and the European Union, considering that cooperation had slowed down. According to Elisabeth Tison, the European Union's institutional support will help Cameroon implement its reforms in the public finance sector.

The leader of the European Union delegation expressed satisfaction that Cameroon has re-launched dialogue with the International Monetary Fund (IMF). She stated that this will help the European Union and the IMF to work in a coherent and coordinated manner in the country. Reacting to the question on why the European Union's financial package to the country has reduced by CFA 24, 272 billion, Elisabeth Tison explained that review missions are a continuous process. During evaluation, part of the money that was not used could be withdrawn and budgeted for use in another country that has an urgent need for it. However, another package for assistance can be negotiated during the continuous evaluation of performance. As regards the road network in which the European Union has been deeply involved in the country, Elisabeth Tison said that they will help Cameroon put in place measures to maintain and rehabilitate it.

From AllAfrica.com, Africa, by Emmanuel Kendemeh of Cameroon Tribune, Yaoundé, 18 February 2005

Government Asks Public Sector Agencies to Service Their Debts Urgently

The Ministry of Finance has asked a number of state agencies to pay their outstanding debts to the government immediately to help meet government's development expenditures, sources said. "You must clear your outstanding debt service liability (DSL) soon to beef up the government's resources required for funding its development expenses," the ministry told the agencies concerned. The directive came at a high-profile meeting that was held recently at the ministry to review the overall DSL recovery performance during the current fiscal. Top officials of the respective agencies attended the meeting, an official source said. The meeting, however, expressed its dissatisfaction over the poor performances of the related organisations in the payment of DSL. It was disclosed at the meeting that at least 20 state owned organisations had paid only Tk 2.0 billion until January 2005 as against their outstanding debts of nearly Tk 15 billion.
It also observed that it had become extremely difficult for the government to fund its development expenditures due to the poor debt servicing by the organisations concerned.

Among the organisations, the Power Development Board (PBD) is scheduled to service its debts amounting to Tk 5.07 billion, an official source said, adding the PDB paid only Tk 450 million until last month. No payment was made by the Dhaka Electric Supply Authority (DESA) until January against its total debt liability of Tk 2.0 billion, according to an official figure. The debt of the Rural Electrification Board (REB) to the government was calculated at Tk 2.23 billion while the board paid only Tk 610 million, the same figures suggested. Moreover, the Dhaka City Corporation (DCC), Chittagong City Corporation (CCC) and Khulna City Corporation (KCC) made no payment as against their combined outstanding liabilities of Tk 270 million. Likewise, debt servicing by other state organisations and corporations was also poor, according to sources.

Although the ministry had set January 31 as the deadline for the agencies concerned to clear their debts, most of them failed to comply with, said officials. Another source said such debt recovery drive came in line with the government's ongoing efforts to help augment its resources, especially from the internal sources. "The government has become resource-hungry primarily because of its poor revenue collection coupled with a sharp decline in the borrowing from the public through its existing savings instruments," the same source said. The government's overall revenue earnings fell short of target by around Taka 14 billion in the first half of the current fiscal. Its net borrowing through the sales of savings certificates declined by nearly Tk 18 billion to Tk 8.85 billion during the same period over that of the corresponding period of last fiscal.

From Financial Express.bd, Bangladesh, by S.M. Jahangir, 16 February 2005

Government Raises Stakes in Public Companies


The government's holdings of shares in public services companies rose markedly last year due to increased establishments of state-invested firms, including Korea Railroad, Pusan Port and Korea Housing Finance Corp., the Ministry of Finance and Economy said Tuesday. The ministry said that the government invested 65.79 trillion won in 33 public companies at the end of last year, up 30.9 percent from a year earlier. It said the proportion of the government holdings in these public companies increased 4.1 percentage points to 77.3 percent last year from 2003. "The sharp rise was due mainly to the launch of Korea Railroad and Pusan Port, in which the government holds 100-percent stakes," the ministry said. It invested the largest amount of 15.1 trillion won in Korea Highway, followed by Korea Railroad with 8.5 trillion won and the Industrial Bank of Korea with 8.2 trillion won. It also invested 5.1 trillion won in Korea Water Resources and 4.91 trillion won in Korea National Housing.

From Korea Times, South Korea, by Kim Jae-kyoung, 15 February 2005

Korea Spends Less on Welfare

In an international report on a comparison of government spending, the Korea Institute of Public Finance said Friday that the nation's spending on the social security and welfare sectors accounted for 9.4 percent of the total government expenditure in 2002. The figure is just one-fourth of the average of 37.4 percent among 18 OECD member countries. In contrast, the ratio of expenditures on the economic sector remained high as the government spent plentifully on national investment projects, such as social overhead capital investment. The portion of state spending on the economic sector to the total expenditure stood at 25.5 percent, well above the OCED average of 10.3 percent.

From Korea Times, South Korea, 25 February 2005

Learning to Live with Deficits

Mythology has it that sage Agastya, in deference to the wishes of his wife, princess Lopamudra, decided to seek wealth from a kingdom that generated surplus revenue. He went to the wealthiest king of his time, but found no surplus in the state account which he could seek from an obliging king. The sage, along with the weathiest king, then visited several other kingdoms but couldn't find a single state where any surplus was left after government expenses had been met. His search for a state generating surplus revenue thus remained futile. The state of public finances, in essence, has remained the same since the days of the sage Agastya. Only the terminology has changed, becoming more sophisticated with the passage of time. While finance minister P Chidambaram will try to perform the onerous task of bridging the gap between revenue and expenditure, FE takes a Closer Look at the chasm and its various manifestations, like revenue deficit and fiscal deficit :

What is deficit? Deficit is basically the difference between expenditure and receipts. In public finance, it means the government is spending more than what it is earning. Government expenditure and revenue can be split into capital and revenue. Capital expenditure generally includes those expenses which result in creation of assets. Revenue expenditure is primarly that which does not result in asset creation—like interest payments, salaries, subsidies etc. Eg., expenditure on construction of a flyover will be capital expenditure, while the salary being paid to government officials supervising the construction will be revenue expenditure. Similarly, on the receipts side, whatever the government receives as taxes is revenue receipts. On the other hand, receipts which are not of a recurring nature, are generally capital receipts. These include domestic and external borrowings, proceeds of disinvestment, recovery of loans given by the Union government etc.

Is deficit financing necessary for a developing country? States often fail to generate tax revenue which is sufficient to take care of the expenses of the state, especially a welfare state. Deficit financing allows the state to undertake activities which, otherwise, would be beyond the financial capacity of the state. The concept, it may be recalled, was popularised by noted British economist JM Keynes with the aim of pump-priming a depressed economy. The basic intention behind deficit financing is to provide the necessary impetus to economic growth by artifical means. Unfortunately, the extent to which India has been practising deficit financing has gone way beyond what could possibly have been contemplated by Lord Keynes. According to the revised estimates for 2003-04, while the Plan expenditure for the year was Rs 1.22 lakh crore, the interest payment on past loans, borrowed to further the ends of deficit financing, was Rs 1.25 lakh crore. It means that India is spending less on development and more on interest payments. This explains the alarming limits to which the concept of deficit financing has been stretched by successive finance ministers.

