Information Technology to Drive Development

The government of Rwanda recognises the role information and communication technologies (ICTs) play in accelerating the socio-economic development. The Rwanda cabinet adopted the National Information and Communication Infrastructure (NICI) Policy and Plan in 2000. Moses Bayingana Director Private Sector, Education and Community Programmes said the policy is in line with the government's vision 2020. To facilitate the implementation of the national and sector ICT programmes outlined in the NICI Policy and Plan, the Rwanda Information Technology Authority (RITA) was established as a state agency.

The current thrust areas of NICI are human capacity development, infrastructure, e-government, ICT in education, community access and private sector facilitation. "Currently we are reviewing what has been achieved under NICI 2000 in order to prepare the NICI policy 2010. Along the preparation of NICI 2010, there is preparation of a resource mobilisation document, which is supposed to enable us mobilise funds to implement the policy. NICI 2005 was mainly to prepare a good environment to enable easy adoption of ICTs in different sectors," Bayingana said.

According to Bayingana, the NICI policy 2010 will start next year and among other activities will highlight mainly the e-government component. This component entails areas of government to citizens, government to government and government to business. Under government -citizens, emphasis is on enabling people have easy access to information and to enhance efficiency in government services as well as easier and faster access to services. The government-to-government component aims at improving productivity and efficiency within government. Government to business aims to enable business community access information easily. All this will be done using ICT as the enabling tool. Human resource management is one of the core areas where the nation's strategic goal is to develop and harness the nation's human resources to initiate, support and maintain Rwanda's socio-economic development towards an information and knowledge economy.

"Today, technology and ICT departments enrollment by public and private institutions of higher learning has risen from 1,318 in 2000-2001 to 3,768 in 2003-2004. Other initiatives such as the introduction of the training programme for technicians and the establishment of the regional ICT Training Centre at KIST have contributed to the human resource development core strategy. A total of 690 technicians and 190 secondary school teachers have been trained under the two programmes," Information at RITA states in part.

Under infrastructure, another area of thrust under NICI, the inalienable issue is that of universal access. As part of the strategy and commitment to increase access to telecommunications facilities, Rwanda is committed to liberalising the telecommunications and communications sector to encourage investment and competition in the sector. "Initiatives to liberalise both sectors are evident. Rwandatel has been liberaslised and the radio communications sector has also been liberalised. The liberalisation has brought a number of private radio stations in the sector," he explains. Radio is the most widely used method of communication in Rwanda. Some provinces have also inaugurated community radios to serve their populace. Telephones have increased eight times in the last six years both GSM and fixed lines. Under the rural telephony more than 250 VSATS have been deployed countrywide and over 1000 community phones have been installed. To ensure universal access, telecenters have been established across the country and plans are underway to establish more centres.

Absorption of ICTS: E-government - An e-government project document has been prepared outlining the short to medium and long-term scope of programmes envisioned. The former is confined to applications that enhance capabilities and information dissemination while the latter will consolidate government services by constructing systems that will eliminate duplicative processes, enhance interoperability, reduce redundancy, foster integrity and provide measurable improvement in performance. As part of efforts to modernise the civil and public services to facilitate administrative cost reduction and promotion of efficiency in government services delivery, there have been continued deployment and exploitation of ICTs to support the operations and activities of government services. The current status indicates that nearly all ministries have Internet access and local area networks. A number of ministries have websites and wide area networks. There is also considerable increment on equipment and applications usage.

Under the education sector, deployment and exploitation of ICTs in the educational system and establishment of ICT specialist institutions are key to the absorption of ICTs in the sector. The current computer/students ratios in the three public institutions of higher learning (National University of Rwanda, Kigali Institute of Science and Technology (KIST) and Kigali Institute of Education (KIE) are 1:12, 1:10 and 1:10 respectively. Efforts to absorb ICTs in the educational sector have been initiated by the ministry of Education through the following projects.

- The School Net project with a mandate to provide computers and Internet connection to 20 secondary schools and train teachers and students in basic computer literacy skills and to create Internet access for schools. - Distance learning project. Under this project, distance-learning centres have been established in all provinces. - Rwanda Development Gateway Group: The project has led to the establishment of the Regional ICT Training Centre hosted by KIST as an ICT specialist institution. The geographical information system and the Rwanda development gateway projects hosted by the National University of Rwanda are also part of the group.

Banking Sector - Within the financial systems, the banking system in Rwanda has witnessed considerable computerisation progress. Interconnection at branch levels is evident. Currently there is ongoing implementation of the electronic card payment system by Simtel.

Health - In order to improve care for people living with HIV/AIDS, TRACnet, a MINISANTE project enables their databases to be accessed by health workers in the field using a phone and web-based application. The successful operation, which was performed at King Faycal Hospital in collaboration with doctors in Belgium, is part of further efforts to absorb ICTs in this sector. Despite the achievements, several challenges remain. The recruitment and retention of top level ICT professionals in government is critical to the success of the NICI plan. The primary impetus for growth in ICT has to come from private enterprise and community.

Development of innovative public-private sector partnerships remains a challenge. Constraints faced include the current energy problem and lack of general awareness on the critical role of ICT as a strategic sector. Telecom is still the biggest sector in communications. The rollout rate is high, some operators have rolled out 70% of the country. "These are policies government is undertaking to bring about competition. With liberalisation the roll-out will hit 100%," Bayingana hopes.

From AllAfrica.com, Africa, by New Vision, Kampala - June 1, 2005

World Bank And IMF Support US$1.4 Billion In Debt Service Relief For Rwanda

Washington, DC - The International Monetary Fund (IMF) and the World Bank's International Development Association (IDA) have agreed that Rwanda has taken the necessary steps to the reach the completion point under the enhanced Initiative for Heavily Indebted Poor Countries (HIPC). Rwanda is the 18th country to reach this point, joining Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Senegal, Tanzania, Uganda and Zambia.[1]

Total debt relief under the enhanced HIPC Initiative from all of Rwanda's creditors is estimated at US$1.4 billion in nominal terms.[2] This assistance is equivalent to a reduction in net present value (NPV) [3] terms of US$452.4 million agreed at the decision point, plus a topping-up of the assistance in an amount equivalent to US$243.1 million in NPV terms, approved at the completion point. In the first ten years after the Completion Point, Rwanda would save approximately US$48 million annually in debt service costs

The additional assistance under the topping-up framework has been approved by the Boards of the World Bank's IDA and the IMF, as Rwanda's debt prospects had deteriorated primarily due to exogenous factors that have led to fundamental changes in the country's economic circumstances, since the Decision Point. The largely unexpected decline in Rwanda's export prices and a fall in international interest rates were the factors that contributed most to the increase in the NPV of debt-to-exports ratio, which at end-2003 stood substantially above the 150 percent target set out under the enhanced HIPC framework.

Including topping-up of the HIPC Initiative assistance, multilateral creditors would provide debt relief of about US$1.1 billion in nominal terms and bilateral creditors another US$0.3 billion. The World Bank will provide a total of US$0.7 billion in debt service savings over time and the IMF will deliver debt relief equivalent to a reduction in NPV terms of US$43.8 million agreed at the Decision Point, plus a topping up of the assistance in an amount equivalent to US$19.6 million in NPV terms, approved at the Completion Point. Since the Decision Point, part of the assistance has already been provided.

"The HIPC completion point is an important achievement for Rwanda, and reflects major and sustained efforts to improve the delivery of social services and other reforms over several years," said Pedro Alba, the World Bank's Country Director for Rwanda. "The budget savings from this debt relief are an important contribution to further improvements in social indicators and more generally to reduce poverty in the years ahead."

"Rwanda has largely achieved macroeconomic stability and established a good track record of policy implementation in 2004," said Kristina Kostial, the IMF's mission chief for Rwanda. "Looking forward, the key challenge for Rwanda is to raise the economic growth rate while maintaining macroeconomic stability and debt sustainability. Reaching the completion point is thus an important milestone for Rwanda toward debt sustainability while providing more resources for poverty reduction and the attainment of the MDGs. "Resources made available by debt relief under the enhanced HIPC Initiative are being allocated to fund pro-poor expenditure programs, as outlined in Rwanda's Poverty Reduction Strategy Paper (PRSP). The PRSP, which was completed in June 2002 after extensive consultations with civil society, is based on six strategic pillars: (i) rural development and agricultural transformation, (ii) human development, (iii) economic infrastructure, (iv) good governance, (v) private sector development, and (vi) institutional capacity building.

Background - Rwanda is a small landlocked country with a population of 8.4 million and with a per capita income of US$220 in 2003 and widespread poverty. In the years since the devastating 1994 genocide, Rwanda's output has recovered and the country broadly succeeded in maintaining macroeconomic stability, as evidenced by price stability and a comfortable level of international reserves. Rwanda's domestic political situation has stabilized, and substantial progress has been made toward rebuilding the institutions of an effective state, including through the adoption of a new constitution in May 2003, followed by a presidential election and legislative polls in the same year. Looking forward, improving regional stability in the Great Lakes region will be a key factor for achieving the country's development potential.

Steps Taken to Reach the Completion Point Under the Enhanced HIPC Initiative - Upon reaching its decision point under the enhanced framework of the HIPC Initiative in December 2000, Rwanda committed to undertake reforms in several areas as preconditions for reaching its completion point under the Initiative and thus receive irrevocable debt relief under the enhanced framework: (i) substantial achievements in social indicators, related to education, health, gender equality, and the combat of HIV/AIDS, (ii) adoption of a full PRSP and its successful implementation for at least one year, (iii) satisfactory progress in implementing structural reforms in the tea sector, and (iv) satisfactory performance under IDA and IMF-supported reform programs.

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[1] The completion point under the enhanced HIPC Initiative is when creditors irrevocably provide debt relief under the enhanced HIPC Initiative. The decision point - when assistance is committed - precedes the completion point, and provision of debt relief in the interim period to the completion point is voluntary.
[2] Nominal terms means the actual dollar value of debt service forgiven over a period of time.
[3] The Net Present Value (NPV) of debt is the discounted sum of all future debt service obligations (interest and principal). It is a measure that takes into account the degree of concessionality of a country's debt stock. Whenever the interest rate on a loan is lower than the prevailing market rate, the resulting NPV of debt is smaller than its face value, with the difference reflecting the grant element.
Contact in Washington: Amy Stilwell (202) 458-4906, Astilwell@worldbank.org.

From World Bank Group, DC - June 13, 2005

Merit-based Pay for Civil Servant to Spur Work on Cambodia's Reforms

A merit-based pay deal for Cambodian civil servants working on priority reform programs was formally agreed by The Royal Government of Cambodia and the Governments of Australia, the UK, Sweden, and the World Bank today. Called the Priority Mission Group (PMG)/Merit Based Pay Initiative (MBPI), the initiative will support the Public Financial Management Reform Program (PFMRP), launched by the Prime Minister in December 2004.

As part of a national program to enhance performance, the Council for Administrative Reform (CAR) and the Ministry of Economy and Finance (MEF) have agreed to establish the PMG/MBPI to cover an initial 300 centrally located civil servants working on high priority PFM reform activities. The Royal Government and development partners have agreed to share the cost of the initiative from the start, with the Government committing to provide an annual contribution of increasing value and share of total costs of the PMG/MBPI with each stage of the reform program to ensure sustainability, but based on periodic assessments of progress by all parties. The PMG/MBPI constitutes a new paradigm in dealing with institutional capacity development by providing adequate and well coordinated incentives for government officials to work hard and learn new skills.

Senior Minister and Minister of Economy and Finance, Keat Chhon, pointed out that "the Public Finance Management reform represents a major step forward by the Royal Government of Cambodia and its development partners in shifting from the practices of previous technical assistance by adopting new approach, which will mobilize national capacity and knowledge, thereby igniting a positive chain reaction throughout the society. Such direct support for the Government's national human capacity building efforts will definitely drive toward better governance."

Secretary General of the CAR, Ngo Hongly, said the initiative would be jointly funded by the Royal Government of Cambodia and AusAID, DFID, Sida, and the World Bank, and should serve as a model for other development partners and government agencies. H.E. Ngo Hongly added: "Enhancing performance within the civil service is essential to serving people better. However, improving remuneration is not in itself sufficient. These measures should be part of a cohesive package that includes strengthening service delivery processes, improving employment, developing capacity and using information and communications technology wisely. With the PMG/MBPI, together with our partners, we are embarking on a most promising and innovative course."

Country Manager of the World Bank in Cambodia, Ms. Nisha Agrawal, characterized today's agreement as "a real breakthrough" that would lead to a phasing out of the widespread practice of uncoordinated salary top-ups by different donors which had only served to hinder much-needed reform to civil service remuneration. "All parties - CAR, MEF, and the donors - have come together and worked out a compromise that improves incentives for civil servants working on high priority reform programs," said Ms Agrawal. "This kind of initiative - higher pay with merit-based management - is critical for improving service delivery in Cambodia and we congratulate the Royal Government on taking these important steps."

From Harold Doan and Associates (press release), CA - June 3 2005

Australia: Consensus on Public Policy

At the irregular Council of Australian Governments meetings, what little excitement they produce is generated more often than not by carefully stage-managed demonstrations of party politicking than by any meaningful dialogue, as premiers and other participants jostle for a spot in the limelight. But this time - refreshingly - that wearisome pattern has been avoided.

At the 15th COAG meeting, held in Canberra yesterday, the premiers, Prime Minister Howard, ACT Chief Minister Jon Stanhope and Australian Local Government Association President Paul Bell reached sensible consensus on a number of critical public policy areas. Most notably, with skilled labour in short supply, the council agreed on the need for a national approach to apprentice training. The swift implementation of its plans is very much in the broad economic interest. At the same time, the council committed to a national approach to management of export-related infrastructure, to a review of the health system, to further development of the National Water Initiative and to continuing collaboration on national competition policy.

Predictably, the states were not prepared to refer their industrial relations powers to the Federal Government, but even that potentially divisive issue was insufficient to cause the usual melodramatic walkout or heated exchange. It would be mightily premature, of course, to hail yesterday's civilised and constructive COAG summit as the beginning a new era for state and federal relations. But it's a start. Now what's needed is for the detail of yesterday's broad agreements to be developed, and new policies implemented. We wait with hopeful anticipation.

No need to panic - The presence in NSW hospitals of potentially deadly strains of highly resistant bacteria is a situation not to be taken lightly. For doctors have long warned of the dangers of the so-called "superbugs" - commonly strains of enteric or staphylococcal bacteria which do not respond to currently available antibiotics. But neither is the detection of such pathogens in Sydney hospitals a cause for panic. Though such organisms have been detected in a number of patients at a number of hospitals there are, as yet, no confirmed cases of infection. And it should be understood; it is possible to carry the bacteria without being infected. Nevertheless, the level of public concern is both understandable and commendable, and yesterday Health Minister Morris Iemma responded.

A medical taskforce, headed by microbiologist and infectious diseases expert Professor Lyn Gilbert from Westmead Hospital, has been established to monitor the situation and to take whatever steps are necessary should the bacteria become a serious public health management issue. Professor Gilbert's team will have the responsibility of overseeing consistent infection control protocols and ensuring world's best practice standards are being followed in our hospitals. Minister Iemma's appointment of a taskforce to oversee those standards is prudent. And another thing ... Vast black shapes, the humpback whales are gliding sedately north this time of year at an easy pace. But sometimes, they cavort and play, pcartwheeling in spectacular aerial displays of what looks like sheer exuberance and joy. What a treat it is see them off our shores – and long may they enjoy our protection.

From Daily Telegraph, Australia - June 4, 2005

U-Korea Envisions Next Chapter in Digital Revolution

Electronic communication has played an integral part in developing Korea's economy over the past four decades. Now with the country becoming one of the most advanced info-tech markets in the world, policymakers and businesses are facing the challenge of keeping growth alive in the matured telecom sector. "The IT industry has emerged as a key driving force of the Korean economy. However, we cannot afford to be complacent with the past achievement of the Korean IT industry, since the cut-throat competition of today allows only few companies and countries with the world's best technologies to survive internationally," said Chin Dae-je, the minister of information and communication. "Korea must focus on adopting new information and communication technology services ahead of our competitors and successfully commercialize them to secure future growth," he said.

To sustain its level of high growth over the past years in a quickly maturing marketplace, the government since 2003 has been pushing a new national info-tech strategy, dubbed IT839, outlining ambitious goals for eight services, three infrastructure technologies and nine product categories. Under the IT839 initiative, the Ministry of Information and Communication will encourage private investment in the identified specific technologies by funding research and offering business incentives. The eight new services are portable Internet (WiBro), mobile television (DMB), home networking, vehicle-based information systems (telematics), radio-frequency identification (RFID) technology, W-CDMA mobile telephony, digital television broadcasting and voice-over Internet protocol (VoIP) services.

To provide the backbone network for the new services, the government and industry will develop three advanced infrastructures including the broadband convergence network (BcN), a massive Internet protocol providing connections speeds between 50 mbps to 100 mbps, sensor-based computing networks and the next-generation Internet platform Internet protocol version 6 (IPv6). By enhancing the aforementioned technologies and network infrastructure, the government hopes to foster production in nine industrial sectors comprising mobile handsets, digital televisions and broadcast devices, home network equipment, system-on-chip products, next-generation personal computers, embedded software, digital content and solutions, vehicle-based information equipment and intelligent robot products.

The IT839 strategy is an essential part of the government's road map plan to integrate information and communication technology infrastructure with urban development and build an environment where people can enjoy access to high-speed networks and advanced communication services anywhere and anytime through a ubiquitous computing network. Through the comprehensive rebuilding project, dubbed U-Korea, the government hopes to facilitate further economic growth and lay the foundation for the national initiative toward achieving $20,000 per capita income. "U-Korea is what I would call a 'national meta plan,' where the roles and realms of government, businesses and individuals expand in different ways and dimensions from what is now," said Ha Won-gyu, from the Electronics and Telecommunications Research Institute. "Strengthening the relationship between the public and private sector, as with academia and industry, and building a communication structure that could add efficiency in planning and management will be critical in achieving what we envision through U-Korea," he said.

Broadband convergence network - The deployment plan for the broadband convergence network is seen as the government's most notable attempt to create an enhanced info-tech environment to cope with the trends of media convergence, providing an environment where wired and wireless communication may combine seamlessly under computing networks. The broadband convergence network is conceived as a massive Internet protocol that provides connections at speeds of 50 mbps to 100 mbps, or about 50 times faster than conventional broadband services now offered. Designed to enable people to connect from a wide range of terminals from nearly anywhere, policymakers hope the system can provide the backbone for future technologies by overlapping voice, video and data on a single platform.

Industry watchers expect Internet protocol-based television, next-generation mobile telephony and portable Internet to be the killer applications for the new network. "The broadband convergence network is the core of our national info-tech strategy. By successfully integrating the broadband convergence network with advanced end-user applications, Korea will be at least five years ahead of other developed countries in information-based consumer services," said Seo Seok-jin, director of the Communication Ministry's broadband convergence network division.

In August last year, the government picked three consortia, respectively led by telecom operators KT Corp., SK Telecom Co. and Dacom Corp., to conduct the broadband convergence network trial operations that are scheduled to run in 1,350 households in the cities of Seoul, Busan, Daegu, Gwangju and Daejeon through the end of this year, while attracting around 2 million users. Commercial services are expected to go online in 2006. Nationwide coverage is expected by 2010. The government plans to generate 8 trillion won ($7.7 billion) in private sector investment for the pilot projects this year. About 5.5 trillion won of the investment will come from the country's major telecom operators - KT, SK Telecom, Hanarotelecom Inc. and Dacom. Land-based television stations and cable program operators, planning to have a part in the high-speed network project, are expected to provide investment as well.

U-City project - The U-City project is another integral part of the country's drive toward U-Korea. U-City is a national urban development project that focuses on strengthening the role of information and communication technologies in civic planning and management. The Ministry of Information and Communication recently established the Korea U-City Forum, joined by high-tech industry heavyweights such as KT, Samsung SDS Co. and public agencies such as the Korea Land Corp. The forum will focus on delivering industry standards for next-generation city projects and designing a supportive administrative framework. "We hope the forum can provide a floor for better communication and interaction between the government and companies. The idea is to take the separate U-City projects pushed by regional governments and private companies and fully integrate them with the national development policy," said Lee Geun-ho, a Soonchunhyang University professor and senior vice president of the Korea U-City Promotion Association.

The next-generation city project is aimed at building industry-wide partnerships between the high-tech and construction sectors to integrate advanced info-tech infrastructure to support the sustainable development of cities. The idea is to create environments in cities where residents can enjoy access to high-speed networks and enhanced information services at anytime regardless of location through a ubiquitous computing network. The government hopes the U-City project will strengthen Korea's status as an international technology powerhouse and establish itself as regional cluster and test-bed for world-class companies here and abroad. The project is also seen as critical to providing the infrastructure and generating a larger service market for next-generation communication technologies, such as sensor-based computing, radio-frequency identification applications and mobile Internet.

According to a report by KT, the market for U-City development projects will be worth between $15 billion to $22 billion by 2010. The company signed a memorandum of understanding with the city government of Busan earlier this year to head its U-City project. Regional governments have been laying out comprehensive plans to integrate advanced info-tech infrastructure in urban areas. Seoul has been pushing its Digital Media City project since 1998, which aims to develop the city's western district of Sangam-dong as a research and development hub for the high-tech industry. Providing an advanced networking environment is also a part of Incheon's intentions for New Songdo City, the next-generation city project scheduled for completion in 2014, while the island of Jeju has similar plans to develop itself as the country's next high-tech boomtown, focusing on developing vehicle-based information services and infrastructure.

Radio-frequency identification technology - Among the eight service sectors promoted under the IT839 strategy, many industry watchers expect radio-frequency identification technology, or RFID, to have the most significant long-term impact on the industry. RFID describes a method of identifying items using radio waves through an electronic reader communicating with a microchip embedded on objects that hold information. The technology is designed to improve efficiency in supply-chain management and inventory for companies in the manufacturing and retail sectors, while opening new market opportunities for electronic equipment and semiconductor industries.

Last year, the government announced plans to invest 162 billion won through 2010 to support the commercial deployment of RFID technologies in both the public and private sectors. The government expects the domestic market for RFID will grow to 4 trillion won by 2007 in equipment sales, while generating $760 million in exports. The Communication Ministry announced a plan that runs through 2010 to develop RFID networks at government agencies to support the technological development. Under the project, the National Veterinary Research and Quarantine Service plans to attach RFID tags to imported beef products during the first half of this year, strengthening the monitoring systems and guarding against emergency situations such as mad cow outbreaks.

The Korea Airports Corp., an affiliate of Korean Airlines Co., plans to invest 700 million to use RFID for freight control. The Defense Ministry said it is preparing to adopt RFID systems to manage its inventory of munitions and supplies starting this year. "It won't be long before RFID becomes a defining infrastructure of the country's manufacturing base. Interest in RFID is increasing here as companies continue to search for ways to improve productivity while reducing costs at the same time," said Kim Shin-bae, chief executive of Korea's largest mobile-phone carrier SK Telecom. Kim also heads the Korea Association of RFID/USN (ubiquitous sensor network) that is joined by government agencies and 105 companies involved with telecommunications, software and consumer electronics.

In a policy report to the President Roh Moo-hyun earlier this year, Communication Minister Chin Dae-je announced plans to push a 790 billion won ($784 million) project to build an industrial park for RFID technology in Songdo, west of Seoul, by 2010. Songdo, near the western coast city of Incheon, will host facilities for research and development, engineering and manufacturing of electronic tags and readers. Construction of major facilities will be completed by 2007 and production of active RFID tags and sensors will begin in 2008. The government will finance about 320 billion won of the budget, while the rest will be funded by the private sector. "The global equipment market for RFID will grow to about $90 billion in 2015, which is about the size of the current wireless handset market," said Chin, meeting with reporters shortly after the presidential briefing. "The deployment of RFID will be critical in the country's initiatives of developing into a Northeast Asian trade hub. With Incheon becoming the country's most critical trade and logistics center, it was a natural decision to locate the RFID hub in Songdo where the deployment process could be more efficient," he said.

Balanced regional development - The Songdo RFID complex will lead the government's plan to build high-tech industrial parks across the country to promote balanced regional development and lure more foreign technology investment. Aside from Songdo, the government is planning to complete a research and development base for software and digital content in Sangam-dong, Seoul, by 2007 under a 430 billion won project. Jeju is being promoted as a test-bed for vehicle-based information services, while Gangwon Province will be developed as the heart for the country's biotechnology industry.

Other plans include building an industrial complex for embedded software technology in North Gyeongsang Province, a research and development base in Chungcheong Province, a manufacturing base for optical fiber communications in South Jeolla Province and an industrial park for computer network-based logistics in South Gyeongsang Province. "The idea is to increase the role of information and communication technology to the existing industries that have grown separately in each region. This would help achieve further economic growth and balanced regional development as it would make companies here and abroad spread their technology investment that has been heavily concentrated in metropolitan areas," said Seok Ho-ik, director of the planning and management office.

From Korea Herald (subscription), South Korea - June 13, 2005

An Innovative Corporate Strategy

Poverty remains the major challenges for countries across the globe and continues to pose threat to humanity. Empowerment of societies has only been possible through economic development that improves access to opportunities for all. As a matter of fact, the global movement against poverty emphasizes on inclusive development. However, lessons learned from the past interventions in alleviating poverty has given rise to questions towards the approach in the first place, as billions of rupee poured in as aid has not helped in the cause. Meanwhile, private sector participation has received the highest level of acceptance than ever before in the poverty reduction endeavor, as the approach to deal with the menace has gradually shifted towards public private partnership (PPP). It is a paradigm shift that has a potential to extend resources for impact-oriented inclusive development. In essence, PPP is a tool to achieve entrepreneurial and socio-developmental benefits in a win-win situation.

Necessities change with time or, in that sense, follow the theory of 'hierarchy of needs' and this place ever-increasing demand for resource requirements. Single sector approach to meeting needs, especially by government interventions has proved insufficient. Government is often in deficit of resources and expertise to manage. While the private sector is known for its strength for better output through innovation, efficiency and effectiveness in delivery of services, the communities' access to services by private sector providers is limited due to the lack of state facilitation in improving their outreach. In addition, the rhetoric of civil society participation in the development tends to overlook the potential of meeting the demands through private sector involvement. However, PPP is gradually being debated with anticipation of utilizing the aid or taxed money productively.

While the debate continues on PPP approach and its application, it is usually spoken of generically. The government, private sector and the civil society represent the three pillars on which bases the inclusive public-private partnerships. Principally, through public private partnerships, the government can attract much-needed resources from the private sector. The private sector too can enhance businesses and the society can enjoy the opportunities to benefit from private services. Sadly, PPPs aren't moving fast enough as practical barriers in selling the concept and lack of trust among stakeholders continue to undermine the real development benefits. The government cannot and should not wait until private sector educates itself, but rather sell the projects without compromising transparency and accountability of using public funds. Naturally, the corporate sector would not hesitate to grab opportunities to maximize businesses only if the transaction costs do not exceed the benefits. On the other hand, external development partners should support initiatives by bridging the trust and resource gap between them.

In addition to the need of clarifying the roles of stakeholders in the PPP, defining its applications for various purposes such as 'service delivery', 'poverty alleviation' and 'infrastructure development' is another imminent challenge that faces PPP. It must be dealt with prudently to save PPP from becoming just another development fad. PPP will be lackluster if it uses one-size-fit-all approach in its application. Furthermore, the need to promote the concept by engaging the stakeholders has never been more urgent than it is today. While partnerships with small enterprises at local levels are happening sporadically, those need to be promoted through engaging larger corporations for improving coverage and capturing higher value. Business leaders around the world are emphasizing on meaningful partnership for success. Large companies that see competitive advantage in the long run have begun to venture in partnership as an innovative corporate strategy to reach the masses. However, their endeavors are either taken skeptically or linked to philanthropy. At present, long-running mindset to retain control over resources has been making the in the public sector hesitant to engage with sizeable corporate.

From Kathmandu Post, Nepal - June 12, 2005

Economy Minister Calls on Businesses to Boost Exports

Government has created favorable conditions for growth, he says - Economy and Finance Minister Giorgos Alogoskoufis yesterday called on business people to undertake initiatives to boost the country's meager exports and promised better coordination with state agencies. Alogoskoufis was speaking at the seventh meeting of the National Exports Council, a body of businesspeople and top civil servants. The minister outlined a number of measures initiated by the government, such as legislation on tax reform, investment incentives and the draft law on public-private partnerships and said these, along with efforts to cut through red tape and other counterincentives, provided a solid basis for a gradual rise in exports. Despite a slight improvement since 2003, Greece lags far behind other European Union countries in exports. The news that its exports, in absolute value terms, were less than Luxembourg's had made the headlines three years ago. The recent sharp decline of the euro has made it easier for Greece to export to non-EU countries, but marketing and product quality must also improve significantly, experts agree.

Alogoskoufis said Greece could no longer count on its traditional export products, such as farm produce and textiles, but must diversify its exports. He singled out oil products, pharmaceuticals, cosmetics and software as dynamic sectors that could play a more significant role. He said that the government is aware of the problems that are curbing Greek exports and added that this year will be marked by structural changes to boost their competitiveness. "We must confront the mistakes and weaknesses of the past that hurt export efforts... We are creating a better overall framework, based on fiscal discipline, a (favorable) tax regime, incentives for research and development and public-private partnerships," he said.

As part of its drive to strengthen the economy overall, the government will engage in a far-reaching dialogue with employers and employees on a range of issues, Alogoskoufis said. These include a more flexible labor market, ways for more effective absorption of EU funds through the upcoming Fourth Community Support Framework program and extending the use of information technology. Alogoskoufis promised state support for small and medium-sized enterprises, which often lack adequate means to market their products abroad.

Deputy Foreign Minister Evripidis Stylianidis assured businesspeople that the traditionally conservative diplomatic corps has accepted the need for an active promotion of Greek products abroad and that embassies were ready to provide advice and local contacts. Foreign economic relations, Stylianidis's brief, passed from the Economy Ministry to the Foreign Ministry in 2001. Stylianidis said the ministry had made special efforts to open up markets in Turkey, other Black Sea countries and the Eastern and Southern Mediterranean.

From International Herald Tribune, France, by Kathimerini Greece, June 3, 2005

European Union Summit Collapse is 'Historic Failure'

With France and Britain showing a complete unwillingness to compromise on the European Union's next budget, a major summit in Brussels collapsed on Friday. The EU is in a rut and it's not clear how it will get out. Jean-Claude Juncker wore a gloomy expression on his face, marked by the strain of a 15-hour marathon session of negotiations. The Luxembourg prime minister had to concede Friday night that the European Union had yet another fiasco on its hands with the failure to find an agreement on the union's next budget. "Europe finds itself in a deep crisis," he said at a press conference following the two-day summit in Brussels. The council had been "very close to a deal" and "differences were minimal, which is to say that some delegations did not have the political will to succeed." In other words: The European Union summit meeting had failed.

All day long, the leaders of the 25 member states of the crisis-ridden EU haggled non-stop over money. They attended working meetings, dinners, tete-a-tete meetings in pairs and small groups - all in an attempt to find a compromise deal on how to fill the EU's coffers in the future and then how deep each member state would then be able to dip its hands into the cookie jar. But those efforts were in vain. Britain remained steadfast in its unwillingness to accept any cuts to the annual rebate it has received on the EU budget since 1984 unless Brussels reduced its massive agricultural subsidies program. But the French were equally obstinate, categorically rejecting that request.

Then, the Dutch ventured their own gamble. They demanded their own rebate in the form of cuts to their EU budget payments to the tune of at least €1 billion. They were offered a compromise of €700 million, but The Hague brusquely rebuffed it. Then the Swedes demanded a massive reduction in their EU contribution. By that point, the summit had reached an impasse. Instead of sending out a signal that, even in times of crisis, Europe is capable of reaching agreement - as German Chancellor Gerhard Schroeder had hoped - this European event ended as a debacle. "I'm sad," Schroeder said. Luxembourg's Juncker, whose country currently holds the EU's rotating presidency, wanted to deliver proof to European citizens that "we provide answers and can negotiate." Instead, the opposite happened: The summit showed that the European community is deeply divided and is barely capable of acting.

Crisis brings opportunities - Nevertheless, it would be easy to exaggerate the situation. The fight over money isn't so bad that it will be impossible to resolve. There's still plenty of time to draw up a financial plan for the EU'S 2007-2013 budget period. Indeed, in the almost 50-year history of the European community, important decisions have almost always been made at the last minute. What is terrible, however, is the effect the fruitless summit is having in the media, which has deeply damaged Brussels's already disastrous image among the European populace. Planners intended for the summer summit in Brussels to mark a turn for the better - unfortunately, they instead got an historical failure.