Why should revenue deficit be eliminated? Tax is the most important source of revenue for a government. All other sources of income are secondary. Traditionally, it has been regarded as a sovereign's legitimate due. The difference between revenue expenditure and revenue receipts is revenue deficit. It means the government is unable to meet its running expenses from recurring sources income. The Fiscal Responsibility and Budget Management Act, 2003 has laid down the roadmap for a gradual reduction and, subsequently, elimination of revenue deficit by 2008-09. This will entail raising of revenue and, simultaneously, putting a check on expenses relating to subsidies, salary and pension bills, interest payments etc. After all, the government ought to live within its means.

What is the significance of fiscal deficit? The government's first task is to bridge the revenue deficit. Secondly, it must generate the resources for investing in projects and schemes of capital nature. This may include equity contribution to public sector undertakings, loans for public enterprises, and investment in infrastructure sector projects. These investments yield direct as well as indirect dividends. They also facilitate trade and commerce. The government borrows money to bridge the revenue deficit and fund developmental projects and schemes. The government, as sovereign, borrows at competitive rates from various sources which include the Reserve Bank of India, commercial banks, general public, external borrowings etc. The total borrowings used to bridge the receiptexpenditure gap is called fiscal deficit. This is measured as a percentage of Gross Domestic Product (GDP) as it may not be appropriate to compare borrowings of different years in absolute terms.

From I-Newswire.com (press release), 28 February 2005

The Finance Minister Stays Clear of 'Big Bang' Moves

On first look, Mr. Chidambaram`s first full fledged budget making exercise under the UPA dispensation is shorn of fireworks. Apart from sticking to the UPA agenda on the expenditure side with regard to increased outlays in education, health and rural infrastructure, the Finance Minister has made substantial changes in the direct tax regime, the fine print on which is yet to be investigated. The personal income tax structure has come in over for a thorough overhaul, the most significant change coming through the Rs 1,00,000 savings route across all categories of instruments (details awaited). This increase in income tax limit would put more money into the middle class family`s wallet and should either spur consumption or find its way into the capital markets. He has also left untouched key abatement areas such as interest on housing loan and mediclaim insurance. Tax proposals related to the capital markets is better than the expectations too. The widely expected increase in STT came only in non delivery trades (as understood from the speech) while at the same time the FM made a significant change by removing derivative income from the "speculative income" category which should help liquidity.

On the corporate tax side, he has now aligned the taxation rate with the individual tax at the same time, as expected, reducing the depreciation rate to 15% (20% for the first year) for income tax calculations. On balance, service industries should benefit more. As far as indirect taxes are concerned, service tax rates have been left untouched, while a few more areas (for eg: housing construction) has come to the service tax bracket. The peak customs duty has been pruned to 15% while three of the five items (tyres, PFY and ACs) under maximum excise rate of 24% has been reduced to the cenvat rate of 16%. The automobile industry could be disappointed that the duty stays at 24% along with that of aerated drinks. The finance minister has fully reengineered the petroleum customs and excise duty structure to the benefit of refining and marketing companies.

On the whole, the FM has not made any significant move here (the changes are tax neutral) but is obviously expecting the VAT implementation starting from April, 2005 to substantially change the regime. On the infrastructure side, apart from increased outlays on rural development (the Bharat Nirman thrust), there are statements on a SPV which can borrow up to Rs 10,000 crore that can bridge key infrastructure projects and can resort to India`s burgeoning foreign exchange reserves. No major statements on FDI or banking or for that matter on VAT which the FM has kept out of the budget exercise. Sectorally speaking, industries with exposure to rural infrastructure could benefit significantly apart from oil marketing companies who stand to gain from the restructured indirect tax on petroleum products. On the public finance side, the burden of the new finance committee recommendations show on the fiscal side with the numbers (the details yet to come) showing that the fiscal position there is no significant improvement.

From Myiris.com, India, 28 February 2005

IMF: Concern Over Public Finance, Approval Over Reforms

Rome - Italy is like "a glass that is neither half full nor half empty", according to the IMF which is due to publish its country report as part of Article IV, approved by the IMF Board today in Washington. Public finance is the major issue coupled "with short-term fiscal concerns". The report highlights the fact that "forecast fiscal adjustments for 2005 are too small, especially in the face of the country's limited progress with regards to the process of redressing the balance over the past few years". According to the IMF Board the Italian government's 2005 allocations may fall short of requirements in the order of "a minimum of 0.4 pc of GDP". The report however praises progress with regards to reforming the public pension system and the labour market. The consumer market on the other hand is still cause for concern. "The lack of veritable competition in key sectors of the market are obstacles to investments and growth".

From Agenzia Giornalistica Italia, Italy, 7 February 2005

Russia's Economy to Grow by 5.8% in 2005 - Finance Minister Kudrin

Russia's Finance Minister Alexei Kudrin, who was in London over the weekend, made a prediction that the country's economy will grow by 5.8 percent in 2005. Kudrin was visiting Great Britain to take part in a meeting of finance ministers and the heads of central banks of the world's leading industrially developed countries (also known as G-8).

On Saturday, Feb. 5, he gave a press conference where he said: "We have an official forecast and I agree with it. The rate of growth will be 5.8 percent. This growth is linked to improved economic policy, an improvement in the basic economic indicators and to oil prices." Russia's Finance Minister also predicted that this year's world oil prices will be lower than last year. "Many analysts believe that the rate of economic growth is connected to the implementation of structural reforms," Kudrin, quoted by Itar-Tass agency, also said. "This year we have serious plans to carry out reform in the areas of taxation, the public sector, banking, natural monopolies and competition. The forecast is based on this." The Russian official added that "we expect to reach an agreement with the WTO". He believes the consequences of such an agreement "will not come into play this year, however, it creates positive expectations and will have an effect in the following years". The Russian minister called the clearing of Russia's debts to the International Monetary Fund an "important event". "This gives Russia a new quality and strengthens its position," he emphasized.

Bloomberg agency reported from the same press conference that Kudrin said that Russia is set on improving investors' attitudes. "We are taking steps that will promote the improvement of investors' attitude towards the Russian market. The steps are connected with our efforts in the sphere of state finances, lowering of country risks, increase in the financial transparence of our operations and implementation of other reforms," the Russian minister said, adding "We are absolutely convinced that it is necessary to improve investment climate in Russia."

From MOSNEWS, Russia, 7 February 2005

Public Finance - France Embraces the 2 Percent CAP Method

Rome - The Italian Finance Ministry responded positively to the French government's decision to "fund its debt curtailment program with measures akin to the "2 pc parameter", which is similar in many respects to measures adopted by the Italian government with regards to the very same issue. According to an official ministry communique' "French public expenditure is set to rise in 2006 in line with inflation, which is forecast at 2 percent in Euro-zone. Expenditure curtailment include turnover measures, in much the same way as Italy has done in its financial planning bill. This is proof of the fact that the measures adopted by the Italian government with regards to outlay are innovative and in line with choices elsewhere in Europe. This proves a drive towards adopting harmonised solutions to common problems".

From Agenzia Giornalistica Italia, Italy, 8 February 2005

Gaymard Unveils Plan to Reduce France's Tax Burden

Hervé Gaymard, France's finance minister, yesterday detailed a series of incentives aimed at reviving consumer spending and lessening the country's tax burden. Mr Gaymard, setting out the economic agenda for the conservative government agenda in the run-up to presidential elections in 2007, also confirmed the timetable for one of Europe's largest privatisation programmes in recent years. Shares in toll roads group Societedes Autoroutes du Nord et de l'Est de la France will be sold before April, followed by an initial public offering for Gaz de France before the summer. Areva, the nuclear power group, will be partly privatised by the end of the summer, and Electricite de France, the electricity utility, by the end of the year. The sell-offs are expected to raise some €19bn ($24bn, £13bn). The privatisation of EdF and GdF, long on the drawing boards, has repeatedly drawn protests from employees; yesterday EdF workers staged a 24-hour strike that shut down 6 per cent of France's electricity generation capacity. Mr Gaymard, who took over two months ago from Nicolas Sarkozy, a likely presidential candidate, laid out a set of micro measures, many of which were introduced by his predecessor. Mr Gaymard said his goal was to create employment by boosting spending power and encouraging consumption.

France's unemployment rate of nearly 10 per cent was "scandalously high", he said. "We must question ourselves about the success of the UK, Denmark or Sweden. We must be pragmatic and have no taboos." He said he would present a range of propositions to prime minister Jean-Pierre Raffarin in the coming months to cut income tax, particularly for the middle classes and the working population. These would include tax cuts for lower wage earners and enhanced relief on professional expenses. President Jacques Chirac pledged in 2002 to reduce income tax by 30 per cent by the end of his mandate, and Mr Gaymard said the government was halfway to achieving this target. He also gave the go-ahead for interest payments on current accounts, an initiative ordered by Mr Sarkozy, and said the government planned to encourage the development of a consumer credit industry.

Finally, he pledged to liberalise the retail market with an "ambitious" reform of the loi Galland - which bans retailers from selling branded goods below suppliers' list prices - before the end of the year. Many observers have blamed the Galland law for significant increases in consumer prices over recent years and Mr Sarkozy had made its reform a priority in his own programme to boost consumer spending. He also said companies would be given greater tax incentives to invest in research, part of the government's drive to encourage innovation in the economy. Mr Gaymard said he was confident that France would meet its target of 2.5 per cent growth this year, in spite of growing pessimism among economists. He also reiterated his belief that France would meet its obligations to keep its budget deficit at 3 per cent of gross domestic product this year.

From Financial Times (subscription), UK, by Peggy Hollinger, 9 February 2005

Public Finance Surplus Highest in Five Years

London - Soaring tax receipts have pushed public finances to their biggest surplus in five years in January, giving Gordon Brown a welcome boost ahead of an election expected in just three months. The Office for National Statistics on Friday said there was a net cash repayment of 16.86 billion pounds in January - more than two billion pounds better than a year earlier or market forecasts - as corporate tax revenues shot up more than 30 percent. Economists said this had increased the chances of the chancellor meeting his fiscal forecasts ahead of the budget, due next month, and reduced the threat of a breach of his "golden rule" - that he only borrows to invest over the economic cycle.

Brown, under fire from critics who say the public finances are out of control and that taxes will have to rise after the election, quickly trumpeted the figures as a vindication of his forecasts. "Today's figures show that Britain, as I promised, is meeting our fiscal rules," Brown said in Staffordshire. But analysts said some kind of fiscal retrenchment may still be needed after the election to make sure the public finance remain on track. "A surge in income tax and corporation tax revenues in January has somewhat improved the Chancellor's chances of hitting the golden rule in the current economic cycle," said John Hawksworth, economist at PricewaterhouseCoopers. "But it does not change our view that a fiscal adjustment, either through higher taxes and/or lower public spending growth, will probably be needed to continue to meet the rule in the next cycle."

Bumper Receipts - The government's preferred accruals-based measure of the public finances also posted a large surplus - the highest in three years. There was a public sector net surplus of 6.59 billion pounds, about 3 billion pounds higher on the year. That took borrowing in the fiscal year to January to 30.88 billion pounds, on course to meet Brown's full-year forecast of 34.2 billion pounds. Trends are going his (Brown's) way. Spending growth has been slowing and revenues have been picking up," said Ross Walker, UK economist at RBS Financial Markets. Much of the improvement was down to a huge rise in receipts from companies, probably as oil companies have recorded record profits following the surge in energy prices last year. For instance, Royal Dutch/Shell Group (RD.AS: Quote, Profile, Research)(SHEL.L: Quote, Profile, Research) posted a British corporate profit record of more than 17 billion pounds. Government company tax receipts were up 17.4 percent on the year in the April-January period, compared with Brown's forecast for the financial year as a whole of an increase of 15.4 percent. Income tax also rose 17.1 percent on a year earlier.

From Reuters.uk, UK, by Sumeet Desai and Anchalee Worrachate, 18 February 2005

Be Serious About Employment

The universal belief is that a private sector-driven economy always pulls off better results, and to some extent it does.
As for Zambia when the Chiluba administration took over the reigns of power in 1991, it seemed as though the country had a privatisation bulimia because of the speed at which the programme was executed. It was seen as the country's only vision to economic boom. Of course not all the privatised companies made it. In fact, a good number of them collapsed midstream and went with the water. One of the big advantages with privatisation, we were told, was that it would swiftly engender a lot of employment and, consequently, reduce the current high levels of poverty. But the citizens now know that very little of that has taken place as Zambia is still covered in callous poverty. Admittedly the mines, agriculture and tourism are showing signs of sanguinity, but only starting and the sectors are still at the threshold.

So the call by Zambia State Insurance Corporation (ZISC) head of corporate development Chibamba Kanyama to Government to influence the private sector through policy manipulation to lift up employment levels in Zambia as a response to companies' rising profits cannot be clearly seen in our mind's eye. It boggles our minds that if profits by companies in Zambia are high-ceiling, why should they fail to create jobs instead of suspecting that Government might backpedal on its fiscal disciplinary measures? For the information of Mr Kanyama and companies now swimming in the reported towering profits, the private sector in Zambia only employs 10 per cent of the locals, hardly a grand record. According to the latest edition of the Central Statistical Office bulletin, The Monthly, 60 per cent of all employed persons are self-employed while 20 per cent are under unpaid family workers. The private sector employment accounts for 10 per cent while the central Government accounted for five per cent. May be the poor employment rate by the private sector can be truly attributed to casualisation of labour especially in trading activities on which Zambia has fatefully based its economy. So far, employment generation in Zambia is still an imperceptible affair and we shall accept this situation with a huff.