The setbacks came early at this summit. Even before they were able to get to the budget, the most contentious issue on the agenda, the statesmen were forced to bury another European hope. Saying there would be an "intense period of reflection," Juncker announced a temporary suspension of the ratification process for the planned European constitution. The deal allows any country which has already begun its ratification process to bring it to completion. However, any country that doesn't want to provoke its citizens or its parliament with the symbolic European project right now, can also delay voting on the constitution as long as it wants. However, all sides ensured the other they would, at least in principal, stand behind the existing legal framework of the European Union. At the same time, one thing is clear to all participants three weeks after the failed referenda in France and the Netherlands: the foundation and superstructure of the European project chiselled out in the paragraphs of the constitution will never live to see the light of day. Not that it was democratic principals that led politicians like Danish Prime Minister Anders Fogh Rasmussen to call for a "period of reflection" - it was about the fear of a backlash among Europe's voters.

Voters in Denmark, the Czech Republic and Ireland are also threatening to reject constitutional referenda. And in Luxembourg, where Juncker had staked his own political future on a constitutional referendum, he was already at risk of being swept out of office on July 10. Now, just in time, the diminutive Grand Duchy's parliament can cancel what might have been a catastrophic referendum just in the nick of time. For their part, the British long ago brushed their planned vote aside. And as long as Jacques Chirac is still enthroned in the Elysee Palace -- a term that could last until May 2007 - there is no chance the French will return to their polling stations for a second vote. In Germany, President Horst Koehler has refused to sign the constitution until it is reviewed by the country's highest court despite the fact it has already been approved by both legislative chambers in Berlin - the Bundestag and the Bundesrat. This only serves to further overshadow the current dreary skies clouding the European landscape.

Where is Europe heading? Later this week, British Prime Minister Tony Blair will succeed Juncker as the EU's six-month rotating president. In that role, it will be his job to resurrect a stumbling Europe. It's something just about everybody dreads. The reason: Blair and the most of his compatriots have a completely different vision of what they want in a European community than do Paris and Berlin. Recently, one Blair advisor, speaking to others at 10 Downing Street put it this way: "You have to take this Europe, dismantle it and then put it together again." In some parts, there are fundamental differences in the contrasting visions. The social model favored by the Germans and the French, which is supposed to offer protection from the rigors of globalization, is considered antiquated by the British. Both the Scandinavians and the eastern European member states are following London's course. There are also differences of opinion in economic, defense and foreign policy.

Up till now, the European political actors have shirked any decisions on what direction the "European Train," as former German Chancellor Helmut Kohl called it, should be travelling in - should the next station be a large, liberalized market a la London or a political union to the taste of Berlin and Paris? The danger is that Europe's major powers, could block each other for years to come. In doing so, however, they risk maneovering the EU into a state of political and economic insignificance. Though the chances are small, the temporary suspension of the budget fight could actually provide the EU with an opportunity. EU leaders could use their time in the coming months to contemplate totally new budget plans. Even in the final financing proposal, 40 percent of the budget still would have gone to agricultural subsidies. Despite strenuous savings efforts, those subsidies would only have been reduced by 6 percent. Meanwhile, budgets for sectors like research and development and business development would have been trimmed by 40 percent. The EU promised its people that it would create rapid growth, modernize the economy and create new jobs. But that wouldn't have been possible with this budget.

Even the 10 new EU member states were anything but pleased with the budget compromise presented by Juncker. But in the 11th hour of the summit, even they sought to keep the summit from failing and turning into a debacle. In a dramatic plea, they offered to pay more into the budget out of their own national pockets in order to reduce the amount the British, Dutch and Swedish would have to pay. However, the proposal came too late to a ease the impasse. The haggling of the older EU member states, "to the last percentage," as Czech Prime Minister Jiri Paroubek said, was "ridiculous and disappointing for, and completely incomprehensible to us, new member states." Of all people, it was one of the summit's worst obstructionists, miserly French President Jacques Chirac who heartily agreed with the new member states. "We're in a pathetic situation."

From Spiegel Online, by Hans-Jürgen Schlamp and Frank Dohmen - June 20, 2005

No-deficit Policy Too Rigid, Economist Suggests

Ottawa — The federal government should stop fretting about balancing the books every year, an obsession that has contributed to a string of larger-than-expected surpluses, says a prominent Canadian economist appointed by Ottawa to investigate its poor fiscal forecasting record. Former Bank of Montreal chief economist Tim O'Neill says Ottawa's rigid, no-deficit policy is a central reason for a series of windfall surpluses totalling about $60-billion since 1997-1998 - and can be relaxed today. The policy made bureaucrats "overly cautious" in fiscal forecasting, he says. "A key conclusion of the analysis of forecast accuracy is that the government's commitment to never run a deficit under any circumstances has contributed significantly to the persistent upside surplus surprises," he concludes in a report released yesterday.

Finance Minister Ralph Goodale rejected the idea of abandoning the no-deficit policy, a defining feature of the Liberal government's record over the past decade, saying it has "served the country very well." Ottawa likes to boast that Canada is the only member of the Group of Seven industrialized countries consistently running surpluses. "Quite frankly, I would be very reluctant to do that," Mr. Goodale said. "That rule has taken Canada from being a fiscal basket case 12 or 15 years ago to being a leading country in the G7, G8 in terms of fiscal performance, discipline and prudence. "Frankly, it's not an approach that commends itself to me from a public policy point of view because once you deviate from the strict principle, then I believe you are very rapidly on a slippery slope." He said such an approach could lead to regular deficits.

Mr. O'Neill said the no-deficit rule is no longer necessary because Ottawa clearly understands the need to remain fiscally responsible. One of his central recommendations is that Ottawa discard its reluctance to run deficits and instead focus on running a surplus over time instead of balancing the books annually. The government should "shift from the no-deficit target to a fiscal rule of achieving a surplus, on average, over the economic cycle," he says, suggesting this average could be accomplished over five to seven years. "You don't have to abandon fiscal discipline, you just make an adjustment to it so that it's more flexible," Mr. O'Neill said. He said the recommended shift in policy would make fiscal forecasts more accurate by removing undue caution, and result in better forward planning on how to deploy government spending, whether it be to pay down debt or cut taxes. It might also mean that Ottawa slips into deficit in bad years. Conservative finance critic Monte Solberg said he thinks Canadian voters would punish any government that contemplated backing away from the no-deficit rule. "It's crazy talk," Mr. Solberg said.

"The last thing that federal politicians need is an excuse to go ahead and blow the budget." The belief that Ottawa should never run deficits has achieved widespread support among Canadian federal voters in the past decade, becoming the dominant orthodoxy. In fact, it's hard to find citizens in other countries as strongly anti-deficit as Canadians when it comes to their national government. "We have the zeal of converts," said Peter Donolo, who was communications director for prime minister Jean Chretien and now is executive vice-president of market research firm The Strategic Counsel in Toronto. "It's been the quiet revolution of the last 10 years in Canadian politics." He said that Mr. O'Neill's suggestion makes sense economically, but not politically.

The lesson of the 1990s - when Canada faced a dangerously high $42-billion deficit - has been seared on the national psyche, Mr. Donolo said. He said that Prime Minister Paul Martin, whose greatest achievement is still reversing the federal government's fiscal fortunes as finance minister, could never back away from the no-deficit rule, "particularly in view of his touch-and-go performance as prime minister." Mr. O'Neill made 14 recommendations. He said that if Ottawa isn't willing to discard its no-deficit policy, it should come up with a formal process for allocating windfall surpluses between tax reductions, spending and debt reduction. He also suggested that Ottawa offer more-frequent fiscal updates such as a quarterly report, and become more aggressive on paying down the federal debt. Mr. O'Neill was appointed to probe Ottawa's forecasting of its fiscal fortunes last fall, only weeks before Canadians learned that the federal government's budget surplus for the 2003-2004 year had unexpectedly ballooned to $9.1-billion from a projected $1.9-billion.

From Globe and Mail, Canada, by Steven Chase - June 21, 2005

Prime Minister Resigns after Civil Servant Strike, Oil Controversy

The prime minister of Sao Tome and Principe has submitted his resignation in the midst of a strike by civil servants and a row with the president over offshore oil, raising the prospect of early parliamentary elections in this small island state. Prime Minister Damiao Vaz de Almeida presented his resignation to President Fradique de Menezes on Thursday, saying his working relationship with the head of state had deteriorated to the point where the two men could no longer work together. He cited disagreements between Menezes and the government over how to deal with a civil service strike that began on Monday, as well as over the president's decision to bypass government in the controversial award of five offshore blocks to foreign oil companies in a joint development zone shared with Nigeria. If Menezes accepts the resignation of the prime minister, this former Portuguese colony of 140,000 people will face fresh parliamentary elections within three months. Legislative elections had previously been scheduled for 2006. They were due to take place alongside a presidential poll, in which Menezes was widely expected to seek a second five-year term.

Vaz de Almeida's MLSTP/PSD party, which lacks an absolute majority in the country's 55-seat parliament, could theoretically avoid early elections by forming a new coalition and presenting an alternative candidate as prime minister. But political analysts said that was unlikely, since the MLSTP/PSD has fallen out with its junior coalition partner, the Independent Democratic Alliance (ADI) of former oil minister Arlindo de Carvalho, who resigned last month. The MLSTP/PSD, which led Sao Tome to independence in 1975, issued a statement on Thursday calling for both presidential and parliamentary elections to be brought forward and held at the same time. MLSTP/PSD leader Guilherme Prosser da Costa is likely to be Menezes' main challenger at the next presidential election.

Carvalho, the former oil minister, quit the government last month over disagreements with President Menezes over how to proceed with the award of five new offshore blocks in the joint development zone shared with Nigeria. Several alleged irregularities had been revealed in the bidding process, which began in November last year. Critics said these irregularities had resulted in ERHC, a Nigerian-controlled oil company with no drilling experience, being granted a major stake in the most attractive of the five blocks on offer. President Menezes eventually over-ruled all the objections raised and signed a deal with Nigerian President Olusegun Obasanjo on Tuesday that awarded all five blocks to the consortia that had been selected.

ERHC, a US-registered company controlled by a millionaire supporter of President Obasanjo, duly received a controlling stake in the two most promising blocks where it bid in partnership with established US companies, and a minority stake in the other three blocks. Besides enjoying close ties with the Nigerian government, Texas-based ERHC also counts several former Sao Tome government officials among its shareholders. Nigeria and Sao Tome said in a joint statement that the award of this second batch of offshore blocks would trigger signature bonuses totalling US $283 million. Sao Tome, which is entitled to 40 percent of all revenues from the joint development zone, will receive $113.2 million of this windfall income. That comes on top of $49 million which Sao Tome is due to receive from a consortium led by ChevronTexaco and ExxonMobil in respect of an earlier exploration and production sharing agreement signed in February. Nigeria had earlier blocked Sao Tome from receiving any payment from the ChevronTexaco/Exxonmobil deal until it agreed to proceed with the award of the five blocks offered in the second licensing round. The twin-island state, which lies 300 km west of Gabon, now stands to receive more than $162 million in front-end payments before a single drop of oil has been discovered in its offshore waters. That is more than the tiny nation could hope to earn from 30 years of export income from cocoa, its traditional cash crop.

Anxious to receive an early share of this bonanza, the civil service unions began an indefinite strike on Monday to demand a more than three-fold increase in the minimum wage from $30 to $100 per month. Vaz de Almeida's government countered that it could only afford to raise the minimum wage to $40 per month, without falling foul of existing economic policy agreements with the International Monetary Fund and World Bank, and endangering negotiations to write off a substantial part of Sao Tome's $320 million foreign debt. The outgoing prime minister and the president have each blamed each other for failing to find a solution to the civil service pay dispute.

From Reuters AlertNet, UK, June 3, 2005

Alarm Bells Sound over Massive Loans Bankrolling Oil-rich, Graft-tainted Angola

UK's Standard Chartered bank criticised for its leading role in $2.35bn deal - Standard Chartered, one of the UK's leading banks in the developing world, is proud of its record in Africa. The winner of several awards for best foreign bank south of the Sahara, the bank has a $1m-a-year fund (£550,000) for community projects, taken from an operating profit across the continent of $200m. But you will search in vain to find a reference on its website to its activities in Angola. Which some see as curious, because Angola is the second-biggest oil producer in Africa, and that means potentially big money for international financiers. Standard Chartered, now chaired by the former BP executive Bryan Sanderson, is a leader in the field. "We were very excited," John Goodridge, director of the bank's trade finance arm, told a specialist magazine when he landed what it described as "the largest oil-backed transaction in the entire history of the structured-trade-finance [international finance] market." The deal last year, backed by a consortium of European banks including Barclays and Royal Bank of Scotland, was a loan of $2.35bn to Angola's state oil company, Sonangol. Repayments over five years are guaranteed from future oil production.

For Standard Chartered, as coordinating bank, the deal was a considerable commercial success and the pinnacle of its 16-year relationship with the country. With its liquid collateral, now being produced at a rate of more than 1m barrels a day, Sonangol had a good reputation for paying its debts. And the bank earned good fees and an interest rate at least 2.5% above the base London bank rate. For Angola, too, there appeared to be advantages as such a huge loan could never have been raised through the multinational institutions. At a stroke it was able to pay off $750m of debts to one of its largest creditors, its former colonial master, Portugal; and with oil prices rising steeply, Sonangol was confident it could offer prompt repayments.

Yet oil-backed commercial loans like this one go to the heart of concerns about Angola's ability to improve living conditions for its people. Those conditions are reflected in UN estimates that 70% of Angola's 11 million-strong population now live below the poverty line. In the UN's human development index the country comes 166 out of 177. Life expectancy at 36.6 is one of the lowest in the world, and infant mortality, at 191 for every 1,000 life births - is one of the highest. In short, the country desperately needs funds which are well directed. But commercial loans to Angola coordinated over the years by Standard Chartered and other lenders have been universally criticised by the World Bank, the IMF and leading NGOs, as expensive, lacking in transparency and fuelling a parallel economic system outside the budget which is wide open to corruption. The Economist Intelligence Unit put it succinctly in its country report for March 2005: "The high cost of such borrowing tends to be outweighed in the government's eyes by the absence of scrutiny, which has allowed the diversion of large financial flows."

In a valedictory interview in March, the British ambassador, John Thompson, called for more transparency from the Angolan government. Criticising the oil-backed loans, he said: "If Angola can negotiate with the IMF and develop a good working relationship, then that should free up concession finance [finance from institutions at favourable rates]. It could also lead to an agreement with the Paris Club [the main group of country lenders] in rescheduling official debt." A spokesman for the Department for International Development said: "We have concerns about the use of oil-backed loans in Angola. These loans reduce openness in public accounting." The scale of corruption in Angola has been documented by IMF reports, suppressed by the government, and by research carried out by the NGOs Global Witness and Human Rights Watch.

The IMF found that between 1997 and 2002 some $4.22bn went missing, equivalent to 12% of GDP. The US state department has said that Angola's wealth is "concentrated in the hands of a small elite, who often used government positions for massive personal enrichment". The scale of that enrichment has been revealed in the country's media which accused 10 of the presidential elite of having wealth of more than $100m each. The last Global Witness report said: "A major concern exists that Angola's elite will now simply switch from wartime looting of state assets to profiteering from its reconstruction." Simon Taylor, the Global Witness chairman, said: "There can't be a solution to Angola's problems without financial transparency. By providing these ... loans and refusing to be transparent about them, Standard Chartered is making itself part of the problem." But the circle of critics is drawn much wider. Multibillion-pound fund managers in the City of London, which monitor their investments for corporate responsibility, have pitched concerns about Standard Chartered helping "the notoriously corrupt Angolan government".

While there is no suggestion of illegality or corruption by Standard Chartered itself, one senior fund manager said: "The problem for the bank is that it can be accused of complicity in corruption." Says Craig McKenzie, the head of Insight, the ethical watchdog arm of the UK bank HBOS: "There's definitely a reputational risk with these loans." Karina Latvak of F&C Asset Investment, which has institutional investments of £125bn, notes that last year's loan was "very profitable", but adds: "However, it severely weakens the leverage of the IMF and undermines efforts to reform Angola's economy and make it more attractive to foreign investment in the long run." A group of six fund managers met Standard Chartered executives in May last year. The bank gave assurances about thorough due diligence and the Angolan government's improving record. But the managers wanted more answers. "The bank declined in a letter to respond to further questions," they reported.

Similarly, Standard Chartered declined to answer detailed questions from the Guardian about the number and size of loans it had been involved in with Angola or to respond to the criticisms of the World Bank and the IMF. "The facility [the loan] includes specific conditions on the use of proceeds. Along with the other international banks in the group, compliance with international regulations is paramount in the way we structure and conduct our business," the bank said in a statement. Lack of transparency and rampant corruption are the main reasons why Angola has been unable to win the confidence of the multilateral institutions that could lead to less expensive loans, debt rescheduling and increased credit worthiness. The core problem, says the latest World Bank report, is the role of Sonangol as a parallel treasury, handling the government's oil-backed loans. The system was put in place largely to raise money for arms during the country's disastrous 27-year civil war.

But since the peace settlement with Unita in 1992, the MPLA government has only slowly begun to open its books. "It's been a tortuous process," said one senior IMF official. Dismantling the parallel system "is likely to face obstruction from powerful vested interests". The Economist Intelligence Unit said: "Angola and the IMF have played cat and mouse over reform for years, largely because many but not all members of the Angolan leadership are strongly opposed to any deal with the IMF as some reform could disrupt lucrative arrangements that benefit them personally."

The government did take its first tentative step to transparency in 2000 when it hired the international accountancy firm KPMG to examine its oil revenues, although an investigation of honesty and integrity were excluded from the terms of reference. According to parts of the report the government has published, KPMG found a shambles in the accounts of Sonangol and the Bank of Angola with unaccounted-for discrepancies running to hundreds of millions of dollars. The finance ministry was in no better shape. KPMG concluded that no auditor could say whether the accounts gave a true picture of the company's finances and the central bank did not have a clue about the amount generated by oil production.

In its first corporate responsibility report, posted on the internet, Standard Chartered made its first reference to the controversy although, once again, the name of Angola is missing. The bank told the Guardian its website was being updated. The corporate responsibility report statement reads in full: "We try to be open about the lending decisions we make. During the year, concern was expressed by a small number of NGOs and Socially Responsible Investment analysts about our role as one of nine lead banks, in a $2.35bn oil-backed financing deal. This issue has been a focus for regular dialogue with SRI analysts and NGOs in 2004. The decision to support this transaction was undertaken after a significant amount of discussion. We accept that there are times when we will face disagreement from other stakeholders. It is difficult to provide full details of the process we undertook before making decisions such as this because of customer confidentiality."

From Guardian Unlimited, UK, by David Pallister - June 1, 2005

Country Needs Independent Anti-corruption Commission, Donors Say

Monrovia - Liberia needs to set up an independent anti-corruption commission because poor financial management and endemic graft are still plaguing the country's transitional government, according to a report by international donors. The Economic Governance Action Plan, a copy of which was seen by IRIN on Wednesday, said the power-sharing government, made up of representatives from the former warring factions and civilian groups, was doing little to tackle corruption. "An independent anti-corruption commission supported by donors, international partners and the government of Liberia is required," the report said.

The report was written by the United Nations, the European Union, the Economic Community of West African States (ECOWAS), the United States, the World Bank and the International Monetary Fund. It was handed to Liberian officials on Tuesday. "After more than eighteen months of intensive technical and policy advice and financial support, there is still broad-based weak financial management which has perpetrated systemic and endemic corruption," the report said. It said that this was undermining the implementation of an August 2003 peace deal. A senior government source told IRIN that the international donors had warned Liberia, which is struggling to recover after 14 years of civil war, that funding might be at risk. "They have made it very clear to us in government... that corruption and financial mismanagement would jeopardise further international assistance for Liberia's reconstruction programme if concrete actions are not taken to stamp it out," the source said.

International donor representatives met Liberian government officials in the Danish capital, Copenhagen, last month to review donor pledges of US$ 520 million intended for the country's recovery program. UN officials say only US $359 million has been handed over. The acting spokesman for the Liberian government, Bernard Waritay, told IRIN on Wednesday that the government would call a cabinet meeting to discuss the latest report from the donors. "The government attaches grave concern to this report and we will do everything possible to work along with our international partners who have been greatly supporting Liberia's peace process," Waritay said. Liberia's police chief, the president of the national assembly and three other parliamentarians have been suspended for corruption, but the transitional government denies corruption within its own ranks. "Media reports alleging widespread corruption in the (transitional government) are merely sensational and not based on proven facts and cases," it said in a statement issued last weekend.

From Reuters AlertNet, UK - June 1, 2005

President Presents His Roadmap to the Nation

Unity in the fight for development and against corruption were key themes of President Hifikepunye Pohamba's first State of the Nation address. Addressing both Houses of Parliament in the National Assembly chambers yesterday, the President told Namibians that the "superglue" holding the country together was unity. Nation building, he said, could not be achieved overnight, but he reminded the nation that Namibia's Independence came about as a result of this unity. "We should not forget that today we are the masters of this vast Land of the Brave, the land of our ancestors, because of unity. The destiny of this country is now fully in our own hands," he said. Unity, he noted, was a precondition to peace and development.

In a wide-ranging speech in which Pohamba documented progress in most sectors of Namibian society, he placed considerable emphasis on the need to boost the economy, saying it was vital in efforts to improve the living standards of Namibians. Government, he said, still faced a "mammoth" task in this regard and the high level of poverty in Namibia was a consequence of slow economic growth. While recognising that Namibia had made positive strides in many areas, the President said a lot still needed to be done. "The challenge before us is to search for technologies that are appropriate to our country, to identify appropriate partners and to move forward with renewed and sustained commitment, determination, optimism and hard work."

The President added that Namibia's economic policy reforms would continue to focus on addressing unemployment and poverty. "Economic reform is by no means an easy undertaking, but it is a task that we must face with courage and determination. The necessary reforms should include the enhancement of skills, promotion of labour-absorbing export sectors, improvement of access to finance, establishment of new financing vehicles such as venture capital and by increasing the local ownership of our financial sector," he said. The President said Government aimed to transform the economy from its heavy reliance on the production and export of raw materials towards industrialisation and manufacturing and in so doing expand the country's productive base, create jobs and effect skills and technology transfer. He expressed concern about Namibia's drop on the competitive ranking in Africa from fourth to fifth place and pledged to work closely with the private sector and trade unions to improve on this. The President said as a Government based on Swapo's principles, it strongly believed that education and training were key to achieving rapid socio-economic development. "We need to produce more sufficiently skilled and educated citizens for our workforce. Thus, there is a need to improve the quality of our education," said Pohamba. He said he hoped that Government's intentions to overhaul the education sector would help produce a better-equipped workforce. The President also emphasised Government's attention to the vulnerable groups of society, saying that it would continue to provide assistance in the form of grants.

Turning to the future, Pohamba promised that the Anti-Corruption Commission would be established soon, in line with his vow at the start of his term that he would root out corruption. Parastatals could also expect a tighter rein as legislation aimed at reforming their administration and management was introduced. A National Institute of Public Management and Administration to provide skills and training to civil servants is also in the offing. "We must hold dear and live by the values of transparency, openness and fairness in all that we do and say," Pohamba said to applause from both sides of the House. "Our civil servants and political leaders alike must set a good example for our citizens. We will serve our country well when we are honest, committed and work as a united team."

As he concluded a solemn address just shy of two hours long, Pohamba brought the House down as he raised his finger in typical Sam Nujoma fashion, warning that he was going to repeat a standard phrase of his predecessor. Adjusting his voice to emulate the former President to the T, he said: "A united people striving for the common good of all the members of society shall always remain victorious." Laughter drowned out his final remark that he believed in Namibia's future and that a brighter one could be achieved for the next generation through hard work and unity.

From AllAfrica.com, Africa, by Lindsay Dentlinger of The Namibian, Windhoek - June 10, 2005

Rogue Parastatal Managers Warned

President Hifikepunye Pohamba yesterday hit out at "unscrupulous managers" who milk State-owned enterprises to finance their own extravagant lifestyles instead of pumping the gains back into Government coffers for development. Addressing heads of State-owned enterprises (SOEs) in Windhoek, Pohamba warned that such practices would no longer be tolerated and that boards of directors at parastatals would now be elected on the basis of their capabilities instead of allegiance to certain individuals. Corrupt heads of parastatals or other employees would "face the full force of law", the President warned. He said Government would no longer tolerate what he termed "the disastrous state of affairs" in parastatals. "The nation is eagerly waiting to see action that we will take in order to address this unacceptable state of affairs," the President told them. He backed his statements with statistics and facts.

The President said the Medium Term Expenditure Framework for this financial year and the next indicated that only eight SOEs have paid dividends totalling a mere N$33 million. "It must be mentioned that this contribution falls far short of the State's financial assistance to some enterprises," he said. He said the commercial entities were established to reduce costs and to generate funds for development in socially deprived areas. Yet, some SOEs had failed Government and its people through the "sad truth" of corrupt practices as revealed by presidential commissions. "The commissions have revealed disturbing and shocking malpractices, misuse of funds, corruption and misappropriation of assets in some parastatals," he said. Pohamba said the State would no longer sit back and watch them destroy the nation's hard-earned cash. Government money was used to create SOEs and thus the State would ensure that they were efficient and productive. "The Government is going ahead with the reform of these enterprises, clarifying the role and mandate of the shareholder, who in this case is the Cabinet, and by delegating supervision and monitoring functions to the Central Governance Council, chaired by the Prime Minister, which shall serve as a policy-maker and overseer," he said. Pohamba said clear procedures and targets, to be monitored by the Central Governance Agency (CGA), would be developed and accountability at various levels of SOEs enhanced.

"Thus, the Government will ensure that the boards of directors of parastatals consist of professional individuals who are capable to supervise the management of these entities. Towards this end, the criteria for the appointment of such directors are being strengthened," the President said. His remarks were directed at SOEs that have let down Government and its people through corrupt practices and mismanagement of public resources. "To those performing parastatals, I can only say congratulations and keep up the good work," he said. Pohamba said he believed in the philosophy that those performing should be rewarded and "the corrupt elements should face the full force of the law and must be punished accordingly". He said a bill on the governance of parastatals would be tabled in Parliament soon and he would sign it as soon as it was passed.

From AllAfrica.com, Africa, by Christof Maletsky of The Namibian, Windhoek - June 10 2005

Minister Accuses Foreign Firms of Corruption

Some foreign companies in Africa are as guilty of corruption as the nations in which they invest, a Planning minister Anyang' Nyong'o told an economic summit yesterday. The minister said that while African corporate dealings were becoming cleaner, the bribes were higher because of increased risk of getting caught.

Global business leaders at the World Economic Forum (WEF) summit said Africa was winning the war on graft, often cited as a major barrier to trade and investment in the continent. This year's summit organised by the Davos-based WEF, is centred around an ambitious British-backed plan to revitalise African economies by opening trade doors to Africa and giving an extra $25 billion a year in aid. The blueprint, devised by the Africa Commission, also urges rich nations to crack down on bribery by their own firms abroad. Since publishing the dossier, Britain has been criticised for its failure to prosecute companies suspected of bribery and profiteering from war.

The Organisation for Economic Cooperation and Development cites the lack of prosecutions in Britain since its own anti-bribery convention came into force in 2001. Debt relief for Africa is also expected to be one of the main topics of discussion at next week's Group of Seven meeting of finance ministers in London. Nyong'o also said some multi-nationals appointed their local heads from among relatives of top officials of African states to run their operations, in order to get favours. "This is peddling of influence, and a component of corruption," he told a meeting meant to look at ways of cutting the cost of corruption to enhance business in Africa.

A discussion at the meeting listed poor infrastructure, which adds to the cost of doing business in Africa, red tape, lack of predictability and political stability as all ranking higher than corruption as barriers to investment. Nyongo'o said in Kenya - often cited by diplomats and anti-graft campaigners as a haven of corruption - patterns of vice were changing under pressure from anti-corruption laws demanded by donors. "If you're going to get away with it you have to play a very risky game. People are now asking a very high price - the cost of corruption has gone up because the stakes are high," he said.

Business leaders attending the summit said their perception was that corruption was slowing down. "It is possible to do business on this continent without corruption. If you want to do it the straight way, it is possible," said Lazarus Zim, chief executive officer of South Africa's unit of the world's second-largest diversified mining giant, Anglo American Plc. Graham Mackay, CEO of international brewer SABMiller has also told reporters there was a noticeable reduction in corruption on the continent: "My understanding is that corruption is dropping in Africa ... more of it is caught and stopped rather than more stuff starting."

From AllAfrica.com, Africa, by James Macharia of The East African Standard, Nairobi - June 3, 2005

Fighting Corruption in Ghana: CHRAJ Takes Charge

Initiates fresh moves, cites weak political will as major problem - In the face of recent widespread allegations of corruption among public officials in the country, the Commission for Human Rights and Administrative Justice (CHRAJ) is putting fresh mechanisms in place to ensure the effective discharge of its constitutional responsibilities. As part of the fresh moves, the commission is putting finishing touches to a document that would deal with the issue of Conflict of Interest (CI) among public officials in the discharge of their duties, which the Commission views as one of the major issues of corruption in the country. The document, expected to be ready by the end of July 2005, is aimed at complementing the provisions under articles 284 and 287 of the 1992 constitution, which talks about CI without expressly defining what constitutes CI.

"The absence of a definition of conflict of interest in the constitution, no doubt, makes investigations into matters of conflict of interest an uneasy task. To facilitate its investigations of conflict of interest, the Commission has produced prevention of conflict of interest Guidelines," the Acting Commissioner of CHRAJ, Madam Anna Bossman, said at a workshop yesterday. The commissioner pointed out at the workshop, attended by regional directors and other top officials of the Commission, that one of the major problems confronting the institution in the discharge of its duties was weak political will. She cited that during the last sessional address of the president to parliament, he (The president) stated that as part of the government's commitment towards fighting corruption, the anti-corruption institutions including the CHRAJ would be strengthened.

Madam Bossman expressed surprise that contrary to the president's promise, there was a large percentage decrease in the budgetary allocation to the commission, compared with the amount the commission received in 2004. "There must be political will from the very top to eradicate corruption. This enables the agency to be truly independent and free from interferences and influence," she said. The acting commissioner further cited lack of financial autonomy, insufficient funding from government, lack of enforcement powers, lack of prosecutorial powers as well as the absence or non-implementation of anti-corruption legislations such as the Whistle blower protection and Freedom of Information laws as other problems impeding the work of the commission.

Madam Bossman gave the assurance that CHRAJ had developed an intolerable behavior towards corruption, stressing that the Commission and the Commissioners would not allow themselves to be directed or controlled by any person or authority in the discharge of their functions, which were enshrined in the constitution. Touching on the work of the commission since its establishment, the commissioner said the Commission had so far handled a number of high profile cases. She named some of the cases as the investigations into allegations of corruption and illegal acquisition of assets made against four ministers of state and senior government officials during the NDC regime, the case of conflict of interest brought against President Kufuor by the minority in parliament, the case of car loans to Members of Parliament and what she termed, "The SSNIT probe."

Debunking recent public criticisms that the Commission had not been performing its duties effectively, she presented the statistics of the Commission's work, pointing out that between 1994 and May 2000, the head office of the Commission had handled 17 corruption-related cases including those of conflict of interest, between 2000 and 2004, 61 cases, adding that the office was currently investigating five corruption cases excluding the recent ones involving Dr. Richard Anane and President Kufuor over the Alexandria O'Brien and the "Hotel Kufuor" sagas respectively.

From AllAfrica.com, Africa, by Sulemana Braimah of Ghanaian Chronicle, Accra - June 17, 2005

Corruption Undermines Peace Drive in Liberia

United Nations - International agencies are pressing Liberia's interim government to crack down on corruption because it is undermining the peace process in the troubled West African nation, the United Nations said on Monday. A plan to improve economic governance in Liberia was drawn up last month in Copenhagen by officials of the United Nations, European Commission, World Bank, International Monetary Fund, the West African economic bloc ECOWAS and the United States, U.N. Secretary-General Kofi Annan said. The group drafted the plan after finding "financial malfeasance, lack of transparency and an absence of accountability" in the transitional government, Annan said in his latest report to the U.N. Security Council on Liberia. The interim government was installed in August 2003 when President Charles Taylor fled into exile in Nigeria after 14 years of on-and-off war in Liberia, an impoverished nation of 3.2 million people founded by freed American slaves.