From AllAfrica.com, Africa, The Times of Zambia, Ndola, 4 February 2005

Privatisation of Firms Has Caused Misery to Zambians, Says Pwele

The irresponsible behaviour of government through privatisation has made Zambians suffer, Roan UNIP member of parliament Cameron Pwele has charged. Debating the motion urging government to consider the plight of former employees of privatised parastatals raised by Sinazongwe UPND member of parliament Raphael Muyanda, Pwele said it was sad that many former workers have not been paid terminal benefits. He said government carried out privatisation without planning. Pwele gave examples of workers from Kawambwa Tea Company, Dunlop, Serioes International and Kapiri Glass that have not been paid their terminal benefits. He said the MMD government completely destroyed what UNIP left instead of building on them. "Do you need everybody to rise just like the people of Luanshya did and throw stones for you to pay them?" Pwele asked. "If you want to lose in 2006, play with the lives of people of the Copperbelt. People are suffering on the Copperbelt some of you have even run away to Lusaka."

Nalikwanda UPND member of parliament Simasiku Kalumiana said the MMD government had, adopted a copy and paste culture of doing things. He accused the government of lacking innovation. "There is no way you can liberalise up to your bedroom, that is dangerous," Kalumiana said. He said most MMD members and ministers would have been witch finders if it were not for Dr Kenneth Kaunda's policies that saw them get educated. Kantanshi Patriotic Front member of parliament Yamfwa Mukanga contributing to the motion said government had failed to deliver. He said people were now not looking forward to retirement because they feared it was the beginning of problems. "Instead of fighting corruption you are stumping in corruption and prostitution because the people have to survive," Mukanga said. Mbabala UPND member of parliament Emmanuel Hachipuka expressed concern that this year's budget did not cater for people retrenched in former privatised parastatals. He advised government not to only attend to those who could blackmail it. Namwala UPND member of parliament Ompie Nkumbula-Liembethal said paying the former workers was an act of good governance. Seconding the motion, Magoye UPND member of parliament Andrew Haakaloba said there was need for a post-privatisation audit to see exactly what transpired in privatised parastatals.

From AllAfrica.com, Africa, by Speedwell Mupuchi And Nyamwaya Munthali of The Post, Lusaka, 17 February 2005

Privatisation: Dusting the Files

Two assignments await the structural reforms programme. Every long journey, it is said, starts with one step. The privatisation process inscribed in the structural reform programme remains a major challenge for government. The Minister of the Economy and Finance puts the challenge in two perspectives: completing the process that has been engaged and cleansing the situation of some public enterprises. This year's programme of action earmarks among others, the recruitment of a government council and the signing of a contract with a consultant in order to launch studies on the privatisation of Cameroon Airlines. Two plans will equally be drawn up to redress the situations in CAMPOST and CAMTEL through the services of a consultant. In the meantime, the privatisation of SNEC will be continued. As far as CAMRAIL is concerned, the proofreading of the concession convention has virtually terminated. All these are expected to lead to the financial restructuring of these enterprises.

In the meantime, what has already been achieved on the field cannot go unnoticed. The appointment of a temporary administrator for the National Water Corporation (SNEC) pending privatisation tells of the transparent nature with which government wants the process to be carried out. Last year, it launched a call for manifest interest from people or enterprises with proven expertise. Applications are still awaited to that effect. Another call had earlier been launched for Cotton Development Corporation (SODECOTON). The Tea sector of the Cameroon Development Corporation (CDC) stands out as one of the areas that received prompt reaction from businessmen. It was sold to the South African company, Brobon Finix S.A. The three other sectors are still awaiting privatisation.

Structural reforms were equally carried out in the forestry sector with the creation of the National Forestry Agency (ANAFOR) and the appointment of the administrative team. The team is presently working on the new programme which will include thinning down the number of workers and redefining the roles assigned to them. As government forges ahead with the privatisation process, what however remains disturbing is whether some Cameroonians, including those working with the corporations involved in the process, really understand the necessity for privatising. Many continue to carry along public service spirit at work. In the same vein, some of the new proprietors have introduced reforms that are neither appreciated by the public nor workers in the company. The case of AES-SONEL is worth mentioning. This particular company has not had it easy with its customers, especially with the introduction of load shedding. But from the look of things, the whose process is a question of sacrifice from both the workers and the proprietors.

From AllAfrica.com, Africa, by Cameroon Tribune, Yaounde, 16 February 2005

Privatisation: World Bank 'Not Dictating to Nigeria'

Contrary to suspicion by many Nigerians that the Federal Govern-ment's privatisation programme was being in-fluenced by the World Bank and the International Monetary Fund (IMF), a panel of experts says the the Bretton Woods institution is actually against total privatisation. Discussants at a three-day workshop on Pan- African Project Finance organised by Regal Exchange & Associates Limited said the multilateral agency was not dictating to the country in connection with its privatisation programme. According to Mr. John D. Crother, course director, "The World Bank hates asset sale (privatisation); it loves Build, Operate and Transfer."

He however emphasised the need to put the necessary fundamentals in place with a view to attracting the required international funding since there was not enough funding locally to provide the needed infrastructural and other projects. The reason, he said, was that privatisation gives the impression that "government is selling what I used to enjoy for free to private people who will now charge me a very high amount for it." He explained further that in the BOT arrangement, otherwise known as concession, the full commercial risk is borne by the private party while the property is ultimately owned by the government. He said this especially applies to essential public utilities and infrastructure such as the railways, the ports and water supply. He said full privatisation was usually frowned upon by people because it is seen as the sale of public property to a few favoured private individuals or corporate bodies.

Crothers acknowledged that since private participants in the public infrastructure bore the full risk in most cases, for ownership transfer, they of necessity charge higher rates for goods and services rendered. Buttressing the position of Crother, Mallam Ibrahim Jalingo, Deputy Team Leader, Railway, at the Bureau for Public Enter-prises (BPE) told THISDAY at the Pan-African Finance Project workshop that at no time had the World Bank dictated to Nigeria on privatisation in the current political disposition. Rather, he said what the Bretton Woods institution insists on are transparency and competition. He explained that the Bureau of Public Enterprise usually examined government companies and institutions billed for privatisation and recommends the mode of their disposal taking into cognisance the best interest of the nation.

Thereafter, he said, a recommendation is made to the National Council in Privatisation headed by Vice President Atiku Abubakar, which then takes the final decision on what should be done about them. Mr. Bayo Jide, head of Business Development, EMEA, Regal Exchange & Associates based in the United Kingdom, organisers of the forum, said the workshop, the like of which has not been held in Nigeria before was to expose participants to the latest trends in project financing in emerging markets and the best way to attract finance for projects. Among participants at the workshop was Mr. Saidu Barry, Divisional Chief, infrastructure and Finance of Islamic Development Bank, said he was taking part in the talkshop so a to learn more about how to mitigate risks.

From AllAfrica.com, Africa, by Patrick Ugeh of This Day, Lagos, 18 February 2005

Uganda Signs US$70 Million Agreement for Private Sector Development

The Government of Uganda today signed a financing agreement with The World Bank worth a total of US$70 million to support Private Sector Development in the country. This is part of the International Development Association (IDA) support to the Government of Uganda in the fiscal year 2005, which totaled to US$327.6 million of which US$190 million was grants. The International Development Association (IDA) US$70 million credit* will support a reform program by the Government of Uganda aimed at eliminating key constraints to Uganda's international competitiveness. The credit was approved by The World Bank Board of Executive Directors, on September 2, 2004. It is currently awaiting approval by Parliament in order to become effective. The Private Sector Competitiveness II Project supports the second pillar of the Uganda Government's Poverty Eradication Action Plan (PEAP) on Enhancing Production, Competitiveness and Incomes by creating sustainable conditions for enterprise creation and growth that respond to local and export markets. It will help reduce the costs of doing business and encourage investment while enabling the private sector to be better positioned to respond to investment and export opportunities.

"The project complements the ongoing Poverty Reduction Support Program in Uganda by supporting analytical and implementation capacity in the private sector and in selected public institutions that underpin policy and institutional reform. It will also enable public sector institutions that provide services to the private sector to become more effective through strategic public-private partnerships," said Ms. Judy O'Connor, the World Bank Country Director for Uganda and Tanzania, who signed on behalf of the Bank. Ms. O'Connor further explained that this is the second project in which the World Bank is assisting the Government to support Ugandan enterprises more directly. It contains several innovative schemes intended to increase value added, support the linkages between enterprises, and improve skills, with a focus on Micro, Small and Medium Enterprises (MSMEs), including reaching out to those in rural areas. It is also designed to address constraints relating to access to land and land registration, as well as infrastructure.

The impact of this program should be a larger and more competitive formal private sector, more jobs, higher levels of productivity, and improved incomes in MSMEs. The program is also exceptional in that it was designed mostly by the Government in close collaboration with the private sector itself, so that the Government's intervention is strategic to leverage maximum response from the private sector. The private sector will be jointly responsible for its implementation and success. The project and its approach is trend setting for private sector development projects within the Bank. Many African countries will be looking at the success of this program closely for similar approaches. The first component of the project focuses on provision of infrastructure and other services required to support the growth of the industrial and business sector. Special emphasis will be laid on enhancing the availability of services in a modern, well-planned Kampala Industrial and Business Park (KIBP) located at Namanve, 11 kilometers east of Kampala. The public sector will provide the basic infrastructure for the park (access roads, intersections, water and electricity supply facilities, sewerage and wastewater treatment), while the private sector will take the lead in developing and managing the sites.

The success of this park can serve as a basis for extending this strategy to other areas around the country. The second component aims to improve enterprise creation and growth, in particular by strengthening the capacity of micro, small and medium enterprises (MSMEs), including women entrepreneurs. The thrust of this component will be changing enterprise behavior through investment in skills; better financial management and performance, and access to business services. It will build on past experience in providing matching grants by extending access more proactively into rural areas and working with business associations. The third component addresses critical issues in the business environment, including improvements in the land registry and business registration services, support for the revision and passage of key commercial legislation, and strengthening of institutions that support the private sector, with particular emphasis on supporting export growth. * 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 AllAfrica.com, Africa , World Bank (Press Release), 24 February 2005

Government Urged to Hold a Referendum on Privatisation

Bangkok - A member of the panel that drafted Thailand's Constitution has urged the Prime Minister to hold a referendum on the government's planned privatisation of state-owned enterprises. A well known lawyer and a member in the panel that drafted the 1997 Constitution, Kanin Boonsuwan said a referendum should be held to approve the premier's right to push on with listing more state enterprises on the stock market. Mr. Thaksin has vowed to press on with the government's plans to privatise state-owned enterprises by listing them on the stock market, citing the success of the partial privatisation of the oil firm PTT. "Mr. Thaksin seems to have the monopoly of making public statement on this issue. If this is really good, then why not hold a referendum in line with Article 214 of the Constitution," said Mr. Kanin. The process would allow 90 days for all stakeholders to present their points of view to the voters. Mr. Thaksin plans for these enterprises amounts to carving up the national assets and selling them in instalments, through a vehicle called the State Enterprises Act, Mr. Kanin alleged. This Act enables the government to virtually "dissolve" these enterprises over a fixed period of time, he said. Mr. Kanin the PM to fulfil his promise to listen to the views of all sides on the issue of privatisation.

From MCOT, Thailand, 13 February, 2005

Indigenous Group Backs Land Ownership Privatisation

The Aboriginal Local Government Association of Queensland says it supports the idea of privatising the ownership of Aboriginal land. Queensland's 15 Deed of Grant in Trust councils are in the process of becoming normal shires. The association says that process should include the privatisation of communal land to provide a rates base for the fledgling councils. President Vince Mundraby says it would also allow residents to move away from a dependence on welfare payments. "It would be a way forward and this is how we can achieve home ownership in our communities, but to do that we still want to retain the right or the inalienable right to hand our land down to our next generation," Mr Mundraby said.

From ABC Online, Australia , 18 February 2005

Privatisation and Restructuring a Precondition for Employment and Export Growth

Belgrade - Head of the International Monetary Fund (IMF) Mission to Serbia-Montenegro, Piritta Sorsa, said today that a rapid privatisation and restructuring of state and socially-owned companies in Serbia would encourage investment and create conditions for employment and export growth. Sorsa told a press conference that during a two-week stay in Serbia, the IMF team prepared a report on the situation in Serbia-Montenegro in the past year and added that the fifth examination of the economic programme carried out by the IMF and the Serbian government was realised. The IMF focuses on the great role of the state in the economy, which causes large deficits in current transactions, as well as on the examination of the economic policy and the problems in its implementation, she explained.

According to Sorsa, the share of the private sector in the economy is still low and at 45 percent it results in a high import rate and low export rate. With such a low export rate, it is very difficult to cover costs of import thus triggering great imbalance in current transactions. The payment deficit in the operations with foreign countries is financed through new debts, mostly private, worth more than $1 billion a year, Sorsa warned and highlighted that the state should focus on the acceleration of privatisation. That will significantly reduce the public share while increasing the private interest of GDP, and will also influence the restructuring of state and socially-owned companies. She said that a large number of companies are facing problems in management because they do not have competitive goods that can be exported.

The IMF recommends concentration on the demand, said Sorsa, adding that the focus will be on fiscal, monetary, and income policies in order to solve the problem of foreign payment imbalance and reach sustainable growth. The main challenges of the 2005 economic policy will be fighting inflation in order to keep it below 10 percent as well as reducing the current payment deficit, she noted. The key factor will be the restructuring of public companies, she said, recalling that salaries in Serbia are higher than those in neighbouring countries, which is a bad signal for foreign investors. The IMF recommends that salaries grow according to productivity growth. Sorsa explained that if the workforce in public companies is reduced, salaries can go up more than it was planned for this year. Speaking on the prices of public services, she said that the IMF has offered pledges for the covering of production costs. The Serbian government, with the support of the IMF, is getting ready to implement a plan to keep this year's inflation below 10 percent, Sorsa confirmed. She announced that two more revisions are planned as part of a three-year arrangement between Serbia-Montenegro and the IMF for the 2002-2005 period.