The Security Council banned Liberian timber and diamond exports as well as arms deals in stages starting in 2001 after accusing Taylor of fueling war in the region through an illicit trade in arms for diamonds and other natural resources. The interim government is shepherding the country until a democratically elected administration can be chosen in balloting now scheduled for Oct. 11. While the authorities are making progress stabilizing the country, some have been blocking outside audits and investigations of suspected corruption, Annan said. There are also new reports Taylor is violating the conditions of his exile by keeping in touch with former business, military and political associates in Liberia and funneling money to several presidential candidates to try to ensure a friendly elected government, Annan said. "This issue requires the attention of West African leaders and the Security Council," Annan said. While the government has made progress in regaining control of its diamond and timber resources, much remains to be done and it is not yet time to lift the U.N. sanctions, Annan said.

From Reuters AlertNet, UK, by Irwin Arieff - June 13, 2005

Africa Commission Advocates Doubling Spend on Transport and Trading Infrastructure

As the Commission for Africa said, this is a year of great significance for Africa, an observation borne out by the concentration of the G8 heads of government on the severe economic problems faced by so many of Africa's deeply indebted nations. Saddling these countries with debts which cannot be repaid is now recognised as a major failure of economic and financial policy. The question now is whether debt relief will be regarded as anything more than a welcome easement of these burdens. The word is going round that debt relief is not enough, neither are 'aid and trade' policies as they have been practiced so far. It will not be an easy task to come up with remedies that mark out a new direction for the economic salvation of Africa.

The Commission for Africa agrees with the Zimbabwean correspondent quoted in the foregoing commentary that weak domestic governance is the factor that has most devastatingly undermined Africa's progress, describing African poverty and stagnation as 'the greatest tragedy of our time'. This weakness has been recognised by members of the commission who speak directly for Africa, people such as Benjamin Mkapa, President of Tanzania, Dr. William Kalema, Chairman of the Uganda Investment Authority, Dr. Anna Tibajuka, Under-Secretary General for the United Nations in Tanzania, Mrs. Linah Mohohlo, Governor of the Bank of Botswana, Meles Zenawi, Prime Minister of Ethiopia and Trevor Manuel, South Africa's Minister of Finance. Under the chairmanship of Prime Minister Tony Blair, prominent representatives of African opinion and their counterparts in the United Kingdom and Europe came to the conclusion that poverty on such a scale demands a forceful response.

They are calling for a 'big push' to break with the legacy of Africa's history. It doesn't seem that anything so bold will emerge from the G8 meeting at Gleneagles. The positive moves so far announced amount to debt cancellation, but this is by no means enough to placate those who are demanding more radical action. While debt relief has been widely welcomed as giving a breathing space to those countries which have given up paying the interest let alone the principal, the fear is that under current conditions this will only lead to is a new cycle of indebtedness. The Commission for Africa is advocating substantial economic growth as the route to prosperity. It suggests that donor countries can help to build accountable budgetary processes so that the people of Africa can see how money is raised and where it is going.
"This kind of transparency", it says, "can help to combat corruption, which African governments must root out. Developed nations can help in this too. Money and state assets stolen from the people of Africa must be repatriated. Foreign banks must be obliged by law to inform on suspicious accounts. Those who give bribes should be dealt with too; and foreign companies involved in oil, minerals and other extractive industries must make their payments much more open to public scrutiny. Firms who bribe should be refused export credits."

This is almost as radical a program of reform as any being urged by the non-governmental organisations which are keeping a close watch on the Gleneagles meeting and attempting to influence its outcome. But where the Commission for Africa demonstrates its policies for economic growth so strongly in contrast to other approaches is in the scale of its demand for massive investment in Africa's infrastructure. "Donors", it says, "should fund a doubling of spending on infrastructure." To this end, the Commission advocates changes in governance to make the investment climate stronger. "The developed world must support the African Union's NEPAD programme - the New Partnership for Africa's Development - to build public/private partnerships in order to create a stronger climate for growth, investment and jobs." This doubling of investment through public/private partnerships would run from rural roads and small-scale irrigation to regional highways, railways, larger power projects and information and communications technology (ICT). "That investment must include both rural development and slum upgrading without which the poor people of Africa will not be able to participate in growth." Anyone who has even a slight acquaintance with the state of affairs in rural Africa will realise how huge a task is being advocated here. There is more. "Africa faces two major constraints on trade. It does not produce enough goods of the right quality or price to enable it to break into world markets. And it faces indefensible trade barriers which directly or indirectly tax its goods as they enter the markets of developed countries."

So here are some indications of how leaders of African opinion are approaching the key issue of economic growth. The Commission does not say so directly, but the formation of public private partnerships to promote major development of the infrastructure should enable the developing economies of Africa to be released from their traditional dependence on borrowing from the multilateral development banks. This would call for greater reliance on finance through the types of banking consortium that have combined to assemble funds of the order of $20 billion to promote investment in natural resources. For the client countries, that would require support in the form of grant-based funding from agencies such as the International Development Association. But as the IDA said in its most recent funding report, this kind of aid can be made available only to countries where per capita incomes are low and the volume is currently restricted to around 30 per cent of IDA total resources.

The additional public expenditure needed to implement the Commission's package of recommendations in full is of the order of $75 billion per annum. In the first stage, from 2006 to 2010, they say that the rate of expenditure and total financing needed would be half that, $37.5 million, of which one third would be raised from domestic resources. The remainder would be extra aid, double the 2004 volume, produced by what is broadly described as the world community. "Much of this increase is already expected on the basis of prior commitments that donor countries have made to expand aid, but a doubling would require both delivery on these commitments and the generation of further resources." The Commission believes that Africa could indeed use the additional $25 billion of external aid effectively - assuming that governance and delivery continue to improve over the next few years. That of course is a fairly big assumption. But it could be done, they argue, within an overall increase of development assistance to the promised 0.7 per cent of donor countries' gross domestic product.

This report does at least demonstrate an alternative to borrowing against small security whjch in Africa has proved to be financially disastrous. The sense of the situation at present is that the G8 group of nations is prepared to take a step forward to lighten the burden of Africa's debt. It looks however as though they are going to get small thanks for this response to what has become a world-wide demand to lift from Africa's developing countries the weight of a burden with which for practical purposes many of them have already parted company.

From CIOB International News, UK - June 23, 2005

Palace: Negative Rating on Corruption Drive an Erroneous Public Perception

Malacanang said yesterday it considers the negative ratings of the Arroyo administration's anti-corruption drive as a challenge to do better even as it attributed the unfavorable poll results to erroneous public perception. In separate interviews, Executive Secretary Eduardo Ermita and Press Secretary Ignacio Bunye said the negative ratings should serve as a wake-up call for government agencies to work harder to stamp out corruption. Bunye said the Palace is encouraged by increasing support for its anti-corruption campaign from the business sector. "We see this (support) as part of a growing overall confidence in our efforts not just in putting our fiscal house in order but also in cutting leakage and waste and improving governance," Bunye said.

Ermita, on the other hand, said government agencies should intensify their drive against corruption as the public does not seem convinced that the government is serious about licking the problem. He said government officials and employees should not allow themselves to be tempted by grease money while he urged the public to resist bribing public servants. "It's a matter of perception," Ermita said. "If the people don't see or read in the papers who are being prosecuted or the kinds of corruption cases that are being resolved, people would think that the administration is doing nothing." He said President Arroyo is serious about fighting corruption and government agencies are doing their part. However, he acknowledged this effort has not been given full attention by the media. He called on the people to be vigilant and report incidents of corruption to authorities. Ermita also urged the country's businessmen to create a private body that would help strengthen the government's campaign against corruption. He said this is better than private firms donating part of their profits to the government to fight corruption.

The creation of a private anti-corruption body would encourage the public and other businessmen to cooperate with the government's efforts and report individuals or agencies engaged in corrupt practices, he said. United Against Corruption. The President's anti-corruption drive got a negative 30 rating from the public in the latest survey conducted by the Social Weather Stations (SWS), a copy of which was obtained by The STAR the other day from a subscriber prior to the release of the results. The SWS, however, said its survey rating on government's performance in fighting corruption entitled "Ratings of High Officials Tumble: Net Satisfactions with GMA falls to - 12" was published two months ago. The SWS said the results of the survey were published last March 30.

The negative 30 rating for eradicating graft and corruption was actually part of the question on public satisfaction with the national administration, the SWS said. Two other areas where the government got very low ratings were in "ensuring that no family will be hungry" and "fighting inflation," in which the government received -27 and -34 net ratings respectively. But whether the SWS survey was new or not, opposition and administration lawmakers agreed yesterday that there is an urgent need to address the rampant corruption in the country, now worsened by reports of government and police involvement in the multi-protection racket on the illegal numbers game jueteng.

Senate Majority Leader Francis Pangilinan urged the Office of the Ombudsman to step up its efforts to curb widespread corruption through aggressive prosecution of cases. Sen. Miriam Defensor-Santiago, on the other hand, admitted that jueteng is the most visible form of corruption in the country. Lawmakers also renewed their call for Mrs. Arroyo to certify as urgent the proposal to redefine plunder by lowering the amount involved to P25 million from P50 million to tighten the noose on corrupt government officials. Lakas-CMD Reps. Marcelino Libanan (Eastern Samar), vice chairman of the House committee on justice, and Isidoro Real (Zamboanga del Sur), vice chairman of the committee on good government, said the amendment of the plunder law will send more Gen. Garcias to jail and stop graft and corruption in government offices. Media Campaign Apparently trying to counter the negative press the Arroyo administration is getting over the jueteng inquiry, the President has embarked on a media blitz to inform the public of the government's efforts against corruption.

The President said she wanted to reach out to the people through the media, whose power to mold public opinion she acknowledged during a visit to the Lopez-owned ABS-CBN Broadcasting Corp. "Media is such an important part of our Philippine society. You are the source of news and information but you are also a very important influence in the thinking and actions of the people," Mrs. Arroyo said. The President was interviewed over dzMM radio and ANC, where she discussed her programs and admitted the need to better explain her actions to the public. Mrs. Arroyo also appealed to other media practitioners and entities to help her spread information about the government's various plans, programs and policies to the public. - With reports from Christina Mendez, Aurea Calica.

From Philippine Star, Philippines - June 3,2005

Public Also to Blame for Corruption: Arroyo Aide

Manila - Executive Secretary Eduardo Ermita said corruption in government could also be blamed on a public who gives bribes to government officers to hasten transactions or get the desired outcome. "Ang corruption, iyan naman ay hindi nangyayari kung wala rin namang bribery. Wala namang tatangap talaga kung walang naglalagay," Ermit said in a radio interview. (Corruption will not happen if there is no bribery. No one will accept any bribe unless someone offers it.) President Gloria Macapagal-Arroyo's executive secretary was reacting to a Social Weather Stations (SWS) from January 21 to March 15 showing that 66 percent of business managers in the country see "a lot" of corruption in the public sector while 54 percent of managers admitted to engaging in bribery to win both public and private contracts, even allotting 10-15 percent of their budget for it.

Ermita begged Filipinos to stop offering money so their transactions would be prioritized and instead be patient and follow procedures. About 36 percent of Filipino managers said their companies were asked for bribes in getting local government permits and licenses. Thirty percent experienced it while paying income taxes, 28 percent while getting National Government permits and licenses, 21 percent while complying with import regulations, 18 percent while collecting receivables from government, 16 percent while supplying government with goods and services, and 10 percent while availing of government incentives. Only eight percent, however, have reported the solicitation to either a public or private anti-corruption group.

The SWS survey also showed that the willingness of enterprises to fund a private sector anti-corruption program is now at a median 5 percent of net income. In Metro Manila, the number is at three percent. Ermita and Budget Secretary Emilia Boncodin objected to survey results showing the negative perception to the sincerity of government in its campaign against corruption. Boncodin said the result is unfair and not many public officials and employees are corrupt while Ermita said it is a mere perception that the government is not doing anything or is insincere in its campaign since the public has yet to see actual cases on corruption that have been filed and resolved and persons or officials actually punished for it.

Ermita said President Arroyo would not tolerate corruption in her administration and is intent in eradicating corruption in government. He added that the negative perception should serve as a wake-up call for the government. Arroyo's spokesman Ignacio Bunye said the negative perception should serve as a challenge for government to do better in its campaign against corruption. "But we are encouraged by the news of increasing support from the business sector for the anti-corruption campaign of the government. We see this as part of growing overall confidence in our efforts not just to put our fiscal house in order but also to cut leakages and waste and to improve governance," he added.

In the SWS survey, only the Securities and Exchange Commission (55 percent) and the Philippine Stock Exchange (52 percent) of the 26 agencies rated obtained net sincerity ratings of more than 50 percent (Very Good). Scores between 31-50 (Good) were obtained by the Supreme Court (48 percent), the health department (40 percent), and barangay government (31 percent) while agencies with "Very Bad" (worse than -50) scores were the Bureau of Customs (-75), Department of Public Works and Highway (DPWH) (-66), and Bureau of Internal Revenue (BIR) (-59). Those with "Bad" (between -31 and -50) scores were the Land Transportation Office (-45), Department of Environment and Natural Resources (DENR) (-44), Philippine National Police (PNP) (-42) and Armed Forces of the Philippines (AFP) (-38). The city, municipal governments, Department of Budget and Management (DBM), Ombudsman, Sandiganbayan, Department of Justice (DOJ) and Department of Education (DepEd) have scores between +11 and +30, called "Moderate". The Senate, Department of Interior and Local Government (DILG) and the House of Representatives have scores between -11 and -30 or "Poor" while scores between +10 and -10 (Mediocre) were obtained by the Office of the President, Commission on Audit (COA), Presidential Commission on Good Government (PCGG), trial courts, and Philippine Anti-Graft Commission (PAGC).

From Sun Star, Philippines - June 3, 2005

Abdullah: War on Corruption A Continuous Effort

The Prime Minister's war on corruption is a continuation of efforts from past administrations to purge the scourge from all levels of Malaysian society. Datuk Seri Abdullah Ahmad Badawi said his administration was focused on intensifying the fight against graft, just like that of his predecessor Tun Dr Mahathir Mohamad. Abdullah said the Government's continued war on corruption could be seen in numerous efforts to clean up the police and create a lean civil service. This was also coupled with an all-out effort to wipe out money politics in Umno, he said. "Not only are we taking action in the war against graft, but we are also instituting preventive measures to ensure that it does not spread," he said after chairing the Umno supreme council meeting today. Among the examples of these measures are the setting up of the Malaysian Integrity Institute, strengthening the Anti-Corruption Agency and cutting red tape in government services. Others are the establishment of the Royal Commission on Police and a taskforce to implement its recommendations.

From New Straits Times, Malaysia - June 2, 2005

Ruing corruption

President Susilo Bambang Yudhoyono's remark that certain members of the business community and the bureaucracy were resisting his anticorruption drive seemed like a cry for help, a warning and an alibi at the same time. His remark before members of the Indonesian Chamber of Commerce and Industry (Kadin) was quite poignant, noting that "businesses and (personal) interests had been severely affected by the move (to combat corruption)". It was a revelation to the nation and confirmed suspicions that while anticorruption and good governance are popular terms, "shortcuts" are still an accepted mode of doing business. Some, especially business practitioners, might argue otherwise. But the question then becomes which comes first, the chicken or the egg?

Corruption might not occur if business interests were not perpetually seeking unfair comparative advantages by using gobs of cash as enticements. On the other hand, kickbacks would also cease if bureaucrats - at all levels - stopped seeking to make a quick buck. The answer is then neither the chicken nor the egg, but simple greed. It is an ominous sign, either way. The President's statement could be interpreted either as a ceremonial moral call or a confession that he is not winning, perhaps even losing, the war on corruption. In essence, Susilo was saying that despite his best efforts he is being undermined from within the government. His very public admission of there being traitors in our midst means that this country has a long and rocky path to tread before we can even begin changing the culture of corruption. Nevertheless, while still lacking "trophies", it must be conceded that Susilo himself, unlike the leaders of previous administrations, is yet to show any inclination toward consolidating a network that exploits his privileged position. Hence public support is imperative to his efforts, which are often under appreciated. Continued public faith is the President's strongest weapon against an embedded culture of profiteering. It is time for us to renew our confidence in this difficult endeavor.

Making the statement at the opening of a Kadin congress was also a strategic move. It has been said that reformasi not only democratized the political system, but also democratized corruption with local players being as avaricious as their counterparts in Jakarta. Speaking before delegates representing regional and branch levels of Kadin, it was as if the President was saying "I know who you are and what you're doing". We can, hopefully, expect tougher measures from Susilo should "resistance" persist in the future.

Finally - and we dearly hope this is not the case - Susilo's remarks could also be interpreted as the first excuse for a failing campaign. Anticorruption was one of the most prominent platforms for which Susilo was elected. Failure to mitigate the practice would mark the failure of his presidency. Despite the obstacles presented before him, Susilo cannot simply blame the bureaucracy, the "system" or irresponsible individuals for failing to correct a structural problem. These are obstacles that he was fully aware of before he assumed the presidency. Susilo is the President. He has the power to act accordingly! Grumbling about the prevailing system only brings comparisons with his predecessor, who always blamed everyone but herself - past legacies, the bureaucracy, errant officials, the system - for her failure to deliver good governance. We are confident that the President has the leadership qualities and political will not to let certain predicaments weaken his determination to combat corruption.

Jakarta Post, Indonesia - June 11, 2005

Nation Gets Tough on Fraud, Smuggling and Corruption

Han Noi - The Ministry of Public Security reported they uncovered 176,534 economic crimes in the 12 years prior to 2005, including 9,960 cases of corruption. The report was released on June 8 at a conference to review, in the presence of Secretary and Head of the Inspection Commission of the Party Central Committee, Nguyen Van Chi, public security force operations against smuggling and corruption. Corruption has increasingly grown more complicated and larger in scale. The force said they have collected for the State budget VND4 trillion through fines and tax retrievals, and confiscated smuggled goods worth another VND4 trillion from 162,785 cases of trafficking and tax evasion. Agencies have prosecuted 13,892 people involved in economic crimes, including 4,797 smugglers and traffickers, and 4,007 corrupt officials.

On average, during the 1990s, the amount of money appropriated per case of corruption was VND710 million. The figure increased to VND810 million from 2000 to 2004. Cases have ranged from the oil industry and banking to a textile quota scandal in the Ministry of Trade. Police said one minister, five deputy ministers, and 14 chairmen or vice chairmen of people's committees at both provincial and municipal levels have been brought to justice on charges of corruption. False business contracts are a prevalent form. Many violations have turned up in the capital construction sector in the stages of design, approval, loan allocation, bidding, consultation services, supervision, and payment. The Government prosecuted hundreds of bank and treasury officials, as well as business directors, for management regulation violations that resulted in trillions of Dong of loss. Using police investigations as a basis, relevant agencies have prosecuted 116 cases of violating value-added tax reimbursement policies.

The conference focused on analysing the reasons and defining potential areas to look for corruption, and locating weaknesses in the current economic management mechanisms. Officials suggested that the Ministry of Public Security create a programme to prevent and fight corruption, smuggling and trade fraud. While preparing for Viet Nam's WTO accession bid, such a programme could research and find solutions to fight such criminals, officials said. Conference participants urged the Ministry to strengthen coordination with other relevant ministries and agencies, including the Government Inspection Agency and the Ministry of Trade. The Ministry of Public Security pledged to continue implementing the Party Politburo's instruction and the Prime Minister's decision on intensifying the fight against corruption, smuggling and trade fraud, and reported it will focus on research to help governmental agencies create a preventive mechanism and policies to limit these activities.

From Viet Nam News, Vietnam, June 11, 2005

Prime Minister Launches Own Graft Task Force

Prime Minister Thaksin Shinawatra is launching his own task force to monitor the assets of state officials in positions susceptible to graft abuse. The so-called "Prime Minister Task Force" would be appointed to keep tabs on the officials' asset records and their professional conduct, Mr Thaksin said. The team would be created through invocation of an administrative order requiring all officials in charge of positions serving the public which may be abused for personal gain to declare their assets and liabilities to the Prime Minister's Office through the team. The records would be kept in sealed envelopes only to be opened when corruption complaints were directed at respective officials. The documents would then be vetted for discrepancies, the prime minister said. "No civil servants should panic. It's just an ordinary report," he added.

Mr Thaksin said separate copies of the declaration would also be submitted to the National Counter Corruption Commission after its members were elected. Mr Thaksin said the records would be treated in strictest confidence to protect privacy and human rights. He maintained the team would not duplicate the NCCC's work but complement it. The team modelled its authority on a requirement enforced before the NCCC was set up that government officials had to make similar asset declarations.Mr Thaksin conceded that the authority to demand asset records from officials normally belonged to the NCCC. "But it's the government that is bombarded with public wrath (whenever corruption allegations surface). Do you understand?" he said.

The NCCC itself with only nine commissioners was overburdened with the sheer magnitude of graft cases. There are over two million public servants and state enterprise employees. "I don't think the NCCC can do the job on its own. We must help in any way we can within the boundaries of the law," Mr Thaksin said. Subject to mandatory asset declaration would be the officials whose job it is to come into contact with people. Scrutiny would place more emphasis on positions than the ranks. The task force, Mr Thaksin made it clear, would come directly under his supervision. Deputy Prime Minister Visanu Krua-ngarm was now scouting for suitable individuals to join the team.

From Bangkok Post, Thailand - June 11, 2005

Amendment Bill Altered 'for Clarity'

The constitutional amendment bill scrutiny panel has made some changes to article 3 of the government's charter amendment bill on the selection of members of the National Counter Corruption Commission for more clarity, especially in terms of politicians sitting on the NCCC screening panel. On Wednesday, a joint sitting of parliament accepted the government's charter amendment bill for debate, but rejected the opposition draft after the government and the opposition had been engaged in a fierce debate over whether politicians should be involved in the selection of members of independent agencies.

Chusak Sirinil, spokesman for the committee and also a member of the Thai Rak Thai party's legal team, said the panel yesterday resolved to change some wording of the government bill's article 3 which states that the two politicians sitting on the NCCC screening committee are the House majority leader and the opposition leader. After the change, the article states that one of the two politicians is to be selected from and by those MPs whose parties have no members in the cabinet, while the other is to be selected from and by the MPs whose parties have members in the cabinet.

"The essence of this article is to follow the wording of article 120 which does not say which side is the majority or the minority and which side is the opposition or the government, but mentions representatives of the MPs whose parties have cabinet members, which is the government, and representatives of the MPs whose parties have no cabinet members, which is the opposition," he said. Mr Chusak said the scrutiny panel agreed to maintain part of the provision that the NCCC selection panel must consist of six representatives of state university rectors as well as the chiefs of the Supreme Court, Central Administrative Court, Constitution Court, National Human Rights Commission, Auditor-General's office, Election Commission, and Office of the Ombudsman. The panel meets again on Monday to finalise the draft to submit to the lower house for consideration on Wednesday.

From Bangkok Post, Thailand - June 11, 2005

Corruption-Thailand: Government Beyond Accountability Looms

Bangkok - Four months after he was re-elected by an unprecedented majority, Thai Prime Minister Thaksin Shinawatra faces a corruption scandal the outcome of which could define the tone of his second term in office. The question this has given rise to is: will Thaksin and his party become absolute rulers? Thaksin's Thai Rak Thai (Thais Love Thai, TRT) party has sufficient seats in the 500-member parliament to avoid being subject to a censure motion by the opposition Democrat party. Such motions launched by the opposition have traditionally served as a pivotal mechanism to check the power of the government.

The current edge enjoyed by the TRT - it has 377 seats in the legislature - means that for the first time in this South-east Asian nation's young democracy a governing party will be above this parliamentary form of accountability. "It is a very dangerous situation," a professor of political science from Bangkok's Chulalongkorn University told IPS, speaking on condition of anonymity. "We have never experienced a government like this before, which is beyond censure." The smugness that such political security brings was evident all this week as Thaksin and a senior government minister declared that there was no trail of bribes paid during the purchase of expensive security equipment for the country's new airport.

On Tuesday, Thaksin told reporters that a report by a government-appointed team to investigate the airport ecurity-scanners scandal would exonerate government officials and politicians of the alleged corruption charge. And when the contents of that 800-page report were revealed Thursday, Deputy Prime Minister Visanu Krue-ngarm supported its conclusions by making public a letter from the U.S. Justice Department. The letter stated that there was no evidence of kickbacks to Thai officials during the sale of 26 CTX9000 explosive-detection scanners. Yet critics of the government are not convinced, since a fundamental issue at the heart of this scandal remains unresolved: the discrepancies in the prices of the equipment offered by InVision, the U.S. supplier of the equipment, and the amount officials at the Suvarnabhumi International Airport paid to Patriot Business Consultants Co. Ltd., a Thai firm that brokered the deal. InVision had offered the 26 security machines for 35.8 million U.S. dollars to Patriot, which resold the equipment to the new airport's authorities for 46 million dollars.

"There has been some price rigging. The government has still to provide answers why there is a difference in price," Nirand Pithakwatchara, a ranking member on the Senate committee conducting an independent investigation into the scanner deal, told IPS. "The U.S. Justice Department may have no evidence of corruption on their side, but we have a lot of evidence about what happened in Thailand,'' he added. ''This case is far from over. Something went wrong and the system must be exposed." Such pressure from the Senate could help strengthen the only available alternative for the Thai public to hold the Thaksin administration accountable in this scandal. That is to launch a campaign to secure at least 50,000 signatures to introduce a motion in parliament aimed at impeaching Suriya Jungrungreankit, the minister of transport, whose name has been linked to this alleged corrupt deal.

This political climate of an administration not subject to checks and balances has been made worse by the collapse of the country's only independent anti-graft body. In late May, the nine-member National Counter Corruption Commission was found guilty by the Supreme Court's criminal division for illegally awarding themselves a pay rise. For such an abuse of power, the nine anti-graft commissioners received a two-year suspended jail term. The airport equipment scandal, which has dominated the headlines since late April, is the latest in a long list of corrupt deals that have plagued this country. Last September, for instance, an anti-graft activist charged that politicians and state officials had pocketed up to 300 billion dollars in bribes over a decade. The new airport being built east of Bangkok at a cost of 3.1 billion dollars has been among the mega-projects tainted with corruption, among which were questionable land deals. Thailand's police have also helped themselves to illegal funds, including 475 million dollars from gambling dens, 275 million dollars from an underground lottery and 8.5 million dollars from massage parlours, according to a study by an academic from Chulalongkorn University.

Consequently Thailand has earned low scores in the annual 'Corruption Perception Index' of Transparency International, the global anti-graft watchdog. Over the past three years, Thailand has received scores between 3.2 and 3.6 on a scale that places the most corrupt countries close to "0" and least corrupt countries close to "10." Yet at the same time, the arrest of senior political figures for corruption here is rare. Last October, a former public health minister was arrested a year after he was found guilty of a bribery case involving overpriced medicines. That was viewed as an exception by the local media. But the public is concerned about such rampant corruption as reflected in regular opinion polls conducted here. One survey at the beginning of this month by the Suan Dusit pollsters revealed that corruption was the second leading area of the Thai public's concern, after the escalating violence in the south of the country.

Yet the chances of holding members of the government linked to corruption accountable have all but vanished under the current parliament, said the political scientist from Chulalongkorn University. "This first major scandal for Thaksin in his new term will reveal what we can expect in the next four years." He fears absolute rule, given the aversion Thaksin displayed during his first four-year term (from January 2001) towards any form of accountability. "He used the Thai Rak Thai's majority then to avoid censure motions against his cabinet ministers," said the academic.

From Inter Press Service (subscription), World, by Marwaan Macan-Markar - June 11, 2005

Survey Finds That Corruption Is a Major Concern for Afghans

Corruption has emerged as a major impediment to Afghanistan's reconstruction efforts, according to a recent US-commissioned survey in the war-ravaged nation. Independent policy group, the US Centre of Strategic and International Studies (CSIS), commissioned the poll in April and conducted 1,609 interviews. Afghans said they supported the central government of President Hamid Karzai, but "do not trust or rely on local and provincial government due to widespread corruption." The centre's Voices of a New Afghanistan report said "local warlords, particularly in the west, south, and east of Afghanistan, continue to flout the rule of law and undermine governance." Afghans viewed security as a major concern and were fearful that Afghanistan would erupt into violence without the international military presence. The Taliban regime was ousted by Afghan and US troops three years ago, but loyalists have continued a violent campaign.

The survey also said there was "no functioning, formal justice system" in Afghanistan, adding that "individual rights are poorly understood and poorly protected, especially for women." Reconstruction efforts had not succeeded in creating enough jobs for Afghans, it said. The survey found that while growing opium poppies provided a viable livelihood for some people, the majority of Afghans believe the crops are bad for their country's development. Afghanistan is the world largest opium producer, accounting for almost 90 per cent of the world's opium in 2004.

From Radio Australia, Australia - June 14, 2005

Survey: 78 Percent of Koreans Consider Corruption Level Serious

It was discovered that eight out of 10 Korean people view the level of corruption in the country as serious, and that the regional monopoly by a specific political party is the main reason of corruption. In addition, a survey found that people generally think the country's integrity rating is only half that of a developed country. On June 16, the Council for Transparent Society and Agreement announced that it found the above results in a public awareness survey conducted on 2,000 adult men and women aged over 20 from 16 areas nationwide, and 501 experts, including professors and lawyers.

According to the results of the survey by the council, 78.9 percent of the public and 77.6 percent of the experts answered that the corruption level in Korea is "serious." In particular, 30.9 percent of the public replied that Korea's corruption level is "very serious," and 48.0 percent consider it as "serious," while a mere two percent of the public view it as "not serious." The above result shows that most of the public is having a consciousness of crisis regarding the level of corruption. When asked to evaluate Korea's integrity rating with the level of corruption in a developed country equivalent to a score of 100, both public and experts gave scores of less than 60 to Korea. In addition, 40 percent of those surveyed replied that it will take more than 10 years for Korea's integrity rating to reach the level of a developed country, and over 20 percent said that it would take more than 20 years or it would never happen regardless of time.

From Donga, South Korea - June 16, 2005

WB Grants Philippines $300,000 for Anti-corruption Efforts

Manila - The World Bank on Tuesday announced a 300,000-US dollar-grant to the Philippines to strengthen its anti-corruption efforts. The WB country's office said in a statement that the grant willhelp the Internal Audit Units of the government agencies to more effectively perform their functions including procurement monitoring and enforcement in conformity with international standards. According to the organization, the grant will fund the activities including quality assessment of the internal audit function, development of an internal audit manual with appropriatefocus on procurement review and monitoring, and development of a national training program for internal auditors.

The WB expects corruption to be contained through the establishment of adequate internal controls particularly in the procurement process. "We are glad to sign this grant as it will help fight corruption and support better governance in the public sector, which is key to the overall development agenda of the country," WBCountry Director Joachim von Amsberg said. Presidential Anti-Graft Commission Chair Constancia de Guzman said that the project will help ensure the proper implementation and enforcement of the new Procurement Law. According to the WB, this grant is its third of a series of procurement reform grants to the Philippines.

From Xinhua, China - June 13, 2005

Part of Privatisation Earnings May be Spent to Curb Poverty

Karachi - The Privatization Commission of Pakistan is proposing to the government to institute a separate and independent poverty alleviation fund based on 10 per cent of the privatization proceeds. "A few cabinet ministers have discussed the idea informally amongst themselves and would take up formally with the Cabinet Committee on Privatisation [CCoP] headed by the Prime Minister in near future," a senior government official said Saturday. Once cleared by the CCoP, the proposal will come up before the cabinet, which would give it formal shape. The proposed fund managers will design their own projects and will keep the National Assembly and the Senate informed about the investment and the results of the funded projects.

Under the Privatization Law 2000, 10 per cent of the privatisation proceeds are to be utilised for the poverty alleviation and 90 per cent goes towards debt clearance. The 05-06 budget show Rs20bn privatization proceeds as government revenue which many law practitioners and constitutional experts believe is illegal and unconstitutional. Legal practitioners say that the Privatization Commission should give a yearly account of the proceeds it has obtained and inform the people about the clearance of domestic and foreign debts and specific poverty alleviation projects in which its money has been put.