From Invest in Serbia, Serbia and Montenegro, 4 February 2005

Dissatisfaction With Government's Privatization Policy

The sudden death of the prime minister Zurab Zhvania led to wild speculation in the Georgian media regarding the cause of his death. Some versions go as far as connecting the tragedy to the privatization policy of the government, although it should be noted that most analysts were quick to discredit this argument. Defenders of this theory point to the fact that the current phase of the government's privatization process, masterminded by Zhvania and State Minister for economic and structural reform Kakha Bendukidze, had come in for a good deal of criticism from opposition parties and some economists and political analysts. It is speculated that Zhvania's last telephone calls were regarding the privatization process.

The Georgian media reports that the sale of Chiatura Manganese factory and Ocean Shipping Company pleased nobody except Zhvania and his team. Zhvania was accused of making deals with the winning companies Rezonansi reports, while he, Bendukidze and Minster of Economic Development Lekso Aleksishvili were attacked by opposition parties for having overseen a privatization process seen by critics as entirely lacking in transparency. The sale of the Ocean Shipping Company was also surrounded by confusion following Zhvania's announcement that the tender had been won by an Anglo-Australian consortium, only for the Australians ASP Ship Management Group to openly deny having participated in the purchase. The Georgian media has speculated that the government may not go through with its sale of the company to Armstrong Holdings, whose reputation has been questioned, according to Akhali Versia.

These controversial sales were followed by speculation that the country's main gas pipeline was to be sold to the Russian energy giant Gazprom. While Zhvania and Bendukidze both supported this sale, some experts criticized it on grounds of state security. Speaker of Parliament Nino Burjanadze was particularly vocal in her criticism of the suggested privatization. Those who consider that Zhvania's death could have been inspired by the privatization process say that Zhvania promoted Russian companies, a step that caused irritation within certain circles in Georgia. However, Akhali Versia writes that this version has received little support among the general public, who say that Zhvania was known to be a very experienced and moderate politician who had been involved in the privatization process for many years and so no serous mistakes could have been expected from him. While any connection between the prime minister's death - which is described officially as an accident, with no signs of foul play - with the privatization process seems unlikely, what is clear is that the loss of Zhvania, who was the principal architect of the process, leaves a great deal of uncertainty as to where the process will go from here. Much will depend on the extent to which Minister Bendukidze is given the responsibility to continue where Zhvania left off.

From Messenger.ge, Georgia, by M. Alkhazashvili, 7 February 2005

New Ukrainian Prime Minister Moves to Cancel Controversial Privatization Deals

Kyiv - Ukraine's new prime minister ordered the government Saturday to begin the process of returning Ukraine's largest steel mill to state control with the aim of putting the mill back up for auction. The order by Yulia Tymoshenko is the latest in a number of manoeuvres surrounding the Kryvorizhstal steel mill, which was bought at a rock-bottom price last year by a consortium that included the son-in-law of former president Leonid Kuchma. Many Ukrainians consider the deal one of the most corrupt of this country's post-Soviet privatizations. "All the documents which the former government approved illegally have been cancelled," Tymoshenko said after chairing the first meeting of her new cabinet. "This means that we have begun the process of returning Kryvorizhstal to be state property."

Preparations will then be made to resell the mill during an open, transparent auction, Tymoshenko said. She pledged that the process would proceed as quickly as the law allowed. Tymoshenko promised more details, but the Cabinet of Ministers press office said it had no more information. It was unclear what the next step would be. A Ukrainian court already had frozen shares in Kryvorizhstal, and newly elected President Viktor Yushchenko had made no secret of his plans to undo the sale. Viktor Pinchuk - Kuchma's son-in-law - and his consortium paid $1 billion Cdn for the mill, even though their bid fell significantly short of rival offers by Russia's OAO Severstal and a consortium made up of United States Steel Corp. and LNM Group. Analysts have said the mill was worth twice the winning bid. "All those enterprises that were stolen will be returned to the state, beginning with Kryvorizhstal," Yushchenko told legislators Friday. Kryvorizhstal produces about 20 per cent of Ukraine's steel and had a pretax profit of about $375 million Cdn in 2003.

From CBC News, Canada, 5 February 2005

Ukraine's Timoshenko to Analyze Privatization Deal

"We are starting a major clean-up in our common home," Timoshenko said at a Tuesday press conference. "We will make a comprehensive analysis of every dealing with Ukrainian state property, estimate the current condition of state property, and plan future handling of this property." "The Verkhovna Rada has banned privatization until the end of examination of former privatization deals and a decision on further privatization principles," Timoshenko said. "We will give the go-ahead to absolutely transparent, clear and fair privatization as soon as we formulate privatization principles." The Ukrainian government will resume privatization of state property following the Verkhovna Rada approval of a new privatization program for 2005, she said. Earlier in the day the Ukrainian government decided to retract from the parliament the privatization program of the former cabinet and to start drafting a new privatization plan. The Ukrainian government has instructed the Prosecutor General's Office to analyze validity of every privatization deal, Timoshenko said. "The analysis will be done before February 14, and the Prosecutor General's Office will tell the government about legality of the privatization," she said.""It is necessary to regulate state property. Unfortunately, there is no unified property register in Ukraine, and the property is not being administered," Timoshenko said.

From ITAR-TASS, Russia, 8 February 2005

Yushchenko: Government Reviewing Privatizations

New President Viktor Yushchenko on Tuesday said his government will review murky privatizations of state-run enterprises, but aimed to reassure investors that the effort, which could include canceling some deals, would be orderly and fair. In recent years, several major state-run enterprises were sold under questionable terms and at apparently below-market costs, sometimes to figures connected with previous President Leonid Kuchma. Yushchenko has promised a thorough investigation into alleged corruption under Kuchma, including the possible cancellation of some privatizations, and investment bankers have warned that the efforts could raise concern about property rights and rule of law if they are seen as being driven by political revenge. Yushchenko tried to lessen those concerns at an investors' conference Tuesday, saying the government will prepare a list of enterprises to come under scrutiny that "will be limited and final and will not be extended after its completion." He did not elaborate.

Yushchenko and government officials previously have said that one of the major privatizations to be investigated is that of the Kryvorizhstal steel mill. The mill, one of the world's most profitable, was bought at a rock-bottom price last year by a consortium that included Viktor Pinchuk, Kuchma's son-in-law. "We say Kryvorizhstal was stolen and at any cost we will return it to the state," Yushchenko said at the conference. Last year, two other key bidders, Russia's OAO Severstal and a consortium made up of United States Steel Corp. and the LNM Group cried foul over the mill's auction.