A full disclosure of the proceeds being obtained from privatization of big and small public enterprises and the investment of these funds in the two specific channels identified in the Privatization Law has become all the more relevant and pressing when public auction of a giant telecom enterprise is due on Saturday and a decision on disinvestment of the monopoly utility the Karachi Electric Supply Corporation is also being taken on Saturday by the Cabinet Committee on the Privatization. In last more than 17 years - since 1989 when Benazir government divested a very small chunk of PIA shares and in 1991 when the Muslim Commercial Bank was auctioned in a controversial transaction - more than 140 public sector units have been privatized partly or wholly fetching about Rs145bn. But never for once, the successive governments during all these periods from 1988 to 2005, informed the people of the spending of the privatization proceeds.

From Peninsula On-line, Qatar - June 18, 2005

'Domestic IT Market Growth May Soon Exceed the Exports Segment'

Even as Indian IT and IT enabled services (ITES-BPO) continue to chart remarkable double-digit growth, the country remains under-invested in IT capital and the domestic market has not grown, says NIIT chairman RS Pawar. However, the wheel is slowly turning in more ways than one. "At the level of the government, IT deployment is beginning to happen. I anticipate a further acceleration of IT absorption in the domestic market. In the next few years, we should see the growth rates of the domestic market matching, if not exceeding those of the exports segment," he says. In an interview with Sudhir Chowdhary, he details the roadmap for growth of the domestic market. Excerpts:

Do you think despite India's IT prowess, the country remains under-invested in IT capital and the domestic market has not grown? Did the strategy employed by the industry to focus on exports, lead to lower IT uptake in the domestic market? I think if you look at Nasscom's annual report this year, the exports market is a few percentage points ahead of the domestic market. However, the latter is building up quickly. This is a significant development. Undoubtedly, we need to do a lot more on the domestic front and deploy technology for national development. The Indian IT sector grew by meeting the unfulfilled demand for software in the developed regions like the US and Europe. The IT sector responded to this demand in the late '80s and '90s.

Where did we lag behind? I remember saying that it was important for the government to earmark around 2-3% of its annual budget for IT. This was needed as there were only stray initiatives at the behest of individuals but no actual systematic process. It took the better part of the 1990s for the government to start formulating policies. Therefore, while the corporate sector was using IT, the governmenta segment where the big volume transactions were taking place wasn't. It was in the second half of the 1990s that a number of state governments started creating their IT policies in quick succession.

Have things changed for the better now? Today, I think one can say that in the case of the country's largest spender, the government, we have found a systemic framework to introduce IT. Of course, when we see the overall scenario, we find that some states have gone ahead of others in inducting IT. Is the e-governance issue becoming big? Definitely. We are now finding that policy formulation on e-governance is becoming a big preoccupation of the state governments. If you look at the ministry of IT and the investment figures of tens of thousands of crores that they are talking about, you know what I mean. We have crossed the policy formulation and planning phase of such projects and moved into the implementation stage.

Is the government sector waking up to embrace IT? It is beginning to happen. I anticipate a further acceleration of IT absorption in the domestic market. I guess in the next few years, we should see the growth rates of the domestic market matching, if not exceeding those of the exports segment. It has taken a decade to build this momentum in the domestic market. Until there is greater IT penetration in the country, the Indian economy is unlikely to benefit from technology. Do you agree? What can be done towards this end?

It's crucial for us to start looking at the pervasive use of IT in all sectors in India. It's important for the government to set goals for IT investments much like companies set goals for IT spending in their annual budgets. The government has unveiled some good initiatives like the National Institute of Smart Governance (NISG). These should be leveraged to build capability in each and every state. We need to see how to build capabilities within the government to manage IT. Many more such initiatives are necessary for capacity building.

Are the trade and tax policies conducive to the robust growth of the domestic IT industry? I think the country has been extremely supportive of the growth of the IT industry. Now, what we are saying is that the government should bring in policies, which encourage all sectors to embrace IT. Rapidly declining telecom costs and pervasiveness is making internet possible. What we have to do on the PC side is to look at more aggressive price points to bring technology and content within reach of the masses. The internet is already connected to palmtops. Net connections through low-cost devices is a new phenomenon, which is already gaining visibility in India. Indian companies content are developing content for the world. We need initiatives to synergise low cost connectivity and innovative technologies .

Are there fears of manpower shortage in the years to come? I think we are again in a period where there is a shortage of people. Human capital is becoming an important issue and in the area of education. The role of the non-formal sector is to work hand-in-hand with the formal sector to manage this flexibility and growth.

From ZDNetIndia, India,, by Sudhir Chowdhary - June 22, 2005

State Administration Tightens Grip on Corruption - Report

There is a steady tendency of a decreasing number of signals on corruption, which indicates considerable progress in the fight against corruption, according to an annual report released by the government. In 2004, the Interior Ministry received a total of 160 signals of corruption, the Social Ministry - 18, and the Customs Agency - 12, while citizens sent 387 signals in total. The government approved Thursday its Fifth Report on the state administration in 2004, based on the implementation of the Strategy for modernisation of Bulgarian state administration. There are 85,340 state officials working in the administration now, the Council of Ministers announced. It added that in 2004 alone a total of 2,521 public contests were announced for vacancies in the state administrative structures. As a result, the number of state official has increased by 3.5%. The government reported also considerable changes in the administration in compliance of the recommendations written down in the 2003 Regular Report of the European Commission on the enforcement of EU acquis communautaire in Bulgarian legislation. The administration of Bulgaria has improved the access to public information through, among others, the development of an e-government and a system of public exchange of information.

From Sofia News Agency, Bulgaria - June 2, 2005

Bulgaria Issues Responsible Business Guide

A special directory for the ethics and responsibility practices of the Bulgarian business was officially presented on Friday by the Bulgarian Business Leaders Forum (BBLF). The 2005 Responsible Business Directory has been prepared especially for international investors. It contains the profiles of 70 local and world companies, with their contacts and information about their care for the society, the young people and the company employees, the efforts to improve the quality of Bulgarian education and to preserve the natural environment. The UK Ambassador to Bulgaria Jeremy Hill, whose country is about to take on the EU presidency, was the first one to receive a copy of the English-language edition of the Responsible Business Directory.

"Our goal with this directory is to present the Bulgarian business in a different way and to promote Bulgaria as a fast developing yet predictable market, observing the rules of business ethics and fair competition," BBLF Chairman Maxim Behar said at the premiere of the business guide. "I am convinced that whatever party wins the upcoming general elections, it will be the business not the politicians that will lead Bulgaria into the EU," Mr Behar added.

From Sofia News Agency, Bulgaria - June 3, 2005

Business-Watchers Cite Corruption, Red Tape, As Main Obstacles to Development

The World Economic Forum is taking place in the Ukrainian capital Kyiv. The large international gathering has brought together politicians and businesspeople to discuss problems related to Ukrainian development and the economic obstacles currently facing the country. Many point to bureaucracy and corruption as the main roadblocks to the country's growth.

Ukrainian Economy Minister Serhiy Teryokhin says the administration of President Viktor Yushchenko has made progress since the Orange Revolution in eliminating red tape and corruption "at the central level." But he says that much work remains. "Old bureaucracy [is the main problem]. Old bureaucracy is still [present] on the local level, and unfortunately we failed to overcome corruption within these four months. We still have a rather high level of corruption," Teryokhin says. Teryokhin says a number of reforms are needed urgently. But with parliamentary elections coming next year, he says few politicians are willing to risk their approval ratings by pushing through painful and unpopular policy changes. "Unfortunately, we have elections next year, you know. So, we should be a little bit populist. We do not want to be, but we still cannot stop unfair privileges for some [people]. For example, our prosecutors are getting enormous privileges - they can use transport without paying, they have a pension that is 90 percent of their salary. It is absolutely crazy," Teryokhin says. "Too much regulation; too much bureaucracy." He says prosecutors are not an exception. All members of the political elite enjoy similar privileges, including members of the Ukrainian Parliament and members of the cabinet. However, Teryokhin says the reforms will start in earnest if the parliamentary elections solidify Yushchenko's power base.

Teryokhin says poverty remains another major problem. The government's doubling of social benefits, while a popular step, left the country's budget situation dire. The benefits hike and plans to revisit some privatization deals are backfiring, Teryokhin says - something that is making it difficult to lure serious foreign investment to Ukraine. Augusto Lopez-Claros directs the global competitiveness program at the World Economic Forum, and has been in Kyiv for this week's two-day meeting. He says Ukraine is notorious for corruption.

"Transparency International in its latest report ranks Ukraine 126th out of 144 countries [in the corruption list]. But we are not talking about a small and poor country in Africa. We are talking about a country where per capita income is fairly high, a country that has pretensions of joining the European Union. I think that in the longer term, Ukraine should belong to the European Union, but not before it addresses this issue of corruption, because the standard in the rest of the European Union is much higher," Lopez-Claros says. Lopez-Claros says corruption is only part of a broader problem in public management. "Many of these challenges are in terms of the quality of public institutions in the country. Too much regulation; too much bureaucracy. There have been complaints, for instance, of inefficiency in the judicial system, which is a very, very important component in establishing a good business environment for the development of the private sector," Lopez-Claros says.

Lopez-Carlos says the international business community expects the new government to move forcefully forward, but it will be a rough road. He notes the social benefits hike has left the country facing inflation that has reached 14 percent and continues to grow. Last year, Ukraine's inflation rate was 9 percent. Members of the Ukrainian business community have expressed concern that the new government still resorts to old tactics, granting benefits to certain firms, particularly those in the vital oil sector. Economy Minister Teryokhin told RFE/RL that the Ukrainian public and foreign investors should forgive the cabinet for the mistakes it makes, because "we are all youngsters here." But Western business leaders speaking at the World Economic Forum stressed that there is no time for such mistakes, and that the West should begin consulting with Yushchenko and his fellow reformers to remedy the situation as soon as possible.

From Radio Free Europe, Czech Republic, by Valentinas Mite - June 17, 2005

Kuwaiti Parliamentarians Set Up Anti-corruption Unit

Kuwait City - A group of serving and former Kuwaiti MPs have said on Thursday they have set up a local unit of a worldwide organization fighting corruption amid allegations of rising graft in the emirate. The Kuwait chapter of the Global Organization of Parliamentarians Against Corruption (GOPAC) was launched at a meeting held Tuesday by nine MPs and eight former lawmakers, they said in a statement. The meeting was called by Islamist MP Nasser al-Sane, who is vice chairman of GOPAC and head of the Arab chapter.

The parliamentarians said they formed the unit to "combat all forms and shapes of corruption and educate people about its risks on society and its moral values". "Our country Kuwait is not safe from the evils of corruption and its destructive impact, which requires consolidated efforts at all levels to eradicate it from the country," the statement added. The chapter becomes the third anti-corruption unit of GOPAC in Arab parliaments, after the Palestinian Authority and Yemen.

The Berlin-based graft watchdog Transparency International said in its report last year that a rise in perceived corruption had been observed in Kuwait, which went up from 35th position to 44th among 146 countries surveyed. In April, several Kuwaiti MPs called on the state minister for cabinet affairs, Mohammad Daifallah Sharar, to quit over graft charges, some of which had been confirmed by the Audit Bureau, the state's accounting watchdog. GOPAC, which includes 250 parliamentarians from 72 countries, was formed in 2002 to promote accountability, integrity and transparency, and to combat corruption.

From Khaleej Times, United Arab Emirates, June 3, 2005

Official Says Fight Against Corruption Progressing

Sanaa - In a seminar held Saturday to discuss technical cooperation between Yemen and Germany in fighting corruption, Presidential Office Chairman, Ali Al-Ansi said "the joint Yemeni, German cooperation in fighting corruption is witnessing a tangible and positive progress and it's almost giving its expected fruits hoping to achieve utmost transparency and safeguarding public fund and eradicating the phenomena of corruption." He added "President Ali Abdullah Saleh has always given the issue of fighting corruption his utmost attention and painstakingly follows up all the outcomes achieved in this field which has become a major concern."

Meanwhile, Minister of Civil Service Hamoud Khaled Naji stressed the urgency of "job categorizing" saying "job categorizing is essential in fighting corruption and has always been one of the factors that led to the prevalence of corruption,"adding "before the unification we started a campaign to classify jobs but it was halted." He added "President Saleh considers fighting corruption one of the most important national issues which must be given priority." Meanwhile, Chairman of German Technical Cooperation Association (GTZ) Halmout Grouz [sp.] said "the main reason for the joint Yemeni, German cooperation is not to study cases of individual corruption but rather to exchange expertise that will increase the level of financial and administrative reform measures for the state in an effort to reach good government." More than 60 state employees attended the seminar.

From Yemen Times, Yemen, June 2, 2005

Syria's President Targets Corruption, the Economy

Party Conference: The Baath Party, under pressure internationally and also from within, is expected to introduce some free-market reforms. Syrian President Bashar Assad opened a conference of the ruling Baath Party yesterday by urging its members to make reform of the economy and fighting corruption their priorities. The economic situation and improving living standards represent a priority for us," Assad told the gathering. "Corruption is a social and moral problem," he added. Speaking to some 1,150 delegates elected by the party's 2 million members, Assad said the Baath had to evaluate its performance during the past few years. The conference "should push the reform process forward to respond to the majority of people," Assad said.

The 10th Baath Party congress convened while Syria is under increasing international scrutiny. Syrian officials have denied they would be influenced by such pressure. Minister of Emigrants Affairs Buthaina Shaaban, who is also spokeswoman for the conference, said any new initiatives would stem from "our responsibility toward our country and people." The Syria Times said yesterday the conference had raised expectations of new initiatives to "address economic problems, to untangle the knot of bureaucratic regulations that effectively strangles business and to introduce far-reaching democratic and political reforms." "Recent events have showed how much it is pertinent and necessary to review old practices and to draw a vision for the future," the state-run paper said in an editorial. Last week Foreign Minister Farouk al-Sharaa forecast the congress would "give a new boost to the reform and modernization process."

The last congress of the Arab Socialist Baath Party, as it is officially known, was held in 2000 when it unanimously elected Assad as secretary-general following the death of his father, president Hafez Assad. The congress comes at a crucial time for Syria. The country, already under US sanctions for its alleged role in fueling the Iraqi insurgency next door, is still reeling from its April withdrawal from Lebanon, ending a 29-year-military presence in its tiny neighbor. Syria was forced to pull out its troops after the Feb. 14 assassination in Beirut of former prime minister Rafik Hariri, for which the Lebanese opposition blamed Damascus. Syria has denied the charge. The Syrian leadership faces a long list of demands from the international community as well at home, where pro-democracy activists have become increasingly vocal in their demands for more freedoms.

From Taipei Times, Taiwan - June 6, 2005

Accountability Real Factor for Reform and Combating Corruption

The 10th Regional Congress of al-Baath Arab Socialist Party on Tuesday evening continued deliberations on the level of committees. The political committee, chaired by Foreign Minister Farouk al-Shara, held discussions, on a number of regional and international issues, and the importance of strengthening the internal front to face the current threats and challenges. The Economic Committee, headed by Premier Naji Otari, concentrated on the significance of developing the human resources and tackling some problems of common constructional firms. Interpositions during the meetings of the Organizational Committee, chaired by Ghiyath Barakat called for the necessity of participation of all people in formulating the basis of the coming duration, and encouraging the constructive criticism.

Minister of Expatriates and the Congress Spokesperson Buthaina Shaaban said that the discussions and interpositions of the committees meetings concentrated on implementing the accountability principle which constitutes the real factor of reform and combating corruption. "Some interpositions called for finding oil revenue substitutes such as tourism, and dealing with expatriates as an economic and intellectual wealth," Shaaban told a press conference. She added that participants called for explaining the concept of the market economy to people and finding solutions to problems which encounter some firms and studying the factors which create a true investment atmosphere and decrease bureaucracy. Shaaban made clear that the political committee discussed the Syrian ties with the world countries, with keeping the Syrian interest and the pan-Arab stances, stressing that reform and development is a national need.

From Arabic News - June 8, 2005

A Strategy to Investigate Lebanese Corruption and Debt

Two-step approach would include technical and in-depth analysis of revenues and expenditures - Lebanon suffers from the status of being one of the most indebted countries in the world. With a Gross Domestic Product of $18 billion and a government debt of $35 billion, the debt-to-GDP ratio is already around 200 percent. However, when we consolidate the entire sovereign or national public debt (government debt plus other public sector debt), the staggering amount of debt reaches $46 billion. Two factors are responsible for the rise in Lebanon's debt: the corrupted methods of collecting revenues and incurring expenditures, and the allegedly collusive rise in interest rates on debt issued since the mid-1990s.

The Case of Ali Baba and the 40 Thieves - When President Amine Gemayel left office in 1988, government debt was less than $1 billion, and corruption was on a small scale (racket amounts ranging from $10,000 to $100,000). However, the debt quickly rose in the next 10 years to $16 billion in 1998, and more than doubled in less than seven years to $35 billion in 2005. At that rate, and with no solution to the budget deficit on the horizon, continued astronomical rise is certain. In unison, the corruption barometer in the 1990s and beyond was in amounts ranging from $500,000 to $50 million. Before we go any further in this analysis, the corruption barometer refers to the amounts paid as kickbacks, nepotism, patronage, services rendered, "percentages," etc., to politicians, individuals in public office, military and civilian authorities in Syria and Lebanon, and to political parties. This analysis is useful to understand why Lebanon is suffering today from over a $40 billion debt while government expenditure between 1992 and 1995 was $75 billion of which a trifling $6 billion went to reconstruction and development projects. In other words, the Lebanese people committed $75 billion and mortgaged the future of generations to receive $6 billion in authentic public investments (the superficial evidence of the postwar reconstruction being the few clean streets in Downtown and the Beirut airport).

The awkward fiscal situation in Lebanon has led to demands to investigate public finances and pin down those responsible for the growth of the debt and the corrupted ways that wasted public funds. Even in the mid-1990s, media reports and publications surfaced telling stories about the wheeling and dealing that accompanied the allocation of government expenditures and the rigged bidding process on projects. For an un-academic but factual treatment of the corruption and graft, one may read the book by former Beirut deputy Najah Wakim (Black Hands, "Al-Ayadi al-Soud" that went into 30 editions), or Aline Hallak's lengthy exposure of the mafia-style deals behind the mobile phone companies (Mobile: the Scandal of the Century, "Al-Khalawi: Ashhar Fadaih al-Assr"). And since 2000, more public figures have come out with shocking stories of a state of affairs resembling the cave of Ali Baba and the 40 thieves.

As for the growth in Lebanon's public debt, the answer is pretty simple: if Lebanon were a transparent state with a government of law and order, an investigative technical study would suffice to explain the structure and building blocks of the debt. Over the past 13 years, the Finance Ministry submitted a budget plan every year to Parliament, which included estimates of revenues and expenditures. The plan showed chronic deficits as expenditures always came out higher than revenues, sometimes by as much as $3 billion every year. A justification of this bulky deficit in Lebanese standards (20 percent to 25 percent of the GDP), was the urgent need for massive funds for reconstruction and development to allow the economy to grow. However, the Arab countries who made written commitments to provide $4 billion, and the United States which sponsored the Lebanese peace pact in 1989 with verbal commitments to provide a Marshall Plan for Lebanon, shirked on payment and left the little country to its destiny.

As meaningful foreign aid failed to materialize, Parliament approved the historically giant deficits as proposed by the government, and the Central Bank, serving as the fiscal agent of the Finance Ministry, issued treasury bills and bonds to the financial markets at hefty interest rates. The initial debt issue matured in the following years and needed to be refinanced with additional debt issue at higher interest rates. Therefore, the debt was feeding on itself like cancer as interest payments became a ghoul, a vampire that eventually made the country as one of the most indebted in the world.

More than a technical investigation - The blueprint to investigate the public debt should be a two-step approach. It includes (1) a technical report on the structure and the building blocks of the debt and (2) an investigation of the deficit through an in-depth analysis of revenues and expenditures. An investigation with the involvement of an independent international company such as Standard & Poors or PriceWaterhouseCooper could complete the detailed technical report along the following lines: - The types of bills and bonds issued, amounts, maturities, average terms, and interest paid between 1992 and 2005. - An analysis of debt services in the budget against government investments on public works, health and education, and the salary component. - An accounting analysis of sources of funds, such as income tax, VAT, customs revenues, etc. - An economic analysis of various ratios, linking economic growth, growth in the public debt, level of revenues against economic growth, debt/GDP ratio, etc. This and similar analyses will clarify the debt dynamics. - The incidence of the debt on the Lebanese economy and the industrial sectors (regression analysis models), and the yield curve, and the role of the banking sector and whether crowding out in capital markets occurred.

This study will help explain the structure and accumulation of the debt and its impact on the economy and public finances. It will put an end to the myth that "debt does not matter as long as the state is able to pay maturities plus interest."

The Devilish Equation - The technical study should be accompanied by the more important investigation of the deficit (expenditures minus revenues). For example, anecdotal but substantiated evidence has shown that graft and corruption in Lebanese finances start at the source, i.e., either garnishing revenues to private pockets before they reach the Treasury or swallowing a portion of any government project or commitment by exaggerating the amounts going out to private firms. And this is the reason why no public books will show such behavior. Such an investigation could be conducted by a commission with the involvement of an international firm, such as Deloitte and Touche, that has the necessary expertise. Some of the elements of such investigation could include:

Debt Services: Servicing the debt and interest payments are the largest government expenditure item, and were voted upon by the Parliamentary Finance Committee without questioning the details. It is public knowledge that interest rates charged by primary holders of the debt issue (i.e., Lebanese banks) were unconvincingly and extremely high in the mid-1990s, reaching 35 percent. Such rates are behind the cancerous growth of the debt as the government was unable to meet maturities and interest payments without more debt issues. These rates are at the root of the reason why the Lebanese banking system has attracted $60 billion in deposits, equivalent to over 300 percent of Lebanon's tiny GDP.

Almost every Lebanese economist we have met on frequent visits to Beirut has confirmed that amounts ranging from $17 billion to $26 billion of the government debt are due to artificially increased interest rates. And when asked whether these rates were the outcome of pure market forces or of collusion among members of the bankers association and the Central Bank, the answer leaned toward the latter. Even more, our economist colleagues suggested that an investigation of the secondary market is equally important as it would reveal who bought government securities from the primary purchasers and which banks were prevented from bidding. While we do not fully subscribe yet to these allegations, although coming from credible sources (in the absence of solid proof and evidence of such collusion), we expect that the banks would cooperate with an investigation into the growth in the debt services similar to their current positive cooperation with the international organization Financial Action Task Force on Money Laundering.

Public investments: Over the past 15 years, the Lebanese public purse suffered from exaggerated over-billing and inflated costs of government purchases and public works (fuel, seaports, airport, highways, etc.). A flood of stories surfaced recently about a Lebanese-Syrian financial mafia that penetrated the government apparatus and parasite-like sucked revenues at source and expenditures at recipient's end. It worked like this: the mafia exercised its tentacles through influencing to its favor the financial commitments made to fund public projects, and the various special funds created outside the accountability framework (the Displaced Migrants Fund, the Council for Reconstruction and Development - $1.5 billion of the council's $7 billion projects are said to have gone to the mafia - and the Council for South Lebanon). An obvious example was the cost of surfacing and developing a kilometer of highway, which was shown to be several times higher than a similar engagement by the State of California; or the comic story of the theft of cows at the Agriculture Ministry, originally intended to improve dairy farming in the Bekaa Valley.

Public Revenues: Stories of embezzlement of public revenues are plenty, starting with a 16-page list published in April 2005 by the Lebanese business magazine "Le Commerce du Levant," under the title "The Shadow Economy," the publication described how the mafia physically emptied gambling machines every night at Casino du Liban, an entertainment and gambling establishment north of Beirut; and how 5,000 Syrians plus an equivalent number of Lebanese counterparts operated at every government department and public institution and in large private enterprises. In most locations, the mafia would request payments in-your-face, as they proved they and their protectors were above the law. As for major projects, payments were required as percentages of invested amounts and of future revenue streams. Porous borders also allowed for unchecked flows of people, goods and services to the detriment of the Lebanese Treasury, as such activities deprived Lebanon of important customs revenues, Value Added Tax, and licensing and labor fees.

Other files, include: (1) the theft and waste at the power utility, Electricite du Liban, which was calculated at hundreds of millions of dollars annually, and at 40 percent of the utility's capacity; (2) the theft and waste in the telecommunications industry, especially at the mobile companies and in the telephone system, and (3) the embezzlement, graft, racketeering and theft in various industrial sectors, health care, labor market, justice, the racetrack, etc. If implemented, this modest road map will uncover the fact that a good portion of the public debt was due to corruption and theft and the artificially inflated interest rates, and that a carefully conducted investigation could pinpoint the perpetrators. However, the international community has a responsibility in the current state of affairs in Lebanon. It was a United States decision that ended civil strife in Lebanon and placed Syria as caretaker, and it was largely another U.S. decision that ended Syria's hegemony over Lebanon. The lack of an American Marshall Plan for Lebanon is one of the factors contributing to the financial mess in the country. While it was a miracle that Lebanon was still able to make it since 1990, genuine American and Arab support to a new government to modernize the country is a good start in 2005 and beyond.

From Daily Star - Lebanon, Lebanon, by Kamal Dib - June 14, 2005

Brazil Stocks, Bonds, Currency Decline on Corruption Probe

Brazil's stocks, bonds and currency sank on concern a congressional probe of corruption within the government will prompt President Luiz Inacio Lula da Silva to boost spending in an effort to win backing from legislators. Brazil's benchmark Bovespa index tumbled 3.1 percent, the biggest decline since April 28, and the currency lost 1 percent. The government's benchmark bond due in 2040 fell 0.80 cent on the dollar. Lower house deputy Roberto Jefferson said he told Lula his Workers' Party paid lawmakers in exchange for support for government-backed legislation, Folha de S. Paulo reported today. Jefferson, leader of the Labor Party and the subject of a corruption investigation, said he met with Lula twice in January to tell him Workers' Party Treasurer Delubio Soares was offering 30,000 reais ($12,400) to lawmakers for support, Folha said.

"The market has been strongly affected by the deterioration in the political scenario," said Rodrigo Boulos, senior trader on the treasury desk at Banco Standard do Brasil in Sao Paulo. "Every time there is a deterioration of the political scenario, there is a concern the government may implement populist measures." Opposition lawmakers gathered last month a majority of signatures in congress to start an inquiry into allegations that Jefferson helped suppliers win business from the state-owned mail company through bribery. Jefferson has denied any wrongdoing.

'Dominate' - Finance Minister Antonio Palocci may speed up disbursement of budgeted funds for projects sponsored by lower house deputies, seeking to quell dissatisfaction with the government, O Estado de S. Paulo said last week, citing lawmakers within Lula's coalition. Lula has helped spark a rally in Brazilian markets since taking office in 2003 by reining in the budget deficit, which has bolstered investor confidence in the South American country. Lula trimmed the government's deficit to 2.5 percent of gross domestic product in the 12 months through April from 5 percent in January 2003, the month he took office.

"The political fight will dominate the picture in the short- term," said Regis Abreu, who manages 1.3 billion reais of bonds and stocks for Mercatto Gestao de Recursos in Rio de Janeiro in a phone interview. "The market will be pressured until there's a clearer idea on what can happen in terms of changes in ministries, state-controlled companies." The real fell for the fourth day in five, dropping to 2.4505 to the dollar from 2.4255 at the end of last week. The losses pare the real's gains this year to 8.5 percent, which is still the best performance of the 16 major currencies.

'Early Rounds' - Brazil's benchmark bond maturing in 2040 fell 0.80 cents on the dollar to 118.10, boosting its yield to 9.25 percent, according to JPMorgan Chase & Co. The bond has fallen the past two days after reaching a record high of 119.9 on June 2. Dario Pedrajo, who manages about $400 million of emerging- market securities, including Brazilian bonds, at Biscayne Americas Advisors in Miami, said the allegations may be a sign the opposition has started to try to weaken Lula before next year's elections. Lula stands to run for re-election. "It's the early rounds of the political process - the dissention process - and there's going to be people throwing a little mud around," Pedrajo said in a telephone interview. "At least from what I read, there doesn't seem to be a lot of meat behind the allegations."

From Bloomberg - June 6, 2005

Ministries to Appoint Ethics Officers from Within Ranks

Government ministries, in another two weeks, will begin policing themselves under a Jamaica House initiative to sanitise state procurement procedures and cauterise loopholes that can be corruptly exploited. Permanent secretaries, who are the chief executives of their ministries, have until June 30 to appoint ethics officers, said a release Tuesday from the Office of the Prime Minister. The appointments are to be done from within existing staff. The ethics officers will have the job of "overseeing the ethical conduct of the staff in respective ministries and their agencies," said Jamaica House.

Permanent secretaries have already held "sensitisation sessions" with staff on government procurement policy, the release proclaimed, and redistributed the guidelines, with the exception of the ministries of Justice and Commerce, Science and Technology, which should wrap up their sessions by the end of June. Prime Minister P J Patterson had given the directives for the sessions at a anti-corruption meeting in May. "Amendments to the Evidence Act and the Public Bodies (Management and Accountability) Act and a review of the powers of commissions will also be undertaken as government moves to step up its fight against corruption and to improve governance," Jamaica House said.

From Jamaica Observer, Jamaica - June 14, 2005

Bolivia on The Boil

The current political turmoil in Bolivia is part of a wider movement in Latin America, of people rejecting not only corrupt politicians, but also - and more importantly – the neoliberal economic policy paradigm that enriched a few at the expense of the vast majority.

A RICH COUNTRY INHABITED BY THE POOR - Bolivia is the poorest country in Latin America, with more than 70 per cent of its population estimated to be living below the official poverty line. In rural Bolivia the incidence of poverty is reckoned to be as much as 90 per cent of the population, and there is almost no access to basic amenities such as electricity and sanitation. For most farmers in the country, until recently, the only thing that stood between them and starvation was cocaine cultivation, which was banned under pressure from the United States. Urban areas have been impoverished by massive job cuts because of privatisation and more mechanisation in the mining industries. Paradoxically, Bolivia is also one of the richest countries in Latin America, in terms of its natural resources. The huge natural gas reserves are second only to those of Venezuela in the region, and the country also has large deposits of tin, silver and gold. The story in Bolivia, as in many other countries similarly rich in natural resources, is of decades of plunder by a small elite, ably assisted by multinational mining corporations and watched over by US imperialism.

Again like much of Latin America, the economic reality has its counterparts in social, political and even racial divisions. The ruling elite is inevitably white, belligerently right-wing and closely intertwined with imperialism, as well as openly contemptuous of democracy when it does not serve its own interests. More than 60 per cent of the population is of "indigenous" origin. Some others can be described as of "mixed race". These groups constitute the political base of the increasingly more radicalised left, which is currently making demands for public ownership of natural resources and public responsibility for basic services that strike at the very heart of the imperialist neo-liberal model.

BACKGROUND OF THE CURRENT CRISIS - To understand the current crisis, a little background is necessary. Two crucial issues have dominated the contested terrain in Bolivia, as indeed they are likely to do in the world as a whole in the years to come: energy and water. The neo-liberal model was imposed in a drastic form in Bolivia from around the mid-1980s under the close supervision of the IMF and World Bank. This involved not only the usual elements of fiscal contraction and high interest rates, but also privatisation of energy extraction and distribution but also of water and other utilities, resulting in huge increases in prices and disconnecting supplies to poor people who could not pay.

However, around five years ago, social movements and protestors, led among others by the indigenous peoples' leader Evo Morales, began to reassert their position. The Cochabamba Water War of 2000 became internationally famous when several weeks of violent conflicts between protestors and the military led to the expulsion of a consortium controlled by the American transnational corporation, Bechtel. The government of Bolivia has been forced to pay heavy compensation to Bechtel. Now there is another such war under way, in the shantytown of El Alto close to the capital La Paz. From late last year, similar protests against the privatisation of the public water and sewerage system paralysed the city and led to the termination of the contract held by the private consortium Aguas del Illimani on January 13, 2005. This was a particular blow to international donors, who had actively pushed this contract as being "pro-poor". However, the issues is still not finally resolved and the conflict has even intensified.

This is because there is still tremendous pressure upon the Bolivian government from the World Bank, which became an associate of Aguas del Illimani through its private sector lending arm, the International Finance Corporation, which owns 8 per cent of shares. If the contract is cancelled, the Bolivian government will have to pay a large compensation, and now the World Bank has direct interest in guaranteeing the investment and will be the judge of the likely forthcoming lawsuit through its agency the International Centre for the Settlement of Investment Disputes.

THE CURRENT STRUGGLE - One of the major demands of the current struggle is nationalisation of the oil and gas extraction industry, since the practice of the past and currently is to export the country's gas to the benefit of a small local elite and the large MNCs. This was a promise made in the "October Agenda" of former president Carlos Mesa, who took power in 2003 after the hated and murderous regime of Gonzalo Sanchez de Lozada was displaced by public uprising. That Agenda also promised a new Constituent Assembly providing for more regional autonomy and representation to indigenous peoples. This immediately came up against a strong rightwing reaction, especially from the region of Santa Cruz which enjoys a massive concentration of land and valuable natural resources in the hands of a few. Now Mesa has himself been evicted by mass protests, because of failure to keep to these promises. The new acting president Enrico Rodriguez is the former head of the Supreme Court, who has so far been unable to stop the chaos. He has promised fresh elections within six months, and these are definitely likely to provide more power to the Left, which now has several leaders of rapidly growing public stature.

President Hugo Chavez of Venezuela has described the current crisis in Bolivia as one more sign that the "poisoned medicine" of free-market democracy imposed by the US is being rejected by Latin America. But of course US imperialism, however, distracted it may be by its travails in Iraq and Afghanistan, is unlikely to let so much popular upsurge in its backyard go completely unchallenged. What happens next in that region is of great concern to everyone in the developing world, not only for the ability to confront imperialism, but also in terms of building feasible social and economic alternatives.

From People's Democracy by Jayati Ghosh - June 19, 2005

The Global Center for Leadership & Business Ethics Presents Laureate Awards to Whitehead, Cadbury And Robert

New York - Two business executives and a scientist are being honored tonight by The Global Center for Leadership & Business Ethics at a gala event at the United Nations for their exemplary achievements in leadership, corporate governance and social responsibility. As the 2005 inaugural winners of The Global Center's Laureate Award & Medal Series, John C. Whitehead (United States), Adrian Cadbury (United Kingdom), and Dr. Karl-Henrik Robert (Sweden) are being recognized as "beacons of responsible business practices and ethics," said William W. George, chairman of The Global Center. "We are pleased to recognize these esteemed individuals for their contributions to the advancement of leadership and ethics in business." Whitehead will receive The Laureate Award, while Cadbury and Robert will receive the Laureate Medals for Corporate Governance and Social Responsibility, respectively.

Awards at tonight's event will be presented by several board members of The Global Center. The winners will receive a solid gold medal, provided in a monogrammed blue leather box, and a reproduction of an original piece of art, inspired by the awards given to Nobel Peace Prize Laureates. The Global Center board members include George, Dr. Reatha Clark King, Arthur Levitt, Jr., Lord David Simon and Dr. Helmut Sohmen.

The Laureate Award: John C. Whitehead - John C. Whitehead, 83, is chairman of the Goldman Sachs Foundation and former chairman of Goldman, Sachs & Co. He has chaired the prestigious Lower Manhattan Development Corporation since 2001. "I've received many honors in my lifetime, but nothing has been more important than the honor I'm receiving tonight," said Whitehead, who has enjoyed an illustrious career in both public service and private industry, and is widely recognized as a pioneer in the advancement of corporate social responsibility issues. "There are many in business today who are more deserving than I am, but I'm glad to represent all of us in business who are active in leading responsibly."

The Corporate Governance Laureate Medal: Adrian Cadbury - Adrian Cadbury, 76, served as chairman of Cadbury Ltd. from 1969 and Cadbury Schweppes from 1975-1989. He also chaired the U.K. Committee on the Financial Aspects of Corporate Governance, which published its seminal "Report and Code of Best Practice" in 1992. "I've always been interested in chairmanships and boards of directors - how they work and how they could work better," said Cadbury, who has been at the forefront of corporate governance for a quarter-century. "Now there is far more information available and people can ask questions about how businesses are governed and how they are run. We've come such a long way."

The Social Responsibility Laureate Medal: Dr. Karl-Henrik Robert - Dr. Karl-Henrik Robert, M.D., Ph.D., 57, is being honored for his work on sustainability, which encourages an understanding of the relation between ecology, economy and technology. "Rather than having a company ask itself, 'Do we contribute to this or that environmental impact?' a company should ask, 'What would our organization look like if it were sustainable at all levels down to its most basic operations?'" said Dr. Robert, one of Sweden's foremost cancer scientists and founder of The Natural Step, a Swedish-based environmental organization. "This paradigm shift allows much more creativity and innovation, much smarter approaches. And these approaches comply with the full scope of sustainability and not solving one problem by creating another."

The Global Center for Leadership & Business Ethics - Inspired by the principles and guidelines of the Norwegian Nobel Committee and the Nobel Prizes, KPMG International created The Global Center for Leadership & Business Ethics in 2004 as an independent entity to recognize individuals who exhibit extraordinary business ethics and leadership qualities. The Global Center manages and administers the nomination process for The Laureate Award & Medal Series. Its policies and processes are modeled on those of Nobel.

"The Global Center was established to honor outstanding personal behavior and responsible business leadership, values that are ingrained in our own culture," said Mike Rake, chairman of KPMG International. "By recognizing leaders who reflect the very best attributes of accomplishment and innovation, we hope to continue to raise awareness of the importance of the principles of leadership, integrity, and ethics in business." Subsequent to a call for nominations, The Global Center concluded the selection process for The Laureate Award and Medal Series in January 2005. As part of the call, 9,000 nominations for The Laureate Medal & Award Series were issued globally, and responses were received from more than 15 countries.

"The Global Center was founded on the conviction that leaders are defined by their actions and that those individuals who exhibit exemplary business ethics should be recognized and honored," said Gene O'Kelly, chairman of KPMG LLP, the U.S. firm. "It can be an invaluable resource in providing leading examples of best practices, providing young professionals and students with insights and information on leadership and ethics." The call for nominations for the 2006 Laureate Award & Medal Series will be issued by The Global Center for Leadership & Business Ethics in July 2005 to senior corporate executives and audit committee chairs, business school deans and academic leaders, professional associations, legislators, regulatory agencies, and economists.

Nobel Peace Center - KPMG International is also The Global Founding Partner and a corporate member on the board of the Nobel Peace Center in Oslo, which is scheduled to open on June 11, 2005. The Nobel Peace Center is a worldwide resource for public information and discussion about the topics of war and peace and conflict resolution, as well as a global forum in which to present the work of Alfred Nobel and the Nobel system, the Peace Prize Laureates, and the Nobel Committee. There are plans for a Nobel-KPMG symposium on Leadership and Business Ethics during Nobel Week in Oslo, Norway, in December 2005. "KPMG's participation as The Nobel Peace Center's Global Founding Partner underscores our belief that all individuals and businesses must strive to contribute to the well-being of their communities," said Rake.

About The Global Center for Leadership & Business Ethics - Headquartered in New York, The Global Center for Leadership and Business Ethics was established by KPMG International, the global network of professional services firms, in 2004. An independent body established to recognize those individuals and organizations that exhibit extraordinary business ethics and leadership qualities, The Global Center manages and administers the nomination process for The Laureate Award & Medal Series. Its policies and processes are modeled on those of Nobel.

About KPMG International - KPMG International is the coordinating entity for a global network of professional services firms, providing audit, tax, and advisory services, with an industry focus. The aim of KPMG International member firms, including sublicensees and subsidiaries, is to turn knowledge into value for the benefit of their clients, people, and the capital markets. With nearly 94,000 people worldwide, member firms provide audit, tax, and advisory services from 717 cities in 148 countries.

From Yahoo News (press release) - June 1, 2005

Corruption Is A $1 Trillion Business

Brasilia - Around one trillion dollars changes hand through corruption related transactions, a World Bank official has said. "Corruption moves one trillion dollars a year throughout the world," Daniel Kaufmann, leader of a World Bank delegation to 4th World Forum of Struggle Against Corruption, said here. He said combating corruption in the world fell over the last eight years and added this is "as important for social development as economic investments". The forum held for the first time in Latin America, was inaugurated last night by Brazil President Luis Inacio Lula da Silva, saying "corruption always affects the poor than the rich."

From Financial Express, India - June 9, 2005

U.S. Says Civil Society Indispensable In Anti-corruption Fight

Governments must recognize it as ally, partner, USAID's Franco says - Governments cannot succeed in addressing corruption without the participation of civil society, according to a senior U.S. Agency for International Development (USAID) official. "Civil society participation increases the effectiveness and efficiency of policy implementation and makes democracies more pluralistic, representative and responsive," Assistant Administrator Adolfo Franco said. Franco addressed a June 8 workshop on civil society that he chaired at the Fourth Global Forum on Fighting Corruption, which opened June 7 in Brasilia, Brazil. He said that expansion of international anti-corruption organizations and a growing number of similar national and local organizations indicate the great potential of civil society to lead the fight against corruption.

The challenge for governments, Franco said, is to recognize that civil society can be their ally and partner. It can mobilize people in ways that governments cannot, raise public awareness and ensure support of groups representing diverse interests, Franco said. Governments should set a framework designed to facilitate engagement of civil society in the fight against corruption, including legal and regulatory measures and financial incentives, Franco said. He said political will to deal with corruption issues is on the rise throughout the world. And governments are increasingly promoting initiatives to step up transparency, initiatives such as freedom-of-information legislation and ombudsman offices that monitor corruption allegations, he added.

Following is the text of Franco's remarks as prepared for delivery: Mr. Adolfo A. Franco, Assistant Administrator, Bureau for Latin America and the Caribbean, U.S. Agency for International Development [SAID]. Role: Chairperson, Civil Society Session 1: Improving Mechanisms of Control, Global Forum IV, Brasilia, Brazil, June 8, 2005.

Welcome to the session on civil society's role in controlling corruption in the public arena. The existence of this session is evidence of progress in and of itself. As all of you in this room know, fifteen years ago the word "corruption" was unmentionable in the hallways of government across the world. Today, political will to address these vital, but sensitive, subjects is on the rise. Corruption has become central in political party platforms across the region, and governments are increasingly promoting initiatives to increase transparency. These initiatives range from freedom of information legislation to anti-corruption commissions to ombudsman offices that monitor corruption allegations.

Governments in every region have demonstrated that, where there is a will to combat corruption, there is a way. For example, last year in Nigeria, the Minister for Public Reform - in an interesting twist - abolished his own department when he discovered that 5,000 of the 25,000 workers of his payroll were "ghost workers." That is, 5,000 workers were being paid a regular salary even though they never came a single day to work. In Azerbaijan, to address rampant corruption in the higher education admissions system, the government took away control over admissions from the universities and created the State Students Admissions Committee to oversee the admissions process. This reform is created with a significant reduction of corruption levels in the admissions process.

In Indonesia, the involvement of local parent associations in determining how community-generated funds will be used is minimizing corruption in the local school system. At the beginning of every school year, school officials meet with representatives of the parent association to together plan how community funds will be used. Access to school expenditure reports allows the parent associations to continue to monitor spending throughout the year.

In Uganda, the government commissioned an audit of the education system that revealed expenditure leakages of over eighty percent of the national budget for textbooks and supplies. Only thirteen percent of these funds were actually getting to the schools that desperately needed them. To address this, the government began to require that all fund transfers to district education offices be broadcasted on the radio and published in local newspapers, and that schools post public notices of all the funds they received. The results were remarkable. Within three years, ninety percent of these funds were reaching schools.

What these examples demonstrate is that governments cannot, and have not, succeeded in addressing corruption on their own. Civil society, in all of its manifestations - nongovernmental organizations, citizen groups, labor unions, business associations, media, faith-based groups, and academia - has proven indispensable in the fight against corruption. The rise of international organizations such as Transparency International - one of the co-sponsors of this conference with its 100-plus national chapters; national organizations like the Institute for Democracy for South Africa and Indonesia Corruption Watch; and local organizations such as parent associations and neighborhood committee are all clear examples of the enormous potential of civil society to lead the fight against corruption by raising public awareness, representing and mobilizing citizens, pressuring governments to reform, and implementing activities on the ground to mitigate corruption.

The role of civil society in a democracy cannot be overemphasized. Civil society is the lifeblood of a nation. Civil society participation increases the effectiveness and efficiency of policy implementation and makes democracies more pluralistic, representative, and responsive. Civil society has played a critical role in democracies across the world before, during, an after the transition to democratic rule. In the region that I am most familiar with - Latin America and the Caribbean - hundreds of thousands of citizens gave their lives in the struggle to leave a more democratic world behind. They succeeded, largely due to the persistent efforts of various civil society elements, such as the church, in mobilizing citizens and the world to take on the brutal dictatorships. In the former Soviet republics, civil society - especially the media - continues to lead the battle against corruption by surfacing stories of corruption, fraud, and other official wrongdoing and, in many cases, rising their lives in the process. In the older democracies across the world, sophisticated civil societies continue to scrutinize the conduct and decisions of government officials to hail them accountable for their actions.

Civil society serves many influential roles vis-a-vis government - observer, challenger analyst, community liaison, overseer, critic, and ally. The challenge for governments is to void immediately casting civil society aside as the opposition, and instead recognize that a sophisticated civil society can be an ally and partner of government. Civil society can mobilize society in ways that governments cannot, raise public awareness about corruption and government efforts to address it, and ensure the representation and buy-in of diverse interests in society. Civil society, as the voice of the people, is in the best position to identify and communicate the needs and preferences of citizens to government.

In Bangalore, India, the Public Affairs Center, a not-for-profit organization committed to improving the quality of governance in India, has pioneered the development of a "citizen report card" model, in which the public assigns grades to local public services. As a result, statistics reveal that corruption levels in routine transactions have gone down and public satisfaction with service delivery has increased. The Bangalore experience has shown us that the process of engaging citizens in the governance process is as important as the results achieved by this collaboration. All of the service delivery improvements in Bangalore have corresponded with increased satisfaction with the behavior of local service providers.

Civil society's monitoring and oversight functions are fundamental to guaranteeing that government is serving the interests of its citizens and to ensuring that they have access to information that will help them understand and evaluate government decisions. For example, in Colombia, USAID has supported veedurias, or citizen oversight committees, which equip and empower citizens to monitor government processes and service delivery.These citizen oversight groups are making government at all levels more open, lawful at accountable, and responsive. Although tension often exists between governments and civil society, governments do have an important role in empowering civil society. The legitimacy of governments is derived from the governed. Only if governments are accountable to democratic oversight and respectful of the rule of law can governments claim to act on behalf of the people. It is this legitimacy which gives governments the authority and the capacity to implement successful anti-corruption reforms and that generates support from society for these reforms.

Governments offer, above all, political leadership. Governments should be proactive in setting the agenda and framework through which to engage civil society in the battle against corruption. This includes creating the enabling legal and regulatory environments in which civil society can function, and providing appropriate financial incentives, such as tax breaks and tax exemptions for donations, to help civil society organizations mobilize funding. Similarly, it is incumbent upon governments to transcend the historical mutual distrust between government and civil society and set a collaborative and productive tone for the dialogue with civil society. In the Philippines, Procurement Watch - a not-for-profit organization - has partnered with the government to advance much needed procurement reforms to improve accountability, efficiency, and equal opportunity in the public procurement system.

Procurement Watch worked with other civil society elements to develop a reform strategy to present to the Government, which was welcomed by the Government. A Procurement Watch representative recognized the importance of collaboration between civil society and the government when she remarked, "Procurement reform requires technical competence found in a combination of people in and out of government. It is vital that they can complement each other's unique contributions. People in government should know when the expertise required is beyond them. People out of government should appreciate the fact that there are many well-meaning people in government. A network of like-minded individuals is priceless. While technical expertise is certainly needed, understanding the cultural context and the society process of change may be just as decisive and will require a different type of expertise." The truth is that I don't need to explain the importance of civil society's role in addressing corruption to all of you here today. You are all here because you understand this already - you are the champions against corruption in your countries, as are our three panelists.

From All American Patriots (press release), Sweden - June 8, 2005

Fourth Global Forum on Fighting Corruption winds up in Brasilia

Tehran – The Fourth Global Forum on Fighting Corruption held in Brasilia, Brazil, came to a close on Friday. An Iranian delegation headed by the Economy Minister Safdar Hosseini, who had left Tehran on last Tuesday, attended the conference. The conference was attended by a number of the Brazilian cabinet ministers and members of parliament, representatives of governments, of the civil society, international organizations, non-governmental organizations, experts, and scholars from 100 countries. They discussed subjects, such as the Brazilian experience on combating corruption, political financing, and government bids.

In the opening speech, Brazilian President Luiz Inacio Lula da Silva referred to the recently established Ministry of the State Inspectorate in his country, indicative of Brazil's determination in its serious fight against corruption. The Iranian minister for his part elaborated on his country's viewpoints on different subjects, particularly, on money laundering and fighting corruption. During his stay in Brazil and on the sideline of the forum, he also met with officials from other countries and discussed issues such as economic and bilateral cooperation among the countries.

The war on corruption and money laundering along with the advantages of such international agreements for legal cooperation in these areas, were cited as the main themes of the 4th Global Forum on Fighting Corruption. The conference was held in Brasilia from June 7-10. Previous forum's editions took place in the United States (Washington), in 1999; Holland (The Hague), in 2001; and in South Korea (Seoul), in 2003.

From Tehran Times Economic Desk, Iran, June 11, 2005

World Corruption Moves One Trillion Dollars a Year

Brasilia - Corruption moves one trillion dollars a year throughout the world, revealed a high official of the World Bank before the 4th World Forum of struggle against that scourge, being held in Brasilia. Daniel Kaufmann, head of the Bank's delegation to the venue gathering delegates from a hundred countries, said the combat on corruption in the world fell over the last eight years and added this is "as important for social development as economic investments".

The forum held for the first time in Latin America, was inaugurated last night by president Luis Inacio Lula da Silva, who alerted that phenomenon always affects more the poor, both among countries and between citizens. Lula highlighted actions of his government in this field, among them, 46 operations by the Federal Police which led to accuse 819 persons, including politicians, judges, businessmen and public officials, most of them committed in old cases that had not been pursued. He also referred to the strengthening of the Ministry of Justice and the Federal Police, the concession of instruments and the rank of Comptroller's Office of the Union, and the creation of the Council for Public Transparency and Fight on Corruption, for the increase of a control scheme to fight money laundering.

Gilson Dipp, of the Superior Court of Justice of Brazil, affirmed that in the country corruption launders more money to reintegrate it to normal circulation than does the drug or arms traffic and pointed that although they're on the right track to fight against it, the great problem is impunity. One of the workshops in session at the Forum, with delegates from civil society organizations, it was said that transparency in financing political parties is essential to face the harmful scourge. The South African experience in this aspect was defined as an example to follow by other countries and a call was made to introduce more effective mechanisms that allow to control financing of those groupings by donations from the private sector.

The importante of civil society with the purpose of organizing to stimulate and control government actions was also debated at length, and Ana Luiz Fleco, from the organization Transdparencia Brasil, posed the example of how health, education, social assistance councils and others work. Another workshop debate don the Peruvian experience in recovering the resources diverted by ex president Alberto Fujimori and his advisor Vladimiro Montesinos. Jose Ugaz Sanchez of the World Bank indicated the crimes committed by the former president and his collaborators were possible because they kidnapped the State and exerted great control on public powers, the media and financial companies. It was informed that although Fujimori was protected by the asylum extended him by Japan, in Peru about 1,492 persons were processed, of which over 40 are in jail, including Montesinos, ministers, parliament members, judges and military chiefs.

Prensa Latina, Cuba - June 8, 2005

Global Anti-corruption Forum Considers Concrete Measures

Brasilia, Brazil - A global forum has moved the international community toward more robust implementation of the U.N. Convention Against Corruption and other anti-corruption and good governance measures, a senior U.S. official says. "By picking up 'from words to deeds' as the theme of the just-concluded Fourth Global Forum on Fighting Corruption (GF IV), Brazil has helped the international community shift to practical aspects of the fight against corruption and recognize that this fight is not a rhetorical exercise," said Daniel Fisk, deputy assistant secretary of state for Western Hemisphere affairs, in a June 10 Washington File interview. Fisk, who participated in the forum, said that the gathering in the Brazilian capital was more about lessons learned than new ideas. "My sense was that people were asking practical questions; this kind of questions that need to be asked to implement anti-corruption measures," he said. Fisk said he believes discussions on international conventions, the role of civil society, electronic government (e-government) and law enforcement have contributed most to relevant areas of international cooperation.

Ideas explored by delegates included mutual legal assistance as a way to overcome jurisdictional obstacles in pursuit of cross-border cases, integrity assessments of countries as an alternative to measuring corruption and the creation of national databases to improve transparency in management of seized assets. U.S. officials said that the United States' participation in the Global Forum process reflects the continued commitment by President Bush to work with dedicated partners to implement international transparency and anti-corruption measures such as denying safe haven to corrupt officials, those who corrupt them, and their assets; the Millennium Challenge Account; and the Group of Eight nations' anti-corruption and transparency initiative.

Another U.S. official Adolfo Franco, who headed the U.S. delegation to the forum, said that its theme was "extremely" timely because governments are now at a crossroads for turning international commitments into effective anti-corruption actions. "As raised by many delegates during the forum, strengthening the collective political will to fight corruption and improve governance was a main objective," said Franco at a June 9 press briefing in Brasilia. In this respect, the gathering was a success, he said. Franco, an assistant administrator in the U.S. Agency for International Development, urged countries to ratify the U.N. Convention Against Corruption (UNCAC) so that it comes into force by the end of 2005. UNCAC is an "enshrinement" of the new global attitude toward corruption, according to U.S. officials. It addresses issues of prevention, criminalization, international cooperation, asset recovery and implementation mechanisms.

The convention has been signed by 123 countries and ratified by 25 since the U.N. signing ceremony in Merida, Mexico, in 2003, according to U.N. sources. Ratification by at least 30 countries is required for the convention to enter into force. President Bush has asked the Senate to ratify UNCAC. Another U.S. official in Brasilia said that the convention will have entered into force by the next Global Forum in 2007. But "the hardest work is still before us: to take actions necessary to implement international commitments, facilitate international cooperation and showcase these actions to the world," said the official, who asked not to be identified, in a June 10 interview. The official said that moving forward, as reflected in the GF IV final declaration, "we must deliver on our commitments and take actions that will achieve demonstrable results."

An international anti-corruption drive, which has intensified in recent years, has already produced concrete results as attested by many delegates. For example, Kimberly Post from the U.N. Office on Drugs and Crime said that an increasing number of tax havens under growing international pressure have started demonstrating willingness to cooperate with international investigators. And Brazilian President Luiz Inacio Lula da Silva told GF IV that his government, starting in July, will make electronic bidding an obligatory form of public procurement building on the experience of leading countries in e-government such as South Korea and Mexico. GF IV played out against a background of several developing corruption scandals in Brazil. One involves officials at the postal service who allegedly took kickbacks to rig contracts. In a speech at the GF IV June 7 opening ceremony, da Silva said that his government will not hesitate to continue investigation in this and a related scandal to the "bitter end," according to official translation of his remarks.

From American Embassy, by Andrzej Zwaniecki - June 13, 2005

Services Paralysed as Civil Servants Strike

A strike called by the Kenya Union of Civil Servants today paralysed services in government institutions across the country. The striking civil servants are demanding a 600 percent pay rise and have vowed not to relent even in the face of threats of sacking by the government. In Bomet, officials of Kenya Civil Servants Union said the more than 1,000 members in the region were on a go slow. Branch chairman Jonathan Kirui and treasurer Wilfred Koech said the civil servants were joining their colleagues across the country in the strike to press for better pay packages. In Bondo District, all activities in the government offices were paralysed as civil servants downed their tools in solidarity.

A survey conducted in government offices and health institutions in the district by The Standard revealed that there was no sign of activities being undertaken. The worst hit was the Bondo district hospital where both out and in patients waited in vain to receive medical attention by the personnel. And in Gucha district, government offices remained closed. At the district hospital, striking nurses turned away a pregnant woman who was in labour pains. The relatives had to take her to Getembe Maternity and Nursing Home - some two kilometres away. A second victim Zipporrah Nyambeki was taken to Tabaka Mission Hospital - some 5km away after the medical personnel declined to attend to her. Area DC Samuel Kilele, who convened a meeting with heads of departments in his office, noted that the strike had affected service delivery to the general public and called for a lasting solution to end it. In Kilifi, most government offices were deserted as civil servants stayed away from work and gathered near the District Commissioner's office to be addressed by union officials.

Some civil servants who had intended to report to their work stations were barred by their colleagues who heckled them and told them to join the strike. The national vice chairman of the civil servants' union Ramadhan Bendera mobilised workers to stay away from work and told them not to give in to any pressure until the government implements a 600 percent salary demand. Bendera said the strike would force the government to respect its workers. At Taveta town scores of striking civil servants demonstrated outside the local district officer's office then held a morning meeting where their leaders told them to keep off from their offices. The most affected department at the border town was the immigration and by mid-morning reports indicated there was likely to be a crisis at the border crossing as unless civil servants resumed work. Also affected was the Lands office where almost no worker reported in the morning. At the stadium, workers were addressed by branch chairman of union of Kenya civil servants Kubo Tayo, local organizing secretary Rufus Mwainge and Treasurer John Mghanga. In Voi town a few workers gathered at Moi stadium to be addressed by union leaders while in Mwatate a small group gathered outside the local DO's office. Wundanyi MP Mwandawiro Mghanga yesterday urged workers in the area to stay away from work as he supported the strike.

From East African Standard, Kenya - June 2, 2005

Teachers Back Civil Servants On Higher Pay

A teachers' union yesterday backed civil servants in their demand for a pay rise. The Kenya Union of Post Primary Education Teachers' secretary-general, Mr Wanyonyi Buteyo, said civil servants deserved higher salaries and that the Government must consider their demands instead of intimidating them. Speaking at Bungoma, he said: "Civil servants are the engine that drives the Government. It would collapse if they all abandoned duty. "They have been working in very difficult conditions and have a right to demand a pay increment. "If their demands are not met, we shall down tools in solidarity with our fellow workers since this government has demonstrated that it only cares for the rich. "If there was money to award MPs huge salaries, why is there no money to pay civil servants?" Dismissal threats amounted to intimidation and harassment since the grievances were legitimate, said the official. On Tuesday, Mr William ole Ntimama, in charge of the civil service in the Cabinet, warned that any worker who takes part in the strike would be sacked. Nevertheless, a showdown looms today with indications civil servants from across the country vowing to participate in the strike called by their union.

From AllAfrica.com, Africa, by The Nation, Nairobi - June 3, 2005

9,000 Civil Servants to Get Sack Letters

Dismissal letters for the estimated 9,000 striking civil servants are expected to go out today. At the same time, the Government ordered all departmental heads to lock out of office workers who did not report for duty on Thursday and Friday last week. The announcement came even as the Union of Kenya Civil Servants softened its stance on the strike demands and expressed a willingness to accept half of the 600 per cent salary increase they are demanding. Labour minister Newton Kulundu said the Head of the Public Service, Mr Francis Muthaura, had been mandated to write a circular to various ministries authorising them to dismiss the workers who have been on strike since June 2. This followed a meeting with President Kibaki at State House Nairobi on Friday night. The meeting was attended by Dr Kulundu, Mr William ole Ntimama of the Office of the President and Mr Muthaura.

News of the dismissal letters came soon after the civil servants' union leaders announced in Nairobi that they were ready to accept half of the 600 per cent pay rise they had been demanding. Secretary-general Alphayo Nyakundi also sought audience with President Kibaki to "set the record straight". He thinks that the President may have been misinformed by Mr Muthaura and the two ministers about the strike demands. "It is advisable that the President does not listen to only one side and he should allow us to brief him about our position," he told journalists soon after the union officials attended a Sunday service at the St Stephen's Anglican Church, Nairobi. But Dr Kulundu dismissed the suggestion: "Let them not negotiate through newspapers; let them go to the Office of the President - the Directorate of Personnel Management who is their employer."

The minister said those who obeyed his order and reported to work on the last two days of the week will be allowed back today. "Those who were marked absent on the two days (Thursday and Friday) will not be allowed in even if they reported to work today," he added. President Kibaki, the minister said, was fully briefed on the decision taken even before the Friday meeting with the two cabinet ministers and Mr Muthaura. "We briefed him even when he was away (in Rwanda) and during our meeting and he was always on our side," the minister said. And even if the umbrella Central Organisation of Trade Unions calls a nationwide strike, the Government will not back down, the minister added. The strike could have come as a relief to the Government which has a programme to retrench 21,000 civil servants - and thus an estimated 9,000 will leave it with 12,000 under the programme.

This would be in addition to saving millions of shillings which the Government would have spent in paying the 9,000 as early retirement benefits plus a start-up capital normally referred to as the "golden handshake". It will be the first time in many years for the Government to send workers home over a strike - which will also send signals to other workers covered under trade unions. Yesterday, Mr Nyakundi appeared to soften his stance over the pay demand. He said the union needed a counter proposal from the Government to pave the way for negotiating a return-to-work formula. He suggested that the Government could bring its proposal, which can be 300, 200 or even 10 per cent.

During the State House meeting, it was understood that the President was "annoyed" that some civil servants went on strike in disregard of the law. The meeting is said to have endorsed the sacking of all civil servants who took part in the boycott and dashed hopes of talks with their union leadership as currently constituted. The meeting is said to have lasted about two hours. Yesterday, Mr Nyakundi warned that Cotu might call a nationwide strike for all workers in the country if dialogue was not given a chance. Union of Kenya Civil Servants secretary-general Alphayo Nyakundi prays during a service at the St Stephen's Anglican Church, Nairobi, yesterday. The union softened its stand as the Government ordered workers who did not report for duty at the end of last week locked out of offices.

Nevertheless, he dared the Government to sack all its 200,000 civil servants instead of planning to get rid of only a few. His fear was that the Government was planning to use the scheme to achieve the 21,000 targeted number for voluntary retirement. The official, who was accompanied by representatives from other trade unions, urged the workers not to be cowed into abandoning their strike. "You should remain firm, undivided and determined to go on with the strike until we come up with a new direction," he said. He accused Mr Ntimama of being arrogant and incompetent to handle the Public Service ministry. "Mr Ntimama has never experienced hunger as is the case for civil servants. Unless we have a serious dialogue, the Government will experience the force of trade unions as never seen before," he said.

On Saturday, Cotu, MPs and the Law Society of Kenya (LSK) roundly condemned the decision to sack the striking civil servants. They demanded the immediate reinstatement of all those who had been declared sacked, to pave way for a return-to-work formula. The groups termed the move by Mr Ntimama "ill-advised, illegal and a slap in the face of workers' rights". About 10 trade unions met under the auspices of Cotu and asked the Government to form a tripartite committee to start drawing up a return-to-work formula with the workers' union. Acting Cotu secretary-general George Muchai told striking civil servants to ignore Mr Ntimama and go on with the strike until a formal agreement between their union and the Government was reached. Mr Muchai said the tripartite committee would also spell measures to ensure there was no victimisation of workers who took part in the strike.

"Cotu is of the view that what is required now is dialogue as a measure to resolve the impasse. It is totally wrong for the Government to misuse the law by rushing to declare the strike unlawful when the parties have actually adhered to the provisions of the Trade Disputes Act," said the statement. LSK chairman Tom Ojienda accused the Government of mishandling the strike and demanded immediate reinstatement of those sacked. He asked President Kibaki to intervene to save the workers and prevent the collapse of government functions as a result of the industrial action. Meanwhile, Cabinet minister Njenga Karume said the decision to sack the striking workers would enable jobless Kenyans to get employment. "In the villages, we have a lot of frustrated learned and youthful people who will be recruited," he said. Mr Karume, the minister in charge of Special Programmes in the Office of the President, warned the striking workers that there were many people eyeing their jobs. Mr Karume was speaking to journalists after attending a fundraising in aid of Kangware Anglican Church in Kirinyaga District.

From AllAfrica.com, Africa, by Emman Omari And Samuel Siringi of The Nation, Nairobi - Jun 7, 2005

Pay Award for Civil Servants in Budget

Civil servants are set to get a substantial salary increment next month, according to estimates of Government spending released yesterday. The estimates indicate that Sh8.3 billion will go to financing salary increments during the 2005/2006 financial year. Of this, Sh3.4 billion has been earmarked for an award to civil servants while the remaining Sh4.9 billion will finance a pay rise deal that the Government reached with teachers. But the award to civil servants will be nothing close to the 600 per cent they are demanding, according to Finance minister David Mwiraria. And it is not all good news as the estimates also indicate that Sh500 million of the total amount needed to meet the new salary obligations will come from retrenchment of 3,000 Government employees.