Analysts said if the mill is put up for a transparent resale, open to foreign bidders, the government might receive more than double the US$800 million (euro665 million) it sold the mill for last year. Other companies in the firing line could be Ukrrudprom, an iron-ore producer that was also sold to a Pinchuk-linked group and the Petrovsky steel mill, in which only local companies were allowed to participate. Yushchenko said the government would crack down on widespread corruption. "From morning until evening the president and the government are discussing how to struggle with corruption," he said. "I reassure you that nobody in this country will take bribes ... policemen will not take bribes, officials will not take bribes," he said. Yushchenko said Ukraine will apply for membership in the World Trade Organization at its session in November. He also said Ukraine should become a European Union member while retaining close ties with Russia, it's huge neighbor, a key trade partner and energy supplier.

From Forbes, 15 February 2005

Privatisation of Big Ukrainian Steel Company Ruled Illegal

Kiev - A Ukrainian court ruled that the privatisation of the country's largest steel enterprise, Krivorizhstal, was illegal. The decision paves the way for the sale to be annulled by the supreme court and comes a day after Prime Minister Yulia Tymoshenko said the government planned to review past privatisations of thousands of enterprises. The ruling was issued by a tribunal in Kiev which reversed a court judgement from last August declaring that the sale last year of the Krivorizhstal plant had taken place legally. Tymoshenko announced Saturday that this strategic factory would be returned to state control "in the coming weeks." "A link in the judicial chain has been added today," Vyacheslav Astapov, spokesman for the prosecutor general's office, told AFP. "The next and final step will be examination of the case by the supreme court. The prosecutor has already petitioned the supreme court to annul the privatisation," he added. Tymoshenko said Saturday that the plant, one of the largest and most profitable in Ukraine, would be returned to the state "in the coming weeks." President Viktor Yushchenko said afterwards that an international tender would be organized later for its resale.

Cancellation of the Krivorizhstal plant's privatisation would mark the first in what many expect to be a long list of "strategic" enterprises that the new authorities in Ukraine claim were privatised fraudulently under the regime of the former president, Leonid Kuchma. A consortium created by Viktor Pinchuk, Kuchma's son-in-law, and Rinat Akhmetov, Ukraine's wealthiest person, bought a 93 percent stake in the Krivorizhstal plant last June for 800 million dollars. Neither could immediately be reached to comment on Thursday's court ruling. The sale of the plant was criticized at the time by Ukraine's opposition -- today the new authorities in the country -- and by foreign groups who claimed to have made bids far exceeding the winning 800 million-dollar offer for the plant, located in the central-eastern city of Kryviy Rih. Pinchuk said earlier that he was "preapred to recognize any legal decision" regarding his acquisition of the factory. But in an interview published Saturday in the weekly news magazine Korrespondent, Pinchuk criticized the review of the privatisation process as "a political 'thing' launched during the presidential campaign" of Yushchenko, who was then the country's main opposition leader.

From Turkish Press, Turkey, by Alexander Nemenov, 17 February 2005

No Sweeping Re-privatisation in Ukraine

Kiev - There will be no sweeping re-privatisation in Ukraine, a high-ranking official said. The head of the State Property Fund, Mikhail Chechetov, told Itar-Tass on Wednesday that the Prosecutor General's Office was probing into the sale of about 3,000 pieces of state property. "They checked and will check, including in regions. This is a working process," he said. According to Chechetov, the State Property Fund "is severing agreements on 350 facilities through courts" because investors were not fulfilling their obligations. Courts have already handed down verdicts in 150 cases, and 200 cases are pending. Chechetov said the Fund would not make any decisions on orders by telephone. "The Fund did not, does not, and will not work by telephone instructions. All decisions are adopted on the basis of government instructions," he said. Earlier, Prime Minister Yulia Timoshenko said the Prosecutor-General's Office had submitted to the government the results of its probes into privatisation over the last five years. Abuse was exposed in about 3,000 cases. "All will go before courts of law," Timoshenko said. Speaking about the privatisation of Ukraine's biggest metallurgical mill, Krivorozhstal, the prime minister said it had been sold by a criminal pattern and promised to arrange for a "real contest and real evaluation."

President Viktor Yushchenko said the re-privatisation of a number of facilities would make it possible to establish the truth and raise funds for the budget. According to government estimates, the budget's latent deficit is six billion dollars. Yushchenko also promised that the list of enterprises subject to privatisation revision would not be changed in the future. "The Cabinet of Ministers will publish a list of facilities to be scrutinised within the framework of privatisation projects," Yushchenko said in Lvov. The list will be final and no more privatised facilities will be added to it in the future. The president said it would be very wrong to drop hints suggesting "this revision may continue on and on." "The revision of privatisation will help establish the truth and raise funds for the budget," Yushchenko said. He specifically pointed out that privatisation revision should not be seen as nationalisation. "I do not like the word 'nationalisation'. I do not like the word 're-privatisation', either, However, in those cases where the law was abused we should do everything that can be done to bring about the triumph of the law," he said.

Meanwhile, the government intends to consider and approve a special programme entitled "Property to the People" that is designed to ensure "the regulation of relations with state property". Timoshenko said, "It will be a powerful programme, and the government will secure a legal and organisation groundwork for it and will strictly observe it." Yushchenko said at a conference of international investors in Kiev on Tuesday that the list of privatised objects that will be returned into state ownership would be "limited and closed, which means that after its approval no new objects will be added to the list." In his words, "more than one object" will be returned into state ownership and drew special attention to Krivorozhstal. "Whatever it may cost to my government, we'll return Krivorozhstal into the ownership of the state. If Krivorozhstal is put for a resale, it can be sold at three or four times the old price," Yushchenko said.

The president pointed out at the same time that the government would not allow a mass revision of privatisation in Ukraine. National Security and Defence Council secretary and head of the parliament's budget committee, Pyotr Poroshenko, said the incumbent government planned to file protests in court against the privatisation of 10 major enterprises, including a number of mining, metallurgical, and ferroalloy plants. Poroshenko said the new government would find arguments to convince the court to rule "honestly and independently, without interference by any branch of power, accepting the arguments of the government" that "privatisation should be honest". Therefore, according to Poroshenko, the owners of these enterprises will have to take part in a new privatisation tender and pay "the real price for these facilities". In his view, this will give the national budget will receive an additional 10-12 billion hrivnas (over two billion U.S. dollars).