Speaking ahead of the Budget day tomorrow, Mwiraria said the demand for a 600 per cent pay increase was unsustainable. And he was adamant that the Government would not negotiate with the civil servants' union over the matter. The union called a nationwide strike last Thursday after the Industrial Court dismissed its plea for a pay increase. Yesterday, Mwiraria said: "The fact that we already spend 40 per cent of our revenue to pay salaries means that a 600 per cent pay rise is unsustainable." The minister also criticised the union for calling a strike despite assurances that civil servants would get a pay rise at the beginning of the next financial year.

"The International Monetary Fund (IMF) and the World Bank were already complaining that we are spending a lot of money on salaries but we convinced them that there was need to pay the employees more," the minister said. The budget outlook also indicates that health workers are likely to lose some their privileges as the Government consolidates its finances. Re-organisation of the public sector payroll is expected to save Sh1.4 billion that will go towards offsetting the salary increment awards. "Voluntary early retirement would lead to a net downsizing of 3,000, saving Sh500 million," says the Medium Term Budget Strategy paper. It indicates that other non-specific allowances and expenditures, such as honoraria and training, would be eliminated from the pay perks of civil servants to close the remaining gap. The police too have something to smile about: The Government has allocated Sh1.5 billion for construction of houses for them. Another Sh500 million will go towards developing houses for prison warders.

In the social sector, the Government plans to spend Sh500 million on famine relief. An additional Sh1billion has also been set aside to buy cereals for strategic grain reserves. The paper also indicates that Sh500 million will be spent on the upgrading of urban slums while Sh1.5 billion will go towards special water programmes. The expenditure estimates paper, however, indicates that parastatal chiefs are in for a rough time following Mwiraria's decision to cut down on money to loss-making parastatals by 15 per cent. This means that managers of State corporations must look elsewhere for funds to run their operations. The decision does, however, provide only limited relief to the taxpayer as a total of Sh18.6 billion is still earmarked to bail out the debt-ridden parasatatals.

Parastatals under the Ministry of Education, including State universities, will get Sh9 billion while those under the Ministry of Health, including troubled Kenyatta Hospital, will get Sh4.6 billion. Mwiraria said the Government was determined to privatise a large fraction of the ailing corporations in order to ease the financial burden they exert on the exchequer. A Privatization Bill that seeks to create a legal framework for the disposal of state-owned enterprises is pending before Parliament. The budget paper further indicates that there is no respite for Health minister Charity Ngilu and her pet project - the National Health Insurance Scheme - which has once again failed to find space in Mwiraria's plan. Last year, Mwiraria dismissed the ambitious programme as unsustainable despite a spirited campaign by Ngilu to establish it.

From AllAfrica.com, Africa, by Benson Kathuri of The East African Standard, Nairobi - June 7, 2005

Civil Servants Asked to Join National Debate on Wages

Kumasi - Dr Paa Kwesi Nduom, Minister of State in-charge of Public Sector Reform, has urged civil servants to be in the forefront of the national debate on wages and productivity. He said there was the need for them to let their voices to be heard and to make the public aware about the essential services that they render to the nation. Dr Nduom said this when he interacted with civil servants from Ashanti, Brong-Ahafo and Eastern regions in Kumasi on Tuesday. The interaction was aimed at looking at the problems facing the service and to device ways to improve the conditions to increase productivity.

The Minister said there was the need for them to get the public to recognise efforts they made to deliver better service, reduce waste in the system and remove names that did not exist from payrolls. He told them that the government had initiated work to design a comprehensive training and education for all levels within the service, adding that this would include training in Information Technology (IT). "It is my hope that we will look for resources to improve the facilities at the Government Secretarial School and the Civil Service Training Centres", he said. Mr Benjamin Asonaba-Dapaah, Mem ber of the Council of State, said the Civil Service and government were inseparable in nation building and urged civil servants to be committed and dedicated to their work to increase productivity. The Council of State Member expressed his gratitude about the interaction and expressed the hope that civil servants would work together at all levels.

From GhanaWeb, Ghana - June 7, 2005

State Sacks Striking Civil Servants

The Government yesterday sacked all the striking civil servants, as patients continued to bear the brunt of the industrial action - with at least five deaths reported across the country. Ordering the striking workers to stay away from their stations, a Minister of State in charge of Public Service, Mr William ole Ntimama, announced that the Government would immediately start recruiting new employees. Public Service minister William Ole Ntimama (centre) addresses a press conference in his office yesterday. With him are Labour minister, Newton Kulundu (right) and Head of Public Service, Francis Muthaura. By taking part in the strike, the civil servants had contravened labour laws and ignored calls for dialogue, Ntimama said at a press conference at Harambee House, Nairobi. He instructed all authorised offices to implement the dismissals. The minister spoke, as the strike, called to press for a 600 per cent pay increase, seemed to fizzle out in most Government departments, except the hospitals. Tales of death and suffering filtered in from district hospitals mainly in Nyanza, Eastern and Coast provinces as nurses and other health workers persisted with the strike. A man and a baby died at Mararal District Hospital in Samburu after failing to get attention from clinical officers and nurses.

In Coast Province, more than 1,000 nurses failed to report on duty. Coast General Hospital, the biggest health facility in the province, was hardest hit with 400 nurses skipping work for the second day. At the Homa Bay District Hospital, three patients died in circumstances linked to the strike. One died on Thursday shortly after arriving at the hospital and was immediately taken to the mortuary. The second, an 80-year-old man, who died at the amenity wards, while the third died in another ward before receiving any attention. The hospital's medical superintendent, Dr Lucy Ojwang', described the situation as grim. A patient, Ms Olga Auma, who gave birth a day before the strike started, said she was forced to leave the hospital before she recovered. Ntimama said the provincial administration and the police had been instructed to ensure Government premises and staff still working were safe, and to bar the dismissed employees from entering.

The Government had embarked on a head count to establish the number of workers who took part in the strike, Ntimama said.
He said he was particularly concerned that health workers went on strike and left patients to suffer. "I was angered by strikers in hospitals and others who closed water points in some districts. It shows they do not have the welfare of Kenyans in their hearts," said the minister. He added: "This is unethical and unacceptable in this country and anywhere else."

The Union of Kenya Civil Servants called its 120,000 members to strike on Thursday after the Industrial Court dismissed its demand for a 600 per cent pay rise as irrational. However, most workers in Nairobi did not take part in the strike, which has seen their colleagues paralyse services upcountry, especially in hospitals, health centres and dispensaries. Civil servants dance in Kisumu streets yesterday. Yesterday, Ntimama said the Industrial Court ruling was supreme, according to the Trade Disputes Act, which provides that "the award or decision of the court shall be final." They had also contravened the Employment Act and were liable for summary dismissal, he said. Ntimama was flanked by the head of the Public Service and Secretary to the Cabinet, Mr Francis Muthaura, Labour minister Newton Kulundu and Permanent Secretaries in the two ministries. Ntimama said only between four to seven per cent of government workers had gone on strike. "There is therefore no question of disrupting public service," he said, when asked whether the dismissals would not ground services.
Ntimama said he considered the loss of jobs a disaster, "because I still believe many of these people were misadvised."
Earlier, the union's secretary general, Mr Alphayo Nyakundi, had declared the strike would go on and dared the Government to sack them. "If one can be sacked for demanding their rights, then let it be," he said in a telephone interview with The Standard.

At the press conference, Kulundu said the sackings would not affect the planned retrenchment of civil servants. Those to be retrenched were required to apply for early retirement voluntarily, he said. At the Kisumu District Hospital, mothers fed their sick babies on the lawns after they found the outpatient wing closed. Others hired boda bodas (bicycle taxis) to take them back home. Children lay on the hospital's veranda and benches hoping that the nurses and clinical officers would change their minds and attend to them. And elderly patients were transported home on handcarts and wheelbarrows in despair. "I came early to be treated after I was turned away on Thursday when the strike started. About 100 people stormed this place and flushed out the medic as I was being diagnosed," said John Aguya. Confusion reigned after twig and placard-waving protesters stormed the hospital and ejected nurses and medical officers, shortly after 9am. A mother who had taken her six-month-old son for treatment at 6am was attended to minutes past midday. "He cried the whole night. I came early for attention, but he was treated at noon," said Lucy Anyango.She said many mothers went back home at 8am after they were told the children's department would not open. "We were many but many left after a nurse on duty said they were on strike," she said. The medical superintendent, Dr John Otieno Obondi, said a roll call would be taken.

At the New Nyanza Provincial General Hospital, interns attended to patients as nurses basked under the sun. The outpatient unit was deserted. A doctor said they were supporting the strike. "Patients are suffering but we also have mouths to feed at home. We feel that the interns will keep treating patients until the Government comes to reason," said the medic. In Mombasa, the Provincial medical officer of health, Dr Anderson Kahindi, confirmed that several public hospitals in the province were in a crisis. Kahindi said only 100 nurses and 30 doctors reported for duty at the Coast General Hospital and were handling emergency cases only while many patients were discharged. Kahindi said other affected hospitals were in Mombasa, Kwale, Taita-Taveta and Kilifi districts. Mombasa District Commissioner Mohamed Maalim said he had deployed administration police officers to the Coast General Hospital to deal with nurses who had threatened to attack their working colleagues. Paul Katana, whose brother was admitted to the hospital on Wednesday, feared the worst, as the patient had not been attended to by yesterday. Maalim said most civil servants had reported to work save for nurses at the Coast General and Port Reitz hospitals. Tension was high at the hospital in the morning when striking nurses attempted to attack their colleagues who were at work. But police moved in and dispersed them. In Hola, the district hospital was under duress as nurses and other medical staff continued with the strike.

In Kisumu, civil servants chanting anti-government slogans along Oginga Odinga Street and Jomo Kenyatta Highway caused a major traffic jam. At one time, the protesters sang hymns and held a mock funeral for the Government. Motorists used alternative routes as the workers blocked the roads. Traders closed the shops for fear of looting and only re-opened after the demonstrations stopped. Nyanza Union of Kenya Civil Servants secretary Kennedy Akoko said the protesters would not be cowed by the Government's sack threat. "We are going to be on the streets until the Government comes to the negotiating table. We are tired of the 'go back to work before we talk nonsense'," Akoko said. District Commissioner Jamleck Baruga had told the workers to resume duty before they could dialogue with the Government.

From East African Standard, Kenya - June 3, 2005

Civil Servants May Sue State

The Public Servants Association plans legal action to prevent the state from reducing the medical benefits of officials who retired before July 1992, the PSA said on Tuesday. "The PSA is considering legal action to prevent the state as employer to reduce the medical benefits of pensioners who retired before July 1, 1992," said Manie de Clercq, the PSA's deputy general manager.

On November 4, 1993, the state and trade unions signed an agreement in which full medical assistance would be granted to those who retired, or terminated their service, before July 1, 1992. "The employer has now indicated that they are reneging from that agreement. Those people must be placed on a medical scheme with limitations," De Clercq said. "It is expected that affected members will from July 1, 2005 be placed on the Medihelp Plus option or be given the choice to join any other Medihelp option. "The problem with this is that Medihelp Plus has a number of benefit limitations, such as for chronic medicine, non-chronic medicine, consultations, dental and a number of other services. "This will mean that the state will reduce its own costs and place an additional financial burden on the affected members," he said. "It seems that the state is intent on reneging on the 1993 agreement that may result in pensioners who retired before 1 July 1992 losing some of their medical benefits. "The PSA is investigating legal action to stop the State from acting to the detriment of affected members," De Clercq said.

From Africa.com, South Africa - June 13, 2005

Civil Servants Strike for More Pay

Mbabane - Swaziland's public schools were either closed or being run by a skeleton staff on Thursday as teachers took to the streets to demand higher salaries. A major complaint has been the discrepancy between salary increments awarded to members of the armed forces earlier this year, compared to those of teachers. Based on rank, army salaries have been raised by up to 50 percent, while fire-fighting personnel were recently awarded R50 million (US $7.3 million) in back pay, dating from 1994. "It is unfair and insulting that the security forces are taken care of, but teachers must always protest [for increases]," said Gladys Thwala, a primary school teacher. The teachers are striking just two days after nurses staged a walkout over poor salaries.

The Swaziland National Association of Civil Servants (SNACS) has called a mass meeting next week, at which the agenda will focus on wage demands. According to the Central Bank of Swaziland, the government intends increasing its spending on public workers' salaries by 21.4 percent in 2005. The Bank said the wage bill for civil servants was expected to be the major contributor to a sharp growth in government expenditure this year, which would drive up the level of service on public debt, expected to increase by 158 percent in 2005. The International Monetary Fund and other financial advisory bodies have urged government to trim the public sector workforce, saying that diminishing revenues could not sustain the high number of employees.

From Reuters AlertNet, UK - 23 June 2005

'Reforms to Reposition Civil Service'

Vice President Atiku Abu-bakar said yesterday that the on-going reforms in the civil service was aimed at repositioning the service for greater efficiency and effectiveness. Speaking at a retreat for federal permanent secretaries and directors at the Sheraton Hotel and Towers in Abuja, Atiku said reforms in the nation's civil service was designed to meet the complex challenges of globalisation. "Government objective is clear: the people of this country require the delivery of high quality services so as to ensure sustained improvement in the quality of their lives. Civil service reforms are not just about slashing jobs but to reposition the service in order to achieve greater efficiency and effectiveness in meeting the complex challenges of globalisation in a knowledge-based environment", he said. International best practices, according to him, required countries to learn from each other. That way, he said, they can adopt strategies that would lead to meaningful results in the face of global challenges. He urged the accounting officers of federal ministries, as top echelon of the civil service, to join the rest of the world in ensuring delivery of quality service.

In his speech, the Head of Service of the Federation, Alhaji Yayale Ahmed, said the Federal Civil Service was in full support of government's reform agenda. "The Federal Civil Service fully supports this administration's reform effort. We are also encouraged that this government is according the civil service all the necessary support to enhance our efficiency, which will lead to a speedier and more effective service delivery", he said, while pledging the loyalty of the service to the reform programme. Former Secretary to the Government of the Federation and Head of Civil Service, Mr Allison Ayida, noted that "what we require is training and retraining and right deployment. At the level of senior management, we require management retraining. At the supervisory and clerical level, we require redeployment and active involvement. It is only at the messenger and technical level that we require a special retrenchment programme taking into account the computer age, internet and modern telecommunications".

From AllAfrica.com, Africa, by Kingsley Nwezeh This Day, Lagos - June 22, 2005

NAB to Check Assets of Civil Servants

Karachi - The Chairman National Accountability Bureau (NAB), Pakistan's supreme anti-corruption body, Lt. General Munir Hafiez said that the NAB has prepared a software to check the assets of civil servants of Pakistan. Addressing top businessmen of this port city at a function organised by the 21'st Century Business and Economics Club, he said that the software has been developed by the Pakistan Revenue Automation Limited (PRAL), which is a subsidiary of Central Board of Revenue (CBR). Every year civil servants file their annual statement of assets to the establishment division, federal government but nobody dares to open envelopes of these returns, he said. He was of the view that in absence of monitoring of these assets (returns) the whole exercise of getting assets or returns is ridiculous. He said that the returns submitted by the civil servants would be checked by the designated officers of the concerned federal ministries and departments.

Defending the plea bargaining system of NAB, he said that the plea-bargaining is initiated by the accused and not the NAB. After written request of the accused NAB investigates the matter and then submits it to the accountability court. The accountability court then passes a verdict and on the basis of court decision the accused is debarred from holding any public office or government job or obtaining any financial facility from banking system of the country. He categorically said that an accused involved in plea bargain case are deemed to be convicted. He said that the Swiss accountability authorities charge 50 per cent of the offered amount by the accused in Swiss plea bargain cases. The Swiss authorities charge this 50 per cent charges as they spend a lot of time and energy in investigation and the report of plea bargain cases. He said that the NAB prefers not to arrest any woman involved in the case and only in extreme case, the involved woman is arrested. He said that the National Re-Construction Bureau NRB has been advised by the NAB to make important policy reforms in district administration system of the country.

Replying to question of sudden increase in fake exports at the Karachi International Airport he said that the matter must be handled by the Collector of Customs itself. Ijaz Fawad Chairman of the leather exporters association complained that second hand clothing is declared as new to get sales tax refunds. Chairman NAB confirmed that the NAB is conducting inquiries against some housing schemes, which according to him charged the applicants but failed to provide the required plots.

From Pakistan Link, CA - June 2, 2005

Pakistan Loses Rs 600 cr Every Year Due to Corruption: Report

The Anti-Corruption Establishment (ACE) of Punjab (in Pakistan) has revealed that every year as many as Rs 600 crore are eaten up by corrupt government officials, and this practice has continued for the past 58 years since Pakistan came into existence. A report prepared by ACE and submitted with the Punjab Chief Minister Pervez Elahi, says that taxation departments, state-owned banks and DFIs, power sector utilities like Wapda, Sui Gas, and other public works departments account for most of the corruption that takes place in the country. The report identifies burgeoning underground economy and smuggling as the two main reasons of widespread corruption in Pakistan's economy, which have expanded at an annual rate of 20 percent over the last 23 years.

According to the report, Punjab alone accounts for nearly 25 percent of the total corruption that takes place in the country. It said that around 33,300 crore rupees has allegedly been eaten-up during the previous regimes in Punjab out of the total transaction of 135800 crore rupees across the country so far since 1947. According to The News, the report reveals that the country's tax system is characterised by widespread tax evasion, lack of documentation, existence of large untaxed sectors and weak administration to collect taxes. As a result around 50 per cent of the total urban income goes unreported, the report says.

The ACE said about 90 per cent of the defaulted loans and bad debt was concentrated around a small number of influential people. In many cases, loan amnesties were granted and loan recovery efforts were undermined by fear of retribution. Meanwhile, quoting the recent estimates the paper reported that annual tax evasion stands at Rs 21800 crore, while public sector banks have suffered serious deterioration in their loan portfolios, mainly because of political interference in their affairs. Due to non-transparent process and weak accountability system, the public sector expenditures were officially misused whereas kickbacks and pilferage of revenue was committed allegedly in connivance with the officials concerned, the report says. The report says that the present system (read military regime) has failed to provide a viable alternative to corruption. According to it, the accountability drives of successive regimes failed because the agencies involved were misused by the government to victimise their political opponents.

From Hindustan Times, India - June 2, 2005

Retired Public Servants Face Risk of Violating Ethics Law

Many retired public servants find jobs in the private sector, but these jobs may be unethical, according to the Public Service Ethics Committee. The committee yesterday reported that around 130 retired officials worked for companies whose business may be related to the retirees' previous tasks with government or public organizations last year. The news has sparked a fresh debate over the ethical aspect of retired public servants' employment in the private sector. Critics expressed concern that former public officials who got jobs in businesses within two years since their retirement might work to seek favor from government ministries or agencies they had served. The number was 34 percent up from 2003. "The count is still underway, so the figure might increase. The reported number is just based on the preliminary count," said an official of the committee, who refused to be identified. "And what's more important is that around half of them got the jobs without even submitting an employment review report to us," he added.

According to the law on public service ethics, public officials are not allowed to work for two years after retirement in private sectors related to positions they had been in charge of for the three years prior to retirement. The rule aims to prevent public officials from offering favors to certain private companies in return for a job guarantee after retirement, and also to prevent private companies that hire former public officials from illegally lobbying public organizations and taking advantage of those former public officials' connections. The committee also recommends public retirees who want to work in the private sector be reviewed by heads of the public organizations they worked for on how their public service and the private business are connected. Once the employment review report is made, the retirees should submit it to the committee.

The preparation of the report is not compulsory, so the committee began the inspection in 2003 to ensure stricter enforcement of the ethics law. "We examined public officials who retired in 2002, 2003 and 2004 and began to work in private businesses last year. We are checking the legitimacy of their employment based on the ethics law and the result will be released in July or August," the official said. In a survey last year, four of 97 former public officials were found to have violated the ethics law in 2003. The committee recommended their dismissal. He also said the committee plans to make the report mandatory.

From Korea Times, South Korea, by Moon Gwang-lip - June 2, 2005

Japan Government Plans Shorter Hours for Public Servants with Babies

Tokyo - The government plans to introduce shorter work hours for public servants with very young children, beginning in fiscal 2007, to provide an incentive for people to have larger families, the Nihon Keizai Shimbun reported citing government sources. Under the plan, work hours will be reduced to four hours per day instead of the regular eight hours, so employees can take their children to day care centers in the morning and pick them up later in the day.

The current rules for full-time national public servants stipulate that they put in 40 hours per week. There is an exception for workers with children aged younger than three, which allows them to take two hours off per day, but critics have argued that the measure is inadequate. About 40 pct of private companies have already introduced more generous work rules for their staff with young children. The government believes the introduction of its planned system will motivate more firms to reduce work hours for parents who need to care for infants, the report said.

From Forbes - June 12, 2005

Japan Mulls Cutting Work Hours to Spur Fertility

The Japanese government is considering implementing considerably shorter working hours for public servants with young children, in a bid to coax workers into having more babies. he proposed initiative comes on the heels of a grim statistic released earlier this month: Japan's total fertility rate - the number of children per woman - fell to a historical low of under 1.29 in the 2004 calendar year. The rate stood at 4.54 in 1947 when the government started the survey. A growing number of Japanese companies have been implementing policies to ease the burden on working mothers and fathers, such as in-house childcare, flexi-time and babysitter vouchers. Some critics have said that the government has been slow in following the private sector's example.

The country's population is expected to peak next year, and the bleak demographic situation is expected to depress economic growth by about 0.8 percentage points a year from 2010. Under the proposed new plan - which would require a revision to a Japanese law concerning public servants - working hours would be reduced to four hours a day, or 20 hours a week, for parents with children aged six and under. Children in Japan normally begin elementary school when they are six years old. Currently, full-time national public servants have to work at least 40 hours a week, though individuals with children under the age of three are allowed to take off two hours per day.

An official at the National Personnel Agency said the proposed new policy had already informally gained a broad following, but there was still some debate over the problem of work-sharing. "If some individuals work only 20 hours a week, the question is who will fill in for them when they are not around, and how to manage the burden of work-sharing so it is fair," the official said. Analysts also cast doubt on the effectiveness of the new plan, saying that younger civil servants may not want to take advantage of the policy for fear of appearing to shirk their work duties. The proposals may however prove an incentive for women to continue working after they have children - a key issue for Japan.

Previous government policies aimed at increasing Japan's birthrate have so far had little impact. Some outlying provinces in Japan have gone so far as to organising group dates, such as hiking trips and cruises, for single people in the hope of spurring more marriages and, by extension, babies. In 1994, Japan adopted the "Angel Plan", which focused on building and expanding childcare centres and other family support structures.

From Financial Times, UK, by Mariko Sanchanta in Tokyo - June 15, 2005

100,000 Teachers to Become Civil Servants

The long-cherished dream of contractual teachers across Indonesia to be made civil servants will soon come true as the Ministry of National Education plans to change their current status this year. "We are planning to appoint at least 100,000 contractual teachers as civil servants and raise the honorarium of some 136,011 others to meet the minimum wage," Minister of National Education Bambang Sudibyo said on Monday. He announced the plan during a joint hearing with Minister of Religious Affairs M. Maftuh Basuni and the House of Representatives Commissions VIII and X, which oversee the two ministries.

Currently, there are around 236,011 contractual teachers assigned to public schools of all levels nationwide, with each receiving only Rp 460,000 per month. Even their renumeration is not paid monthly, but every three months. The salaries of civil servants vary in every region. In Jakarta, for example, a new civil servant gets a take-home pay of Rp 1,850,000 per month. Bambang said the government also proposed that the monthly renumeration of the remaining 136,011 contractual teachers be increased from Rp 460,000 to Rp 710,000. The provincial minimum wages for workers are set at between Rp 340,000 and Rp 711,843.

Asked why only 100,000 contractual teachers would be made civil servants, the minister said that was all the government could afford. The move to hire contractual teachers was aimed at temporarily covering the shortage of teachers in schools throughout the country. Data from the education ministry shows that schools nationwide lack some 427,903 teachers, causing a low ratio of teachers to students. The teachers signed contracts for a three-year period, with the expectation of being hired as a civil servant at the end of the contract, but in reality many of them have worked for almost 10 years without any certainty of being made civil servants. Lawmakers and labor activists have repeatedly urged the government to pay more attention to the contractual workers' well-being, including making them civil servants. "By appointing them as civil servants, we will save Rp 143.9 billion from the state budget as local administrations will pay for their salaries," Bambang said. He added that the quality of teachers would also improve as they will be supervised by regional education offices.

House members told Monday's hearing that the contractual teachers should be made civil servants without undergoing further tests because they had already passed exams when they were initially recruited. They also urged the education ministry to provide 127,000 more contractual teachers to meet the total need for teachers in public and private schools. The lawmakers also stressed that teachers should not be treated as laborers in term of salaries. "It is a noble profession," a legislator said. In the meeting, the education ministry also put forward two other options. The first option is to extend the contracts of 174,232 contractual teachers, which will end in December. Contractual teachers, however, will still be paid the same amount of Rp 460,000 per month. A second alternative proposed that their monthly remuneration be increased to Rp 710,000 and the contracts be renewed after December. The ministry's plan, however, would still have to wait for approval from President Susilo Bambang Yudhoyono.

From Jakarta Post, Indonesia - June 20, 2005

Management Reforms for the Public Service

Traditionally, many public sector organisations have been shielded from the hostile challenges of the competitive business world and rising demands of increasingly informed citizens (McIvor, McHugh & Cadden, 2002). However, in today's continual pressures for transparency, ac- countability and value for money, the evaluation of public sector service performance has drawn growing academic and management interest (Wisniewski & Stewart, 2004). The delivery system of the public sector can only be improved if its management is reviewed and revised. The Royal Commission of Inquiry to examine the conduct and management of the Royal Malaysia Police (RMP), which culminated in a 600-page report publicly released on May 4, 2005, is a good example of a thorough management study. Highlighting many management lessons and implications for the public sector as a whole, the RMP report will be the basis of today's article on how to enhance our public service.

Right approach and cost-effectiveness - The Royal Commission's report comprising 125 concrete proposals was made possible through the efforts of an able team under the leadership of former Chief Justice, Tun Mohd Dzaiddin Abdullah, and former Inspector-General of Police Tun Mohd Hanif Omar as deputy chairman. It is highly possible that the 125 specific recommendations submitted in the Royal Commission report could in some way apply to the whole public service sector.

Among the recommendations were the improvement of "basic needs" of the civil service such as the quality of recruitment; the enhancement of remuneration and conditions of service; and eradication of corruption. From the 60s till now, some might argue, only a few studies to improve public sector quality in Malaysia have been conducted, for example the Montgomery-Esman report on the administrative cadre of the civil service in the 1960s and the Government services report compilation that yielded 241 innovations in 1993 (Abdullah Sanusi et al, 2003 cf translation by Van Ngoc).

Long-term, holistic vs. ad hoc, piecemeal measures - There is a need to change and make amends before any shortcomings in the system deteriorate further. However, offering a few "carrots" here and there to spur efficiency might not yield long-term benefits. Recently, government doctors were granted revised on-call allowances and teachers were offered textbook loans for their children. These short-term measures, though laudable, cannot adequately substitute the need for a thorough study to examine the entire civil service structure.
Instead, ad hoc, piecemeal measures might backfire, creating problems of inconsistencies and contradictions.

Who you know vs. what you know - One specific area of concern is the response of Government agencies towards complaints on substandard service or misconduct of personnel. The general perception has been that genuine grouses are given scarce attention or redress, unless one knows a VIP or when there is public outcry over the matter. With the private sector, customers have the choice to boycott the business that does not deliver. But how can we boycott the services of a Government department without impairing ourselves?

As Prime Minister Datuk Seri Abdullah Ahmad Badawi highlighted at the Harvard Club of Malaysia dinner recently, it should not be the case of who you know but what you know. Unfortunately, insufficient checks and balances in the system may render this principle a yet elusive one. Another area of concern is the employment and dismissal of personnel. In the private sector, it is not uncommon for managers to hire and fire with much less rigmarole and red tape than that required by the Public Service Commissions. So how then can public sector managers manage more effectively? One way is to ensure that the disciplinary system is more efficient and expeditious. In addition, performance and delivery standards have to be adhered to, with processes to deal with non-performers without resorting to the "transfer game" – packing off a non-performer to another department without addressing the problem.

A stitch in time - ltimately, it is in the public's interest for the Government to institute a Royal Public Service Inquiry to enhance the efficiency and integrity of the civil service. Furthermore, inquiries should be followed up with concrete action. In the case of the RMP, there is a grave need to establish the proposed Independent Police Complaints and Misconduct Commission as soon as possible. It is also essential to ensure that these recommendations are followed through at every stage of implementation. And just as for the RMP, we need an ombudsman or equivalent institution for the entire public service. In summary, the successful Royal Commission Report on the RMP should encourage the Government to hasten management reforms in the whole public service, to raise Malaysia's international competitiveness amidst the rapid pace of globalisation taking place worldwide.

Malaysia Star, Malaysia, by Ramon v. Navaratnam - June 18, 2005

Cabinet Backs Extra Three Years of Work for Civil Servants

The Cabinet yesterday approved the Finance Ministry's proposal to extend the civil service retirement age to 63. Extending the age of retirement is seen by the government as a crucial factor in its convergence plan, which aims at improving public finances in time to join the euro. The change would also help to bail out the ailing social insurance fund, which has a £2 billion deficit and is at risk of collapse by 2011.

Unions initially resisted the plan, but after months of negotiations and horse-trading they now appear ready to agree. Finance Minister Makis Keravnos yesterday submitted the proposal, which the Cabinet approved after discussion. "I formed a specific proposal, which was approved by the Cabinet, based on what we talked about with the unions," the minister said. Keravnos declined to disclose further details before briefing the unions. He said, however, that the next step would be to submit another proposal that would amend current legislation on the issue. If everything goes well, implementation of the plan will start as early as July. It provides for a gradual extension of the age of retirement, currently 60, to 63.

The change is set to affect people employed by the government, semi-governmental organisations and local administrations. The state currently employs 35,845 permanent staff, 2,899 temporary and 8,581 hourly-wage personnel, which in 2005 are expected to absorb £912.15 million in the form of wages and £183.45 million in pensions and bonuses. The cost of civil service pensions is set to rise steadily and reach £381 million in 2010. On top of that, taxpayers last year paid around £37 million in civil service overtime costs.

From Cyprus Mail, Cyprus - June 2, 2005

60% of Doctors Oppose Ethics Testing of Medical Students

Six out of ten doctors oppose medical students being given compulsory ethics tests to 'weed out' those who have not absorbed essential principles. Shipman Inquiry chairwoman Dame Janet Smith proposed the tests last month as a way of eliminating unsuitable candidates for medicine before they began practising. Doctors in BMA News' monthly poll, while supporting good ethics teaching at university, said that such tests would not stop the likes of Harold Shipman - murderers like him could read the set text and pass an ethics exam like any other student. The BMA medical students committee has questioned the practicality of the ethics test, but supported a call from Dame Janet for better training in death certification procedures. Full text of story is available from the Press Office: British Medical Association, BMA House, Tavistock Square, London, WC1H 9JP, http://www.bma.org.uk.

From Medical News Today, UK, June 3, 2005

Maroni, Financial Coverage for Tax Cuts from Civil Servants

Rome - After the delay in regional tax (IRAP) cuts, Welfare Minister Roberto Maroni relaunched the proposal to finance the reductions with a turnover block for civil servants: if applied with rigour, it would save 6-7 billion euro. This proposal will certainly make some waves in the majority, and would probably not find support with National Alliance and UDC, who do not want to finance the tax cuts with spending reductions. The financial coverage for the tax cuts, which should be inserted in the next Financial Document, quantified at 12 billion euro for 2006-2008, is the problem to be solved to implement the tax intervention that is widely expected by businesses. The majority has taken its time to come up with the most painless measure possible. On the one hand, the Northern League and Forza Italia are against a VAT increase and taxing financial revenues. On the other hand, AN and UDC do not want an intervention on current spending (and therefore also public administration spending).

IRAP is also inciting some news in international newspapers: the prestigious British daily Financial Times hypothesised an "immediate solution" to finding the resources for the cut with a VAT increase from 20 percent to 21 percent. From Brussels, on the other hand, the PM once again spoke on the subject, saying he was surprised at the criticism received by the government decision to delay cuts until 2006. Berlusconi reasserted that among the reasons of the delay was that the cut would not have had an effect on the economy. Industrialists, in the meanwhile, confirm their criticism of the government. According to Confindustria vice president, Pasquale Pistorio, "if they can't decide, it means they can't govern." National Alliance, with Alemanno and Urso, are embittered about a "lost opportunity". The Northern League, with Maroni, emphasised that a VAT increase would have an increase in inflation. In the meanwhile, the effects of the bill passed yesterday will have on taxpayers, who after the EU Court of Justice sentence were thinking of not paying the June tax payment.

From Agenzia Giornalistica Italia, Italy - June 16, 2005

Businesses and Civil Servants Put on Security Alert

Government security chief issues warning over Trojan email attacks - The government is warning civil servants and critical UK businesses that they need to update IT security systems or risk attack from hackers intent on stealing commercially and economically valuable information. The National Infrastructure Security Co-ordination Centre (NISCC), the governmental agency that protects computer-reliant industries from cyber attacks, issued the alert after discovering that government departments have been the target of Trojan email attacks in recent months.

More than 250 government departments and critical national infrastructure (CNI) companies such as utilities have been alerted to the danger by NISCC, after discovering that criminals have been using highly sophisticated methods to try to trick staff who handle commercially and economically sensitive data. 'For some time now we have been monitoring a number of email-borne electronic attacks against the UK critical national infrastructure,' said Roger Cumming, director of NISCC. 'The majority have been against government, but a number of other UK companies and individuals could be at risk.' Although the attacks use similar methods to those seen in recent corporate phishing attempts in Israel (see below), they are unrelated and of 'industrial strength', says Cumming. The emails use tactics such as mentioning news articles to try to trick the recipient into clicking on a link that downloads the Trojan software.

Sender addresses are also spoofed to make it look as though emails have come from a trusted government department, news agency or individual. 'When you start to measure these attacks, it is clear they come from more than a couple of teenagers, and it's not about stealing money from firms,' said Cumming. 'They are aimed at information-gathering, and the characteristics show that they are extremely well-organised and structured.' The hackers' motives are still unclear, but NISCC says the attacks are focused on covert gathering and transmission of privileged information, and are unlike normal phishing scams which try to trick employees into giving out financial details. While it is hard to pinpoint the hackers, NISCC says the IP addresses used for sending emails and controlling the Trojans, as well as email header information, originate from the Far East.

Once opened, the Trojan installs itself on the user's machine and can be activated to obtain passwords, scan networks, download further Trojans, launch attacks on connected PCs and send stolen data back to the hacker's remote machine. 'They are collecting user names and passwords, uploading documents and downloading further malicious programmes,' says Cumming. The attacks are hard to spot among legitimate network traffic, because standard application ports can be used by the hackers to transmit the stolen data out of the company. NISCC says it is not aware of any information loss resulting from these specific Trojan email attacks, but it is urging businesses to upgrade IT systems before data is stolen. Hackers can use the software to take full control of a user's compromised machine, and the security breach poses a threat to the confidentiality, integrity and availability of any data stored on the computer and its associated network, says NISCC. The centre has been working behind the scenes with governments and ISPs located where they believe the emails have originated, to try to stop the attacks.

IT security vendors have also been sent signatures of the particular Trojans used in these attacks, but NISCC warns the malicious code is being constantly modified to avoid detection by anti-virus software. 'We also advise firms to patch computer software, as 99.9 per cent of these attacks are exploiting existing vulnerabilities in technology products,' says Cumming. 'If everyone in the UK was to adopt our advice then the attacks would not have any affect whatsoever on UK plc.' Cumming also told Computing that employees need to be educated about the dangers of attacks. 'Part of it is about having an educated workforce. It is also about knowing your networks and having a policy in terms of employees connecting to the internet,' he says. 'Surfing on untrusted web sites or opening up untrusted emails can have an adverse affect on the company that you work for. Firms need to adopt a strategy of strength and depth.' For further advice on detection and protection against attacks visit: www.niscc.gov.uk.

Virus writers are in it for the money - Last month's arrest of two computer consultants by the Metropolitan Police illustrates the changing nature of virus writing. Computer specialist Michael Haephrati, 41, and his wife Ruth, 28, were arrested on suspicion of computer hacking. The arrests have been linked to Trojan software used by Israeli private detective agencies to spy on businesses' computer networks. Police are investigating a number of Israeli companies that allegedly hired private detective firms to steal confidential data from competitor's computer networks. 'It used to be script kiddies that were writing viruses to impress their peers, but now people are doing it for financial gain,' said Fran Howarth, security practice leader at analyst Bloor Research. 'Criminals are getting the information so they can sell it, and they are specifically looking for things such as intellectual property, which they can sell for millions of dollars. This could bankrupt some companies,' she said at an Adobe security event. Virus writers are also learning to change the characteristics of Trojan software to avoid detection by anti-virus firms, says Nigel Beighton, head of threat intelligence for Europe at information security firm Symantec. 'As well as regularly updating security software, firms need to realise that enterprise phishing relies on tricking people. They need to instill a healthy dose of scepticism into employees when it comes to trusting emails and web sites,' he said.

From VNUNet.com, Netherlands, by Daniel Thomas - June 22, 2005

Code of Ethics for Civil Servants

Last week, the Montenegro Ministry of Justice presented its draft of the Code of Ethics for Civil Servants and State Officials, that should regulate the standards and rules of conduct that need to be observed and followed by the civil servants and state officials in their work and operations. The Draft Code of Ethics prohibits the civil servants and employees of the public administration to receive gifts or other offers, and shall be obligated, if possible, to identify and report such person to the authorities. Also, the Code states that civil servants and state officials shall not ask for compensation or fee for the services they provided, unless such a fee or compensation is specifically provided for by the Law. Also, the Draft prohibits all forms of abuse of office and position for personal gains, as well as all forms and manifestations of conflict of interest situations that may arise in the work of the public administration.

The Code emphasizes that the loyalty of the civil servants should go to the State and that the public administration employees should complete and perform their duties in a responsible, transparent and efficient manner, eliminating all possibilities that one's personal political or ideological views will meddle with the daily duties. The goal of this Code is to contribute to the efforts for eradication of corruption and corruptible practices in the public administration. After a review by the Government, the Draft shall be submitted to the Parliament for Adoption and shall enter into force after it is published in the "Official Gazette of the Republic of Montenegro". The Code leaves the opportunity to individual state and public administration bodies and institutions to further regulate the issue and adopt their own, specific Ethical Codes, as they deem necessary.

From OneWorld.net, UK - June 21, 2005

House Raises Civil Service Retirement Age to 63

The plenum yesterday afternoon unanimously approved the extension of the age of retirement for civil servants to 63.
Extending the age of retirement is seen by the government as a crucial factor in its convergence plan, which aims at improving public finances in time to join the euro. Speaking earlier yesterday, Finance Minister Makis Keravnos said the extension, from 60 to 63, would save the government £20 million this year, if it were to be adopted by all currently retiring civil servants. The minister was attending a morning session of the House Finance Committee during which he stressed the importance of the bill going through plenum.

Implementation of the measure will start on July 1 and would be on a voluntary basis until July 1, 2008, when retirement would become mandatory at the age of 63. Keravnos told the committee that retirement age had become a chief concern in all European member states, who were now looking to extend it. Germany has already extended the age of retirement to 65 without offering any additional benefits. The minister added that other countries were soon to follow suit as social security funds were in jeopardy. The change would also help to bail out the ailing social insurance fund, which has a £2 billion deficit and is at risk of collapse by 2011. The committee heard that in 1985 the state paid £12.5 million in pensions to civil servants, while the figure exploded by 2003, reaching £156.7 million. The projected figure for 2012 was £202 million, deputies heard.

Implementation of the measure would take place in stages: civil servants who turn 60 between July 1 and December 31, 2006, have to retire at the age of 61; those who turned 60 between January 1, 2007 and June 30, 2008, would be obliged to retire two years later. From then on all civil servants have to retire at the age of 63. The new arrangement safeguards current pension coefficients and bonuses for existing civil servants and newcomers. It also provides additional motive for them to stay on in the form of a higher bonus coefficient based on a scale provided for in the new rules.

Keravnos said extending the retirement age would also affect society. He explained that if the age remained at 60, then the state stood to lose people experienced in European Union issues through their work in the accession process. On top of that the same people could have been employed in the private sector, thus taking up positions that would have been filled by youngsters. Around 40 per cent of civil servants retired early, with women being the majority, Keravnos said. The state currently employs 35,845 permanent staff, 2,899 temporary and 8,581 hourly-wage personnel, which in 2005 are expected to absorb £912.15 million in wages and £183.45 million in pensions and bonuses. On top of that, taxpayers last year paid around £37 million in civil service overtime costs.

From Cyprus Mail, Cyprus, by George Psyllides - June 24, 2005

International Islamic Conference Focuses on Medical Ethics

Jeddah - A three-day international Islamic conference on medical ethics ended here yesterday. The conference, which claimed to be the first of its kind, was held at the Jeddah Chamber of Commerce and Industry, and was organized by the King Abdul Aziz Medical City and the King Khaled National Guard Hospital, with the participation of the female section of Saudi Society of Family and Community Medicine. "The aim of holding this conference," said the chairman of the organizing committee, Dr. Sulaiman A. Karsou, "was to educate doctors, nurses and administrators on how to handle various situations such as patient confidentiality. We felt the need to address the various ethical dilemmas doctors face on a daily basis because ethics are not taught at our universities and those working in the medical field must know how to deal with various situations."

The conference included 22 lecturers, sheikhs and Islamic thinkers. "We concentrated in this conference on how to deal with patients and their treatment," said Karsou, "as well as how to maintain their confidentiality, how to deal with both sexes, with a focus on appropriate behavior when dealing with delicate matters such as child abuse cases." Discussions also tackled issues such as medical and Islamic viewpoints on cosmetic surgery, as well as medical insurance policies. The conference's conclusions are going to be summarized and submitted to the specialized sectors for further scientific and religious reviewing and discussion in upcoming forums.

From Abdul Maqsood Mirza, Arab News - June 3, 2005

Changing the Civil Service - For Better or Worse

Most federal employees are anticipating (or dreading) major changes to the human resources system. The changes rapidly approaching for employees in the Department of Defense and Department of Homeland Security are likely to be more far-reaching than the changes brought about by the Civil Service Reform Act of 1978. But if you thought the major changes for these two huge federal agencies would be the end of change, that may not be the case. Similar changes may be in store for the rest of the federal workforce as well. The Office of Personnel Management has drafted a proposal to change the human resources system for the rest of the government as well as for employees in DHS and DoD. The draft is called the "Civil Service Modernization Act of 2005.")

For those who follow the events impacting the civil service system, most of these changes are not big surprises. The legislation would change the federal pay system and put into place a pay banding system that would give agency managers more flexibility to reward those employees they believe are the most productive. In effect, the draft proposal would set up a pay for performance system and move away from the current general schedule and within-grade increase system that essentially gives most federal employees the same basic pay raise. The legislation would also change some of the provisions for hiring new federal employees and for firing existing employees. And the rules governing labor-management relations in the federal sector would also change. The range of topics for bargaining between agencies and unions would be more restricted, release of information to unions would be more restricted, the right of a union to attend meetings between a supervisor and employees would be more restricted, and appeals by employees subject to an adverse action would also be changed in some ways.

If all of this scares you, don't panic yet. The legislation isn't expected to go into effect right away. Agencies would have to develop a pay for performance plan by 2008 and to eliminate the general schedule pay system by 2010. Moreover, one can reasonably anticipate a strong reaction by federal employee unions which will start lobbying Congressional representatives and sending out press releases opposing the plan. And the dates for the proposed implementation will make the plan subject to any changes in Congress as a result of the mid-term Congressional election and the 2008 presidential election. Since no one can accurately predict what will happen in these elections, the entire plan could be quashed or changed beyond recognition by the time it gets through Congress and is implemented. Having said that, the trend of implementing major changes to the federal civil service system is clear. Some changes along the lines of that proposed by the new civil service reform proposals are likely to be enacted. Here's why:

Those of us who work in and around federal government are like any other industry - we see events and interpret them through our own environment and experience. Large numbers of readers have sent in comments berating the changes in DoD and DHS and many of these readers decry the unfairness of changing a system that in their view has worked well and has been in place for decades. While that is understandable, even the federal government is not immune to changes in society. The existing system in many ways reflects the slower pace of past decades. Computers have made it possible to install faster and more uniform personnel policies throughout government. Private sector employees have been undergoing the threat of being contracted out of their jobs for years and most of us are aware that most of our manufactured goods are now made overseas and shipped back to our shores because it is cheaper and often more efficient. There is no longer a reason to have different personnel offices in all agencies and in all regions. Centralized hiring of new employees is now possible while it could not have been done 50 years ago.

Many readers have commented in our public forums that pay for performance just won't work in government and will bring about a rapid return of the "good old boy system" (although it isn't clear when the "good old boy system" was in place and when it disappeared in the past) and end efficient and effective federal government. That may be true, but most of the voting public doesn't see it that way. Many Americans think of federal employees as being coddled, overpaid and that they don't have to work very hard. Perception is reality and, while most of those reading this article think otherwise, don't confuse your personal views with those held by most voters. A politician who argues that federal employees should be part of a "pay for performance" system has an easy sell. Very few voters are likely to disagree with that argument outside those who work directly for Uncle Sam. And, while some readers argue vehemently that unions did not have any choice other than to support Democrats in national elections, the reality is that the federal workforce is now seen as a vocal part of the national political process - and the vocal part almost always supports Democratic candidates.

Several years ago, changes were made to the Hatch Act that loosened restrictions on political activity by federal employees. The argument was that feds were "second class citizens" because they did not have the same freedom to engage in political activity as those in the private sector. I wrote a column at that time noting that many employees of municipal governments would love to be treated as "second class citizens" in this way. Municipal government employees are often expected to campaign for their political boss - or lose their jobs. Federal employees were largely immune from these pressures as they were not part of the political process. With the unions prevailing in their drive to give federal employees more political freedom, the unions have used the changes to try and expand their political power by campaigning hard for Democrats running for president and Congress. Federal employee unions would be expected to take a position on issues directly impacting federal employees and argue in favor of legislation or proposals that would increase benefits, pay, etc. But union involvement has gone way beyond taking a position on specific federal employees issues.

Instead, federal unions now routinely support Democrats and campaign hard to support specific candidates. And, in the process, they also attack the opposing party and argue long and hard for federal employees to vote for the candidates they support. In other words, federal employees are no longer "second class citizens." They are free to engage in some political activity. While most probably do not do so, the perception of the political class is that federal employees are now part of the political process and their representatives will support the Democrats' candidate. Our polls from readers show that federal employees don't vote as a bloc and do not have one political view. But the vocal proponents speaking on their behalf are not reflecting this diversity of the federal workforce.

In effect, federal employees are no longer protected as they once were. There is now a practical, political reason to limit the power of unions, to contract out more federal jobs, to restrict union representation in large segments of the federal workforce, and to alter the pay structure for civil service employees. That may change in 2008. If the unions continue to strongly support Democrats and the next occupant of the White House has a "warm and fuzzy" feeling toward federal employee unions, events may change. President Clinton certainly gave unions more access and union officials more perks (while continuing to limit the size and pay raises for federal employees). Something similar may happen after the next election. Or, it is possible a similar scenario will play out again and the Republicans will occupy the White House for another four or eight years. And, if that president believes federal employees or their representatives tried to defeat him (or her), there may again be a political reason to change the nature and structure of the federal workforce. So, while the final outline is in doubt, change will happen. Enjoy the ride - or retire when you are eligible!

From FedSmith.com, by Ralph Smith - June 13, 2005

Governance, Administrative Innovations to Be Recognized on Public Service Day, 23 June, at United Nations

Eight pioneering projects from the developing and developed world will be honoured this week with the prestigious Public Service Awards 2005 at the United Nations Headquarters in New York. With good governance a prerequisite in ensuring sustained development and the achievement of the Millennium Development Goals, this year's Awards focus on innovative projects that prioritize accountability, service delivery, transparency and the inventive use of e-governance.

The Awards ceremony will be held on 23 June, also recognized globally as the United Nations Public Service Day celebrating service to the community at the local, national and global levels. The event will be held in Conference Room 3 from 9:30 a.m. to 11.30 a.m. This will be followed by a technical panel on "Innovation and Successful Initiatives in the Delivery of Services" in the afternoon.

Speaking about the Awards, the Under-Secretary-General for Economic and Social Affairs, Jose Antonio Ocampo, said: "The United Nations Public Service Awards recognize groundbreaking institutional efforts to make services more efficient and accessible to all members of society and to engage people's active participation in their design. This event serves to showcase and share, in a global setting, novel models of governance that are being practised in different parts of the world." The Awards initiative has become a pivotal tool in disseminating information on successful experiences and best practices in good governance geared towards citizens' satisfaction and development, in particular, the achievement of the Millennium Development Goals. Equally important, it has enhanced the visibility and motivation of public servants around the world.

This year's selection process for the Awards was marked by an overwhelming response from around the world which brought in 215 nominations. A total of eight nominees doing innovative work at rural and urban areas were selected from six countries - Canada (The Vancouver Agreement and Industry Canada, Office of Consumer Affairs), India (Bhagidari Cell, Office of the Chief Minister, Delhi ), Mexico ( Secretaria de Agua, Obra Publica e Infrastructura para el Desarrollo and Unidad de Gobierno Electronico y Politica de Technologias de la Informacion), Morocco (Autonomous Establishment of Exports Control and Coordination), Singapore (Ministry of Trade and Industry), and Spain (Public Employment Service of Castile and Leon).

The General Assembly in 2002 established 23 June as the United Nations Public Service Day, and it has now come to be observed widely by Member States. The Headquarters event will be attended by the General Assembly President Jean Ping, Under-Secretary-General Jose Antonio Ocampo, Award winners and delegates and will include videoconferencing with selected countries celebrating the Day. The United Nations Division for Public Administration and Development Management is responsible for administering the Awards and promoting the Public Service Day. The Division assists governments in strengthening policy-making and improving the efficiency of their governance systems through disseminating information, delivering technical assistance and providing an international forum for the exchange of national experiences.

From I-Newswire.com (press release) - June 23, 2005

E-Government Helps Mozambique's Online Efficiency

The Government of Mozambique has successfully implemented an e-government pilot project connecting 15 national public administration entities in Maputo. The initiative was funded through the Development Gateway Foundation's e-government grants programme in Washington, US in partnership with the Italian government. Called Government Elecronic Network (GovNet)-Pilot, the project is part of Mozambique's national Information and Communications Technology Policy Implementation Strategy, which aims to improve public services and increase transparency in the public sector.

The pilot has established a communications platform for the Ministry of Public Administration, Ministry of Finance, Ministry of Health and Ministry of Science and Technology, giving them a unified e-mail system, intranet, and document management system, as well as cost-effective shared access to the Internet. The network is now being used by over 500 government employees via nearly 400 work stations. As part of the project, a new government web portal has also been launched at www.govnet.gov.mz, intended to increase public access to information. The site will gradually add content from all government ministries, as well as other information and services to encourage public participation in national policy processes. "GovNet increases our capacity to co-ordinate national efforts to foster growth and reduce poverty in Mozambique," said H.E. Venancio Massingue, Minister of Science and Technology. "It is the first step but already we are seeing more efficient inter-departmental communication, as well as reduced administrative costs by avoiding a duplication of efforts."

Plans are under way to scale up the GovNet initiative to include up to 150 other public agencies in Maputo and Mozambique's ten provinces. Once complete the network would connect approximately 10,000 government workers and 7,500 work stations. In addition GovNet is currently being used as the communications platform for a second Development Gateway/Italian-funded initiative to create a national land registry. The e-government grants programme provides early financing and technical assistance for initiatives, that will enhance the effectiveness and transparency of government operations in partner countries.

The programme was initiated through a co-financing agreement with Italy and is open to additional partners for projects in Africa and around the world. Alan J. Rossi, Chief Executive Officer said, " This programme is a key component of the Development Gateway's mission to put the Internet into developing countries. It enables partner countries to address their national development issues, while demonstrating the potential for larger initiatives that could be funded by the international community." The Development Gateway is an independent, none-profit organisation based in Washington, DC. For more information or to join our global online community, please visit www.developmentgateway.org.

Business in Africa (subscription), South Africa - June 17, 2005

Mozambique Gears Up for E-government

The Mozambican government has implemented an e-government pilot project connecting 15 national public administration entities in Maputo. The project will be scaled up to a national level later. The project, backed by the Italian government, was co-financed by the Development Gateway Foundation, an independent, non-profit organisation focused on leveraging the Internet for the benefit of developing countries. Called the Government Electronic Network (GovNet) Pilot, the project is part of Mozambique's national ICT policy implementation strategy, which aims to improve public services and increase transparency in the public sector.

The pilot has established a common communications platform for the ministries of public administration, finance, health, and science and technology, among others. The ministries now share a unified e-mail system, intranet and document management system, as well as cost-effective shared access to the Internet. The network is being used by over 500 government employees via nearly 400 workstations. As part of the project, a new government Web portal has also been launched at www.govnet.gov.mz, intended to increase public access to information. It is envisaged that the site will gradually add content from all government ministries, as well as other information and services to encourage public participation in national policy processes.

"GovNet increases our capacity to coordinate national efforts to foster growth and reduce poverty in Mozambique," says Venancio Massingue, minister of science and technology. "It is a first step but already we are seeing more efficient inter-departmental communication, as well as reduced administrative costs by avoiding a duplication of efforts." Meanwhile, plans are under way to scale up the GovNet initiative to include up to 150 other public agencies in Mozambique's 10 provinces.

Once complete, the network will connect approximately 10 000 government workers and 7 500 workstations. In addition, GovNet is being used as the communications platform for a second Development Gateway/Italian-funded initiative to create a national land registry. "This programme is a key component of the Development Gateway's mission to put the Internet to work for developing countries," says the foundation's CEO, Alan Rossi. "It enables partner countries to better address their national development issues, while demonstrating the potential for larger initiatives that could be funded by the international community."

From ITWeb, South Africa - June 17, 2005

Namibia Launches ICT Alliance

Deputy Secretary to Cabinet Steve Katjiuanjo on Wed-nesday afternoon launched the ICT Alliance, a body that will address Namibia's Information and Communications Technology. The launch took place in Windhoek. ICT Alliance is a non-profit organisation comprising of all ICT related bodies in Namibia, including the government and the private sectors. It intends to narrow the digital divide that exists in the country as spelled out in Vision 2030. To facilitate a better, efficient and effective functioning of the new alliance, three sub-committees have been established, namely ICT Po-licy and Universal Access, ICT Industry, and Capacity Building, each having its own terms of reference and projects. The alliance is also planning to run a project to be called Wise Namibia, with the vision to give Namibians equal access and skills to use and benefit from information society services and communication systems. "The intention is to create a wide client base for e-governance and e-commerce," the chairman of ICT Alliance Peter Mbomeremarked. He said 200 000 Namibian adults, including 5 000 teachers and 2 000 unemployed youth would benefit from Wise Namibia. Wise Namibia Project activities also include the setting up of 107 ICT community centres around the country.

Katjiuanjo said he was pleased to launch such an important organisation that seeks to chart the dawn of a new chapter for Namibian ICT at large, adding that the ICT revolution sweeping across all continents has also found fertile ground in Namibia. "The Namibian government has placed high priority on e-governance and in this regard has instituted the necessary steps needed to implement the realization of this initiative," he remarked and added that an e-governance policy for the public service has been finalised and pending Cabinet's approval, implementation would start soon. "We are all aware that the information society is an evolving concept and its implementation is at different levels of implementation across the world reflecting the different stages of ICT development globally... Namibia as a participant of the World Summit on information society (WSIS) has committed itself to the declaration of Principles and Plan of Action, which amongst others envisage a people centred, inclusive and development-oriented Information Society, where everyone can create, access, utilize and share information and knowledge, thus enabling individual communities to achieve their full potential," he stated.

Katjiuanjo said although the government has a leading role to play in developing and implementing comprehensive, forward, looking and sustainable e-strategies, it needs the private sector and civil societies in devising and implementing such national e-strategies. He said it was because of the partnership between government, private and civil society that Namibia has been recognised as a rapid Internet growth country. "Namibia has an active ICT sector of about 300 companies, with varying sectoral ICT compliance. However, lack of local skills created a situation where the more complex opportunities in Consultancy and System development are being performed by expatriate IT companies and consultants," he said. It was further noted it was high time to try and become more self-reliant and build up skills to serve the people on all fronts.

From AllAfrica.com, Africa, by Emma Kakololo of New Era, Windhoek - June 17, 2005

Morocco Set to Boost E-government

Morocco is set to boost e-government which has become a "strategic objective for the economic and social development of the country, according to Prime Minister Driss Jettou. Morocco cannot stay on the fringes of the universal digital society because it would affect its competitiveness and development efforts, said Jettou at the opening of the annual national forum of e-administration "e-forum 2005." E-government in Morocco is no longer an offer of information online, but also an offer of services online, the Prime Minister pointed out. Jettou said the government works for accelerating the integration new information technologies in economy, education and society. He recalled the action plan drawn up by the e-government committee for 2005-2008 under which MAD 1.5 billion (around USD 166 million) were allocated to provide over 200 services online in relation to the public sector. Jettou also underlined the importance to promote citizens' use of information technologies, noting that the government has approved a program aiming to establish 8500 multimedia rooms in schools in three years as of 2005, for a global budget of MAD 1 billion (around USD 111 million). The two-day forum is an opportunity to exchange experiences with international experts on e-administration.

From Arabic News - June 23, 2005

Call for Papers: 3rd International Conference on e-Governance

Lahore University of Management Sciences is hosting the 3rd International Conference on E-Governance (ICEG 2005) from December 9 to 11, 2005. ICEG 2005 aims to provide a platform to government officials, scientists, faculty, practitioners, and students across the globe to present and deliberate on their research findings, experiences, strategies, policies, technologies and case studies in the field of e-governance. It will not only help in improving the general level of awareness among the stakeholders but will also help in streamlining a roadmap to take the e-governance strategy initiative to the next level. It is a unique opportunity to not only share research findings and experiences, but also to interact with the major information technology solution providers, government officials, and NGOs. ICEG-2005 will be held from December 9-11, 2005, in Lahore, Pakistan, at Lahore University of Management Sciences (LUMS).

The conference invites new and original submissions in the e-governance area including (but not limited to) the following topics: Governance Framework; * Capability Building; * Implementing E-Government; * E-Activities; * Citizen Services; * Processes; * Technology Directions; * Management; * Case Studies and Experiences. Deadline for submitting the paper is August 1, 2005. For further information please visit the conference web site at http://web.lums.edu.pk/iceg2005.

From digital opportunity channel, India - June 7, 2005

Public Warms to Online Services

Almost a quarter of contacts people have with federal government agencies are on the internet, according to a survey that will be released today. The federal government survey is the first of its kind to cover e-government at federal, state and local levels. It finds that 39 per cent of Australians have accessed online government services in the past 12 months. Face-to-face service is still preferred: 52 per cent have accessed over-the-counter services in the past year. Half of those who did not use e-government services, did not use the internet at all, the survey finds.

The survey outlines how Australians use e-government services and how satisfied they are with them. Of those who used the internet, the main reason they did so was so they could do it at a time that suited them and because it saved time. The survey finds also that overcoming geographic barriers are a motivator for people to contact government agencies on the internet. Almost half (46 per cent) of total contacts were in person, followed by telephone (28 per cent) and internet (19 per cent). The federal government is most successful at attracting people online. The internet accounts for 23 per cent of contacts with the Commonwealth, 19 per cent of contacts with state/territory governments, and 15 per cent of contacts with local government. The most commonly accessed internet services are personal tax (16 per cent), land rates or tax (10 per cent), and car, boat and vehicle registration and licences (8 per cent).

The survey finds there is no typical user. Satisfaction with the internet is high, but expectations of what can be achieved online are low, it says. The survey, commissioned by the Australian Government Information Management Office, was conducted by a consortium of three companies in 2004-05. It will be launched today by special minister of state Eric Abetz. Senator Abetz will launch the new Australia.gov.au website on Thursday. "Traditional methods of contact are still important, but there is growing demand for services to be delivered online," he said. "Not only are more people using the internet to contact government, they're increasingly happy with the results in comparison with using the telephone. "A solid 90 per cent of study respondents said they had achieved what they set out to do, using the internet."

From Australian IT, Australia, by Selina Mitchell - June 21, 2005

DIT on E-governance Project

Department of Information Technology has issued guidelines for capacity building and institutional framework for e-Governance under the National E-Governance Plan and called for a programme steering council to provide the overall vision and broad policy direction. Planning Commission has allocated funds as Additional Central Assistance (ACA) to the tune of Rs 300 crore to all state states for initiaiting NEGP as communicated by the Commission. It has issued broad guidelines for the use of ACA indicating the first priority is capacity building. ACA allocation should be first utilised for capacity building. The remaining amount including ACA of subsequent years will be utilised for project implementation, the norms said.

Capacity building funding does not cover support towards capital expense. A state e-Governance Mission Team needs to be formed to support the Programme Steering Council and its expenditure can be fully met for the next three years utilising this ACA. It would cover expenditures towards outsourced agencies, operating expenses, training and hardware related infrastructure expenses. However expenses incurred on Project e-governance Mission Team from ACA under these norms would be limited to the initial period till sanction of the project by competent authority.

From Digital Opportunity Channel, India - June 14, 2005

Verdict In on E-government

Australia's use of online government services has nearly doubled over the last two years, with taxpayers swapping standing in queues for Web transactions, according to the most comprehensive study of the subject to date. Compiled by a consortium of Dandolopartners, Roy Morgan Research and BDO Consulting on behalf of the Australian Government Information Management Office, the survey of nearly 6000 Australians found usage of e-government services has jumped from 21 percent in 2002 to 39 percent in 2004.

In terms of what Australians liked from their local, state and federal government online services, it seems the Web has appeal for the daily necessities of life: community and social services (20 percent), transport (18 percent), land, property planning and construction (15 percent) and taxation, business services, finance and economics (11 percent) made up the top four rankings, followed by health (7 percent). The figures appear to vindicate a sustained move by both state and federal governments to wean their citizens off costly call centre, direct mail and face-to-face communications where Web-based information or transaction services are more appropriate and convenient. Such services include registering vehicles, paying council rates, lodging development applications and collecting on the billions of dollars in election cash giveaways like the federal government's Family Allowance, Baby Bonus and various childcare subsidies. On the vehicle registration front, VicRoads CIO John McNally said the survey correlated with his own experience of "close to 100 percent of licence renewals now done electronically".

As to why Australians prefer the Web to standing in a line at Centrelink or the local council office 42 percent cited as the persuader the convenience of being able to do business at a time that suited them, followed by 37 percent who felt it took less time - especially the prospect of a two-week turnaround on their tax return. In terms of why people avoided electronic contact, 37 percent reckoned ("rightly or wrongly" according to the report) that face-to-face contact was the only way to get a meaningful dialogue going with those employed by their tax dollars.

Special Minister of State Senator Eric Abetz said the survey revealed Australians were switching from telephony to browsers as a preferred means of communication. "Not only are more people using the Internet to contact government, they're increasingly happy with the results in comparison with using the telephone. A solid 90 percent of study respondents said they'd achieved what they set out to do using the Internet," Abetz said. Either that, or Australians are fed up with paying for the privilege for being put on hold.

From Computerworld Australia, Australia, by Julian Bajkowski - June 20, 2005

E-government Given Thumbs Up

Australians will embrace e-government services provided they know they exist, a comprehensive study has found. The Australian Government Information Management Office (AGIMO) made the finding in an independent survey it commissioned of nearly 6,000 Australians. "This is the first study to cover federal state, territory and local government together, and it shows that people will use online services if they know they're available," Special Minister of State, Senator Eric Abetz, said.

The survey, Australians' Use of and Satisfaction with E-Government Services, found online government offerings are used by 39 percent of Australians. This was up from 21 percent two years ago. There was good reason for the rise, too. Online government experiences were generally satisfying, according to the survey. Ninety percent of Internet contacts resulted in people achieving what they wanted, it said. Lack of awareness - named by nearly a quarter of respondents - was the main reason why an online government service would not be used. "At all focus groups several participants stated 'I didn't know you could do that' when told by others in the group of particular services available online," the survey said.

The survey also analysed the demographics of respondents who opted for communication channels other than the Internet. The 'converted' demographic was consistent with past research on Internet use. Those who did use e-goverment service were more likely to be male, full-time professional workers with an income of AU$50,000+. "The challenge for governments is to effectively raise awareness, while bearing in mind that expensive advertising strategies will rarely be justified in terms of financial payback," the survey said. Most participants surveyed in the focus groups and interviews said time management reasons were the major benefit of accessing goverment online.