From ITAR-TASS, Russia, 17 February 2005

Ukraine to Change Ideology of Privatisation

Kiev - The Ukrainian government plans to change the ideology of privatisation in order "not to eat away" the revenue generated by the sale of state property, First Vice Prime Minister Anatoly Kinakh said. He told journalists on Saturday, "It is unacceptable when all financial gains are directed towards consumption. We will try to make sure that the resources from privatisation go into innovative projects, small and medium-sized business support." In his words, the government is finalising a privatisation programme for 2005. It will be based on the transparency of privatisation auctions and equal access to them for all investors, he added. Kinakh said privatisation revenue in 2005 was expected at 2.5 billion grivnas (almost 500 million U.S. dollars), which is half of what was projected by the previous government in the 2005 budget that will need to be corrected now. The first vice prime minister confirmed that the national communication operator Ukrtelecom would not be privatised in 2005 because its sale will require "a serious pre-privatisation preparation". He said the government was still mulling over the list of property to be sold in 2005. Kinakh also said that a special working group set up by the Ukrainian government was examining the legitimacy of the privatisation of about 20 enterprises. "We are scrutinising the privatisation of several companies, including Krivorozhstal (metallurgical mill) and energy-related ones," he said. According to Kinakh, "The government will not allow the situation to slide to the re-division of property." He promised that the government would "protect the rights of owners".

From ITAR-TASS, Russia - 26 February 2005

Officials in Iraq Work to Establish Government Privatization Entity to Oversee National Privatization Program

Advisors working on the United States Agency for International Development (USAID) Private Sector Development Initiative (PSD II) are supporting the establishment of a government privatization entity to oversee any national privatization program. PSD II staff are contributing to an ongoing discussion among Iraqi government officials as to the make-up and responsibilities of such an entity. As this discussion continues, PSD II is participating by drafting papers that help to outline potential roles. The collaboration among Iraqi government officials, USAID and private sector representatives recently produced the revision of a privatization white paper, initially prepared in November 2004, to incorporate new findings on small-scale privatization. Once finalized, the paper will guide future policy decisions. The new draft of the paper was circulated to members of the Iraq Privatization Commission and the Economic Development Advisor to Prime Minister Ayad Allawi and was reportedly well received.

From Portal Iraq, MA, 2 February 2005

Privatization of Refineries to Solve Iran Problems

Deputy Oil Minister for the International Affairs Hadi Nejadhosseinian said on Tuesday that privatization of refineries can alleviate problems caused by rise in prices of oil derivatives. Addressing a seminar on the subsidy-based economy, Nejadhosseinian said that as long as oil derivatives are sold in state codified prices with government paying subsidies for fuel, no economic problem would be solved. Nejadhosseinian proposed that government should pay the revenues, gained from increase in prices of oil derivatives, to the public in three years in the form of share so that the public would be able to solve their problems through the benefits they gain from the shares. Government is to privatize the downstream sector of the oil industry in the next five years, said Nejadhosseinian, adding that the strategy would be effective in making oil derivatives more competitive. He said current system of subsidy payment on certain goods has created many problems for the Oil Ministry and the downstream oil industries. He added that removal of state subsidies and offering coupons or shares can solve many of the present economic woes. Government paid about 17 billion dollars to the oil sector last year and the figure is expected to reach about 20 billion dollars this year, said Nejadhosseinian. He predicted that the figure would yet show further increase given the current global prices. The official said government can now build more than 25,000 kilometers of highways through fuel subsidies and the highways would be a good source of income.

From IranMania News, Iran, 8 February 2005

Greenspan Favors Privatization

Alan Greenspan, chairman of the Federal Reserve, had cautious words for President Bush's proposal to turn some Social Security investments over to private accounts. But, Greenspan reiterated his support for the concept, giving a boost the White House's effort to fundamentally change Social Security. Greenspan, on Capitol Hill Wednesday to answer questions from the Senate Banking Committee, promoted a go-slow approach for a plan to allow younger workers to convert part of their mandatory Social Security payments to private investment accounts. Greenspan said his warning to advance gradually comes in light of the volatility of investment markets. But, he said that "it's a good thing to do over the long run."

Surely President Bush will be pleased, but not surprised, by Greenspan's testimony. Greenspan has previously voiced support for the partial privatization of Social Security. But the President would probably rather forget some of Greenspan's other recommendations on the federal pension plan. Though he didn't say it directly Wednesday, Greenspan has in the past recommended a combination of benefit cuts and tax increases to cover the inevitable cost of the Baby Boomer generation reaching retirement age. Though the Fed chairman stopped short of specific recommendations Wednesday, he did encourage Congress to find a fix for Social Security. "Real progress on these issues will unavoidably entail many difficult choices. But the demographics are inexorable and call for action," Greenspan said. Bush has said he doesn't want to raise taxes or cut benefits. But he acknowledged in remarks Wednesday that most options - with the exception of an increase in payroll tax rates - remain on the table. That includes, the president said, increasing the $90,000 income limit on which Social Security taxes are paid. Clearly, the time for some of those difficult choices Greenspan mentioned are upon us.

From Springdale Morning News, AR, United States, 17 February 2005

IMF Asks Ecuador to Increase Privatization and Reduce Social Expense

Quito - Rodrigo Rato, director-manager of the International Monetary Fund, left Ecuador Friday after having demanded oil, energy, and social security reforms allowing the investment of private capitals. In his first and brief visit, Rato proposed structural reforms in the public sector, the reduction of social expense, the elimination of subsidies, and opening of the oil and energy sector to private capital. The reforms in the oil field and pension system, included in the bill that the Executive hope to send to the National Congress soon, are the most urgent ones, according to the IMF representative.

The public sector reforms will cause the dismissal of 5,000 workers and cuts in social expense, thus increasing poverty in the country, already affecting 70 percent of the population. Ecuadorian Economy Minister Mauricio Yepez highlighted the package of reforms will be sent to Congress with under the Economic Reform Law, after being discussed with President Lucio Gutierrez at the Carondelet Palace. Regarding the pension system, the government agreed creating a joint security that allows participation of private capital in pension funds. As Rate was meeting with Yepez and directors of the National Bank, a group of ecologists outside the Economy Ministry was shouting "No deal with Rato," "IMF out." The demonstrators tried to enter the ministry headquarter but found the opposition of the police. So far, the Legislation has rejected the government intentions to allow privatizations in the oil and other natural resource sectors.

From Prensa Latina, Cuba, 18 February 2005

EU Should End Push for Global Water Privatisation, Say activists and Utility Managers

European governments should stop imposing water privatisation and switch to supporting the expansion of the public water supply in developing countries, a new book has concluded. Launched during a seminar at the World Social Forum, Reclaiming Public Water challenges what it sees as widespread prejudices and presents a wide range of examples of how public utility reform has resulted in major improvements in access to clean water and sanitation, not least for the poorest. Written by water utility managers and civil society campaigners from more than twenty countries, the book highlights the bias against public utilities in the policies of international financial institutions and donor governments as one of the most serious obstacles to expanding public water delivery.

"The European Commission and many European governments use international aid and trade policies to encourage privatisation," says Satoko Kishimoto of the Amsterdam-based Transnational Institute, co-author of the book. "It is high time for European governments to acknowledge the failure of privatisation and start providing ambitious support for public sector options." The book cites numerous examples of multinational water corporations failing to deliver their promised improvements while raising water tariffs far beyond the reach of poor households. It concludes that the EU should end its push for including water in international trade agreements, such as the WTO GATS talks, and instead work to enshrine the human right to water in a legally binding UN convention.

From Environmental Data Interactive, UK, 4 February 2005