From ZDNet.com.au, Australia, by Steven Deare - June 21, 2005

Government Faces Call for E-Service Take-Up Drive

Pressure builds for national campaign to spur demand for eGovernment - The Government is likely to be asked to fund a large-scale marketing campaign to promote online public services, eGov monitor has learned. At present only around 15 per cent of the public are using eGovernment services, say government sources. Figures such as this have led senior officials to come to the view that in order to boost the current low levels of take-up, the Government must give financial support to a dedicated marketing drive for e-services. However recent government-funded research indicates that while marketing campaigns do make the public more aware of eGovernment services, they are not necessarily effective in increasing actual take-up. The same research, produced for the e-Citizen National Project on Take-Up and Marketing, suggests that 46 per cent of adults in England are willing to use online public services.

Despite promising growth in the take-up of some e-services, the need to drive up public usage across the board remains a major concern for the UK's eGovernment programme. Earlier this month an official from the Office of the Deputy Prime Minister reportedly gave an eGovernment conference in Washington, DC, his thoughts about a possible UK e-Government marketing campaign. Julian Bowrey, the ODPM's local eGovernment divisional and programme manager, is reported to have told delegates that a campaign needed to target two key groups of potential users. One of these was "grumpy young men who want to pay their parking fines online and want to complain, preferably at three in the morning". The other was women who have an interest in local community services.

From eGov monitor, UK - June 21, 2005

Belarusian Government Agencies Online (A Survey of Web Sites)

A second analysis of eGovernment in Belarus conducted by of e-Belarus.org has shown that little progress has been indicated in comparison with the previous year. The review of 2004 was based on standard ideal e-government criteria and showed that the majority of governmental agencies websites gave thematically organized content that duplicated offline information. Only 6 percent of websites presented some specific information accessible only online. 56 percent gave only minimal information making it possible to contact government officials via telephone or ordinary mail. Only 3 percent of websites made governmental bodies more accessible and 4 percent provide some online services.

The new study aimed at measuring the quality of government-to-citizen online communications within the national context (rather than to compare it with ideal standards) - including 3 major areas: access to information, engaging or representing citizens, e-services functions- on national, regional and district levels. According to the data collected, a general profile of Belarusian e-government may be presented in the following way: national executive government body providing static (informing) and dynamic (non-interactive e-service) information about governmental structure. Regional and district institutions web-sites are very few in number though in many cases provide almost the same level of e- informing and e-participation. 55 percent of governmental websites represent national bodies, 11 percent represent regional and 34 - district administrations. 22 percent of all websites are not updated. The majority of governmental agencies websites give thematically organized content that duplicates offline information. 45 percent give only minimal information making it possible to contact government officials via telephone or ordinary mail. 34 percent of websites make governmental bodies more accessible (possibility to apply online, and/or forums, discussions or forms for complaints) and 4 percent provide some interactive online services.

Significant improvement of government agencies accessibility as compared to the 2004 survey data (3 and 34 percent respectively) is explained by two major reasons: 1) "softer criteria"; 2) growing portion of district websites. Thus it may be stated that the general situation with the accessibility has not changed significantly. On the other hand a smaller portion of websites providing only minimal information (45 percent in 2005 and 56 percent in 2004) indicates that more websites give specific information accessible only online. And the level of interactive e - services remains the same (4 percent).

The analysis shows that Internet potential is not yet used fully to bridge the gap between citizens and governmental institutions. The general trend of e-government official initiatives indicated by the study may be defined as "one way communication with some possibilities of feedback". There are no plans to develop and support financially a large-scale modernization strategy and action plan to re-engineering back-office in the interest of front-office in view of the latest technologies and greater openness and a need for new services. Meanwhile interactivity as a major characteristic of e-government can be accomplished if only the back-office of the government truly reformed and the government wants more transparency and better services for people and businesses.

From I-Newswire.com (press release) - June 19, 2005

Stanca, 1.2 Bln to Renew Local Authorities

Rimini, Italy - "The modernisation process of public administration is advancing with full sails. The indicators reveal that the first phase, with 134 'digital workshops', advance 62 pct on average," declared Innovation and Technology Minister Lucio Stanca, on inaugurating the fifth Salon of local Euro P.A. autonomies, undergoing in Rimini fair. Stanca however observed that "in these three years a different spending capacity has emerged from local authorities, therefore to optimise financial investments issued for the implementation of e-Government resources regarding very late projects will be revoked. Sometimes using the resources is a slow process. This is not fruitful from an innovation point of view, because many projects will not be completed on time and they will have to be reviewed as digital technology does not wait, but it changes and evolves. [...] Government did its part investing 1.2 billion euro, as well as 240 million UMTS funds, also with financial laws, several contributions, CIPE investments and local authority investments. This is an unprecedented effort in the history of Italy in modernising public administration, both central and local."

From Agenzia Giornalistica Italia, Italy - June 22, 2005

Race Is On to Boost E-government Take-up

Most local authorities will have their services online by the end of the year - and now the race is on to persuade the public to use them, according to one of the officials in charge. Julian Bowrey, divisional manager of the local e-government programme at the Office of the Deputy Prime Minister, predicted that by the end of the year nearly all authorities will have their services online. "We think there will be on average 98 per cent e-enablement by the end of the programme," he said. Speaking at the Government Computing Conference in London he said: "I think the e-government project is on course - we are seeing a real change in the way local authorities provide services. We are seeing real benefits. We are seeing increasingly efficient, effective and popular local services as a result of our investment in e-government," he added. But he admitted that take-up of services is still not what it should be: "We have a big challenge. Most people are willing and interested in doing government services online but the truth is they don't."

Bowrey said much of this is to do with the way the services are marketed: "A lot of that is because they don't know that we do this. Local authorities are not very good at marketing their services and certainly not very good at marketing their e-services." He added: "The evidence is that there is an audience there but we aren't getting out there and making that message clear." This is something that needs to be addressed before the e-government programme is completed at the end of the year, he said, if the UK is to get the real benefit of the investments made. Nick Deyes, head of ICT and e-government at East Sussex County Council, agreed. "We've got to tell people what we're doing. We've got to market it and make sure that we get feedback," he said.

From Silicon.com, UK, by Steve Ranger - June 21, 2005

Toward Interoperability in EU-wide E-government

Overcoming bureaucratic hurdles to set up a company in your own country is complicated enough; doing it elsewhere can be even more difficult. An architecture that allows different public administrations in different countries to interoperate offers one solution. "Interoperability is currently the hot topic in e-government," notes Themis Tambouris, the project manager of the IST programme-funded project EU-PUBLI.com. "With our system a public administration would be able to integrate its services with those of other providers operating in other fields and in other countries securely over the Internet."

With the potential to lead to an EU-wide secure intranet for public administrations, the EU-PUBLI.com architecture is defined as a Unitary European Network (UEN) bringing together the distributed and autonomous systems of different administrations into a common cooperative framework. Though the project is focusing on a usage scenario of public administrations dealing with companies that want to establish subsidiaries in other EU states, the potential benefits of the system are widespread for citizens and public administrations in general. "In essence the system enables one-stop, cross-border e-government services. Say you want to set up a business in another country, this would typically involve having to contact multiple public administrations in that country and your country to obtain the information and documents you need. With EU-PUBLI.com all of these services would be available over the Internet through an easy-to-use interface," Tambouris explains. "The system is designed to be easy to update for public administrations to provide services efficiently and easy for citizens to obtain them."

By using open standards such as XML, the architecture overcomes interoperability problems between the proprietary and legacy systems of different public administrations. "There are three dimensions to overcoming interoperability problems: firstly at the organisational level, where public administrations need to learn to cooperate and end their insularity; secondly at the technical level by allowing different proprietary systems to work together; and thirdly at the semantic level by making different systems understand each other," Tambouris says.

By the time the project ends in October, the project partners aim to have "achieved an architecture that solves many of the existing difficulties of interoperability." Trials in Italy and Greece over the coming months are expected to prove the functionality of the system ahead of plans to commercialise. The potential for it to be adopted by public administrations across Europe is high, given the increasing interest of EU Member States in applying e-government solutions. "Citizens are driving the rollout of e-government because they want to see the public sector provide services as efficiently as the private sector," the project manager notes.

Contact: Themis Tambouris, Centre for Research and Technology Hellas, Informatics And Telematics Institute (ITI), Km 6, Charilaou-Thermi Road, Po Box 361, GR-57001 Thermi-Thessaloniki, Greece, Tel: +30-2310-891588, Fax: +30-2310-891544, Email: tambouris@uom.gr.

From Pressbox.co.uk (press release), UK - June 22, 2005

Oracle Technology Platform Drives Egypt's Comprehensive E-government Initiative

As part of a comprehensive e-government initiative, Egypt's Ministry of Communications and Information Technology (MCIT)/ MSAD/MOF has licensed a comprehensive range of Oracle technology to ultimately power and link up to 5000 financial units throughout the country. MCIT selected the Oracle Database, Oracle Application Server, and Oracle Internet Developer Suite as the technology backbone of its government resource planning (GRP) system, developed by partner (Giza Systems) and MCIT/MSAD staff members and currently being deployed at many different government locations.

'A crucial element of Egypt's e-government project is the automation and centralization of the country's federal accounting procedures, which will ensure greater efficiency and transparency in our financials,' said Dr. Ashraf Abdel Wahab, Senior Advisor to the Minister of State for Administrative Development. 'In choosing a technology provider, our specific requirements included software with significant security features - given the public sector nature of the e-government initiative - as well as a technology platform with advanced levels of availability and scalability so we could access the required information easily and add users as required. Oracle has been the ideal fit thus far in the deployment of Egypt's national GRP infrastructure.'

More than 5000 units in the Egyptian government will have access to the Oracle Database, the only offering of its kind with 17 independent security evaluations. The software's inherent business intelligence capabilities will enable ministries in Egypt to create data warehouses and perform data mining functions which are key to the federal accounting process. Given the critical nature of the information being shared between ministries, the Oracle Database will provide continuous data availability despite any unscheduled downtime, human errors, or planned maintenance.

Dr. Hoda Baraka, Senior Advisor to the Minister of Communications and Information Technology, commented on the performance of Oracle staff by saying: 'During the ongoing implementation of the Government ERP project, Oracle Egypt has shown a tremendous amount of cooperation, support and commitment towards its customer and partners. Together, we were able to solve all technical problems that faced the implementation of this complex project. The responsiveness and technical abilities of Oracle staff were extremely high and up to the standards demanded by the Ministry.' Similarly, the Oracle Application Server is the application platform suite (APS) that acts as the 'glue' for integrating and deploying the Egypt e-government's ERP applications, portals, and Web sites. Oracle Identity Management System -- ensuring that specific people only within the government have access to potentially sensitive information --is a critical element of the Egypt e-government project that is deployed on the Oracle Application Server. The software also lowers total cost of ownership and management for organizations like Egypt e-government who may otherwise expend more resources to purchase, integrate and maintain solutions not engineered to work together.

This e-government deployment further strengthens the partnership between MCIT/MSAD/MOF and Oracle. The two organizations recently announced a special discount and training scheme to further facilitate the country's move toward online services and increased technology adoption. Commenting on e-government initiative, Atef Helmy, Managing Director, Oracle Egypt, said: 'Oracle and its partners in Egypt remain firmly committed toward benefits that e-government initiatives such as this one deliver, including increased efficiencies, transparency, and cost savings. We are delighted to have worked with MCIT/MSAD/MOF on this initial phase of the Egypt e-government project, which further attests to Oracle's market leadership in the Middle East and North Africa's public sector, as an increasing number of regional governments continue their e-government transition.' In addition to the company's partnership with Egypt's MCIT/MSAD/MOF, Oracle software has been deployed as part of e-government infrastructures in Saudi Arabia, the United Arab Emirates (Abu Dhabi, Dubai and Ras Al Khaima), the Kingdom of Bahrain and the Sultanate of Oman.

From AME Info, United Arab Emirates - June 1, 2005

UAE Federal Government to Adopt Enhanced HR Procedures in Line with International E-government Best Practices

The Human Resources (HR) Team, responsible for the UAE Federal eGovernment HRMS (Human Resource Management System) initiative and reporting in this capacity to the UAE Federal eGovernment High Committee, is currently studying various alternatives for better government HR.

"The decision on adopting enhanced HR procedures should come as a prelude to the full scale Federal Government HRMS implementation project due to start towards the end of this year", said Dr. Ali Bin Obood, the Deputy Director General of the Civil Service Bureau and Head of the HR Team. Dr. Bin Obood added that the prospective procedures would be in line with the recommendations of the comprehensive HR assessment conducted by eCompany, the UAE Federal Government partner for e-government implementation, and with the international e-government best practices for HR.

The subject assessment was conducted over the last two months and included a number of workshops and work sessions with officials from different Federal Government ministries. The assessment findings and recommendations will be publicised and shared with the Federal Government ministries and entities in a workshop towards the end of June 2005. "Adoption of the recommendations by the Federal Government ministries and entities is key to the success of overall initiative", noted Dr. Emir Mavani, the Federal e-Government Programme Director at MoFI. The specialised HR team also includes representatives from the Civil Service Bureau (CSB), the Ministry of Finance and Industry (MoFI), eCompany and a number of Federal Government ministries.

The HRMS project is one track of the overall e-transformation initiative that the UAE Federal Government has embarked on. While it is not expected to have the changes in HR procedures fully implemented before next year, the civil servants may start to feel the impact of these changes as soon as next October as a number of electronic services will start to be available as of then.

From AME Info, United Arab Emirates - June 13, 2005

MOFI Conducts Workshop on E-messaging

Abu Dhabi - E-messaging, a project of the e-government initiative launched by MOFI, which aims at providing unique identities for employees within Federal Government for official email communication, is currently linked to the e-portal, a single access channel to UAE Government services and information for residents, businesses, visitors and federal employees. As part of its efforts to introduce users to the numerous e-government services and their function, the Ministry of Finance and Industry (MOFI) yesterday held a workshop on e-messaging in cooperation with e-Company and federal government technical managers.

The workshop aims at educating users on the different functions and advantages of the e-messaging service. It is, in tandem with other e-government projects, aimed at upgrading the efficiency of government services, according to Maha Al-Aidarous, Deputy Director of the Information Systems Department at MOFI. The government's collaboration with e-Company in all e-government services will also ensure that the project is supported with the most secure and advanced software, Al-Aidarous said, praising the firm as "a pioneer is offering technical services."

E-messaging guarantees fast and efficient communication between government employees and different federal entities, thus ensuring prompt decision-making and problem solving when needed, Al-Aidarous noted. It will, as such, be linked to other e-government projects and services. The e-government steering committee met last week to follow up on the progress of implementation of the initiative, which, according to MOFI officials, is going according to plan. E-government is one of several initiatives undertaken by MOFI to upgrade and develop government services as well as promote public-private sector partnership.

From Middle East North Africa Financial Network, Middle East - 20 June 2005

Health Related Sites Dominate the Latest E-Government American Customer Satisfaction Index (ACSI)

The best of e-government is disproportionately coming from U.S. federal agencies that deal with health issues, according to the latest findings of the American Customer Satisfaction Index (ACSI) special report on federal government's online performance. Participation in the ACSI E-Government Index grew 19 percent this quarter for a total of 70 sites. And with an aggregate score of 72.6, the Index is showing a slight overall increase (one percent) in how users feel about their experience with e-government. The study's authors say that even slight improvements mean a lot in the fast-paced Internet environment where the public's standards are constantly rising.

ACSI scores are based on a 100-point scale and are calculated through a sophisticated formula based on surveys of site users that measure the impact of increasing customer satisfaction on future consumer behavior, such as likelihood to return to the website and recommend it to others. I n the latest ACSI, eight of the ten most highly-rated sites are run by the National Institutes of Health (NIH), and one of the two remaining ones is a non-NIH health-related site. "E-government sites face many challenges to increasing and even maintaining satisfaction scores, as citizens' standards rise due to positive private sector online experiences," said Dr. Claes Fornell, Director of the National Quality Research Center at the University of Michigan's Stephen M. Ross Business School. "Clearly, the health care sector is one where the public sector is exhibiting leadership."

"What's going on with government health sites is remarkable," said Larry Freed, an online satisfaction expert and CEO of ForeSee Results, which sponsors the federal e-government ACSI. "The NIH has embraced customer satisfaction as an enterprise-wide performance benchmark, evidence of their commitment to meeting citizens' needs and exceeding their expectations." The aggregate score for NIH sites in this benchmark outperforms the aggregate e-government score by 8 percent. Freed said that NIH's success is driven by several factors - but a key factor is that they have made user evaluation of their sites a primary metric. The NIH sites network to share best practices, but the site managers understand that a "one size fits all" approach won't work, especially given the varied audiences they serve.

"Our constituency is multifaceted, including patients and their families and friends, health professionals, scientist/researchers, advocates, and others," said Sue Feldman, Senior Program Analyst, Web Analytics for the National Cancer Institute, the highest scoring e-government portal and one of the sites in the top ten. "Segmenting the data allows us to evaluate how we can best serve these different audiences." Rounding out the top-ten is the Pueblo, Colorado consumer information site (www.pueblo.gsa.gov)- a site that does well not because it has fancy bells and whistles but because it is matched to its audiences' desire for simple, quick access to very specific informational materials.

Compared to private sector categories, e-government performance is mixed. E-Government portals and department main sites, with an aggregate score of 72.6, outperform private sector portals (71) by a small margin. In the information/news category, the private sector is in the lead by 3%, with an aggregate of 75 versus e-government's aggregate score of 72.3 this quarter. In e-commerce, a category where e-government is in its infancy, the private sector aggregate score of 78.6 is a full 10 percent above the e-government score of 71.3. Even with its very modest increase this quarter, the Index shows promise, according to Freed. In the aggregate, the Index showed slight improvements in the areas most critical to driving users' satisfaction and likelihood to continue to use the online channel.

Navigation and search, which tend to have the largest impact on federal site-users' satisfaction, have long been a relatively weak spot for most government sites - but Freed said the 1.1 percent improvement in navigation and 1.3 percent increase in search is a muted but encouraging sign. "These are not huge increases, but even a small improvement is a good sign," said Freed. "Navigation and search are absolutely critical factors to the success of almost all government websites -the things that users tend to think the sites do least well but that also matter most. For e-government to succeed on a broad scale, agencies really need to increase their focus on these areas and pick up the pace." "It's exciting that 14 new agencies are in the American Customer Satisfaction Index E-Government benchmark this quarter," said Anne Kelly, CEO/Director, Federal Consulting Group. "This shows that more federal agencies are putting their customers first."

From CRM Today - June 17, 2005

Spending Panel Reins in E-government Projects

The House Appropriations Committee has attached a legislative tether to e-government projects in several domestic agencies.
The panel's version of the appropriations bill for the State, Justice and Commerce departments, as well as related agencies, for fiscal 2005 requires the administration to seek Congress' approval to launch or squelch even minor projects in the e-government sphere. The spending committee's tool is section 605 of the bill that affects both funds appropriated by HR 2862 and previously appropriated money. The section requires the executive branch to seek congressional permission for starting, stopping, reorganizing, renaming or contracting out any e-government projects that fall under the three departments and several other agencies, including the Small Business Administration, the Federal Communications Commission and the Federal Trade Commission.

In report language accompanying the bill, the committee said it was concerned that some agencies have not been following Congress' reprogramming requirements, and that they have adequate authority already under existing financial transfer provisions. The committee also expressed dismay about SBA's Business Gateway project, and subjected it to the provisions of section 605 as well. The White House took exception to the committee's action, and responded with a statement of administration policy citing the benefits of e-government projects and asserting that several congressional and Government Accountability Office reports had validated their merits. The administration said it would continue to work to provide legislative support for the e-gov projects.

From GCN.com, by Wilsonn P. Dizard III - June 15, 2005

Study Finds Slowing E-gov Adoption

The Presidential e-Government Initiatives of 2000 have lost much of their steam because people still prefer to interact with federal agencies over the telephone, according to a report from Forrester Research Inc. of Cambridge, Mass. "Our research indicates that citizens contact the government predominantly for personal rather than business reasons, seeking answers to specific questions, expressing opinions or completing transactions," said Alan Webber, a consulting analyst. "Because of the personal nature of these interactions, they still rely on telephone and in-person contact and don't completely trust the Web. Even though most of these people use the Internet for other aspects of their daily lives, old habits die hard," Webber said in a press release.

Hurdles for implementation of e-government initiatives include constrained budgets and a change-resistant culture, which may become exacerbated as federal IT spending begins to decrease in the next couple of years, the report said. Government bureaucracy, extremely long project cycles and long overdue deadlines also have slowed adoption. Forrester defined three levels of e-government maturity: an "access era" to obtain information online; an "interaction era" to make small transactions and submit information online; and an "engagement era" to complete personalized, comprehensive transactions online. Most agencies currently are at the interaction era. Moving forward will require more disciplined management practices, an increase in the security of online environments, more complete enterprise architectures, greater capabilities for records and data and additional IT talent, according to the study.

From Washington Technology, DC, by Alice Lipowicz - June 13, 2005

EU Outlines i2010 Strategy / China to Devise Bird Flu Warning System

EU outlines i2010 strategy: The European Commission has proposed a plan for a major new e-government programme, as part of its new "i2010" strategy. The "i2010: European Information Society 2010" strategy sets out three key policy priorities for the EU over the next five years: the promotion of an inclusive Information Society, the creation of a single market for digital media services, and the encouragement of research and development in the area of ICT. Among the Commission's proposals are the adoption of a new action plan on e-government across the EU in 2006, the widespread rollout of broadband and the promotion of e-inclusion. The Commission also said it plans to launch "demonstrator projects" in 2007 to test the technological, legal and organisational issues involved in putting public services online. The Commission has requested that EU Member States include Information Society priorities in their own reform programmes for the next three years, which are due to be published in October this year.

EU wants to cut red tape: The European Commission has launched the "Tell us where to cut red tape" initiative, inviting businesses to submit online recommendations as to how bureaucracy can be reduced. "Reducing over-regulation and bureaucracy contributes to growth and jobs. Unnecessary rules and red tape stand in the way of sustainable growth, deter business investment or hinder job creation," the Commission said. "This is why cutting red tape on all levels is an integral part of the European Commission's 'Partnership for Jobs and Growth.'" The consultation is open from 1 June 2005 via the Commission's Your Voice in Europe website.

Wales aims to bridge digital divide: The European Commission has approved UK state aid for a project to bridge the "digital divide" in Wales. The Welsh Assembly has proposed measures to bring broadband communications to areas of Wales where such services are not available or not considered commercially viable by service providers. These so-called blackspots include 35 exchanges not included in BT's roll-out programme, as well as communities that are disadvantaged for technological or topological reasons. The Regional Innovative Broadband Support project aims to correct this digital divide by awarding a grant to a service provider, which will be selected via tender, to provide first-generation broadband coverage to underserved areas of the country. Apart from government funding, financing for the project will be supplied by EU structural funds, and the chosen service provider will fund 50 percent of the capital costs of the project.

Egypt signs software deal with Oracle: The Egyptian government has done a deal with Oracle for the provision of software to link up 5,000 financial units throughout the country. The Ministry of Communications and Information Technology, the Ministry of State for Administrative Development and the Ministry of Finance have licensed the Oracle Database, Oracle Application Server and Oracle Internet Developer Suite as the backbone for a Government Resource Planning (GRP) system. "A crucial element of Egypt's e-government project is the automation and centralisation of the country's federal accounting procedures, which will ensure greater efficiency and transparency in our financials," said Dr Ashraf Abdel Wahab, senior advisor to the Minister of State for Administrative Development. The software suite will enable ministries around the country to create data warehouses and perform data mining functions that are key to federal accounting processes.

Dubai prisoners offered IT training: The municipal government of Dubai in the United Arab Emirates is launching an IT programme for prison inmates. The training programme, which will be run by the Dubai Police Department in association with Microsoft, is aimed at helping prisoners to find employment upon their release. In the first phase of the programme, the police will be given IT training, before passing on their knowledge to prisoners. The "Unlimited Potential Curriculum" will be taught for five hours a day over a period of two months and will include subjects such as digital media, internet use, web design and database skills. "The technology training programme is a reflection of the Government's commitment to break down the digital divide and ensure that the benefits of technology reach as wide a section of the population as possible," said Salem Al Shair, e-services director, Dubai eGovernment.

China to devise bird flu warning system: The Chinese government is planning to establish an early warning system to detect and prevent the spread of bird flu, according to a report in the Shanghai Daily newspaper. More than 1,000 migratory birds have died from avian flu in the northwest region of the country, and a number of people have been killed by the virus in Vietnam, Thailand and Cambodia. The Chinese Academy of Sciences is developing the warning system, which will feature a nationwide virus database, epidemic analysis and information-sharing with foreign experts, and regular information releases to the public. "Bird flu is more difficult to control compared with SARS because it is hard to detect. Its human symptoms are similar to a bad cold," said Ma Juncai, assistant director of the Chinese Academy's Institute of Microbiology. "So it is urgent to establish a warning system in China." Ma said the system would issue warnings of epidemics and help scientists to find ways to stamp out the virus.

From ElectricNews.net, Ireland, by Sylvia Leatham - June 9, 2005

Stanca, ICT Cooperation for E-Government

Italy starts its cooperation with China also in the technological innovation field starting from 'exporting' the digital administration code to pursue e-Government and industrial cooperation. This is one of the results of the meeting that Chen Dawei, Deputy Minister for the Computerisation of the People's Republic of China, held with Italian Innovation and Technology Minister Lucio Stanca, during which several issues were spoken of, also because many common issues were raised on modernisation, especially of Public Administration. "As well as the attention placed on the digital administration code, on the basis of the certain normative of the e-Government and one of the first documents of its kind in the world, Dawei showed interest for the various implementations, including electronic charters, digital signatures and certified e-mail, and the method of the 'shared vision' adopted by our country, i.e. the involvement of local administrations without taxes from higher levels, that is well suited to such a vast and decentralised country which has thousands of local administrations," said Stanca specifying that "the prospects of Italian-Chinese cooperation involve technological industries too. Both of us are very interested in cooperating in the ICT sector, a strategic sector for both parties." Chen Dawei said: "We will surely reap the benefits of the seeds we have sown today. While Minister Stanca is already half-way in the e-Government process, we are only at the beginning. But thanks to this cooperation we hope we can soon reach the Italian position. Furthermore in China there is need of companies that produce good technological products, also to support e-Government."

From Agenzia Giornalistica Italia, Italy - June 16, 2005

Top Six Spenders of the Budget Billions

Kenya's biggest spending ministers spoke out yesterday - and revealed they needed yet more cash from the public purse.
Some of the ministers given the lion's share of the money say it is still not enough to fulfil all their plans for the country. According to this year's Budget, only six out of 31 ministries - plus the Department of Defence - will control more than half of the Sh508 billion shared out by Finance minister David Mwiraria last Wednesday. Top of the high rollers is Prof George Saitoti of Education, followed by the Office of the President, the ministries of Health, Roads and Public Works, then the Department of Defence, and the Treasury, and the ministry of Transport.

Their allocations totalling Sh252 billion came under scrutiny when debate on this year's Budget speech entered its second day yesterday. Prof Saitoti was given Sh96.6 billion to spend - more than twice the amount of the next biggest spenders - with the priority of seeing through the success of free primary education. He told the Nation: "We appreciate what we got, though it may not be sufficient to cover all our needs." Most of the money will finance the free primary school programme and meet teachers' salaries. "The Government is committed to providing free primary education and we want to see more resources channelled in it," he said. Nonetheless, Prof Saitoti said, although much of the cash will also go to teachers' salaries there will be constraint in employment. "We have received numerous requests to recruit more teachers but this could be hampered and we can understand the constraints of Treasury," he said. He added the ministry had asked for Sh1 billion to meet the cost of bursaries but was given only Sh800 million.

The allocation for the Office of the President was more than Sh35 billion, still less than half of the amount given to education. The bulk of it is for salaries, mainly the police, and for contingencies like disaster management. The ministers who will control it include Mr Njenga Karume (Special Programmes), Mr William ole Ntimama (Public Service) and Mr John Michuki (Internal Security and Provincial Administration). Mr Ntimama said the Sh2.778 billion given for public service would be used to meet the pay rises for civil servants. It will include paying those who retire and for the Government's retrenchment scheme. "It will be voluntary retirement and not forced," he said. However, the minister said there will not be sufficient funds to roll out the public sector reform programme, including paying for incentives under the performance contract scheme.

Health minister Mrs Charity Ngilu, third on the list with more than Sh30 billion, will use most of the cash to pay salaries and buy drugs for public hospitals. And Roads and Public Works minister Raila Odinga, who comes fourth with an allocation of more than Sh28 billion, said he wanted to complete the rebuilding of 34 major roads which were begun last year. Although there was an increase in his ministry's budget the minister said he had asked for more. "It is enough to complete the reconstruction of damaged roads but we have a programme for new roads which we shall subsequently embark on," he explained. The three year programme for new roads will include tarmacking new roads to arid and semi-arid lands. The Department of Defence was given more than Sh26 billion, of which Sh198 million was earmarked for paying the salaries of Kenya's fighting men and women. DoD is expected to spend the rest of the money on maintaining and buying its military hardware. Mr Mwiraria, the Finance minister who presented the Budget, has given his own Treasury Sh25 billion, most of which will go on development projects mainly in the countryside.

The largest part of the cash, Sh7.2 billion, is for the MPs' Constituency Development Fund; a further Sh2.1 billion will pay the wages bill; and an additional Sh2 billion was set aside for contingencies. Transport minister Dr Chris Murungaru received more than Sh11 billion, the seventh in order of priority. That will be good news for retired Kenya Railways Corporation workers who have been allocated Sh4 billion to pay for their pending pensions and retirement benefits. A further Sh1.4 billion has bee put aside for development projects.At the other end of the scale, the lowest allocation was given to Information and Communications minister Raphael Tuju - just Sh783 million - while Mr Ochillo Ayacko, the minister for Gender and Sports, received Sh2 billion. A former chairman of the House Public Accounts Committee, Mr Omingo Magara, yesterday welcomed the order in which Mr Mwiraria had set out his priorities but raised the issue of use of the funds. He pointed out the history of the Office of the President had been to use funds for items that were irrelevant for the maintanance of security. "Yes, education is prime and it should be number one priority, but the minister should have also looked elsewhere and given more for trade and industry," he said.

Trade and Industry Minister Dr Mukhisa Kituyi has been allocated only Sh2.5 billion for development and recurrent expenses; one of the lowest amounts. Mr Magara said it was not enough to ensure lobbying in the international arena where the Government was represented by only two people, compared to the huge delegations sent from countries that could do business with Kenya. The chairman of the House Finance Committee, Mr Mutahi Kagwe, said Mr Mwiraria had no choice but to give the biggest amount to education. "Even if I was the one prioritising, I would not exchange anything for education," he said. And for Office of the President, he said the money should be used to equip the police to enhance security. "I would not have put more money for external defence, but for internal security," he said. He suggested that if the minister received donor money, it should be invested in agriculture and tourism to create more jobs. Mr Kagwe also suggested that the minister should have helped accountability by listing what had been accomplished with the money distributed from his previous Budget.

From AllAfrica.com, Africa, by Emman Omari of The Nation, Nairobi - June 15, 2005

$127bn Pension Fund Available in 14 Countries

African leaders con-vened yesterday in Abuja for meeting of the African Peer Review Mechanism (APRM), under the auspices of the New Partnership for African Development (NEPAD). The meeting which assessed governance in Ghana and Rwanda under the peer review mechanism revealed that a total of $127 billion pension fund which could be harnessed for the funding of high priority projects of NEPAD were available in 14 African countries. The leaders agreed on a phased removal of subsidies in agricultural produce, accelerate the implementation of NEPAD partnership with the G8 in the establishment of a development fund of $20 billion by the end of 2005. They further committed themselves to increase budgetary support for the peace and security programmes of the AU. They also noted that Ghana's and Rwanda's ability to adequately mobilize human resources is being hampered by gender inequality,

According to a report presented by the chair of the APRM Panel, Marie-Angelique Savanne of Cameroon, the conference discussed issues of democracy and political governance; economic governance and management. Ghana's effort towards fostering peace and unity within three elections and transfer of government from individual to individual and from party to another was commended by the panel. "Ghana could rightly be described as an oasis of peace and tranquility in a sub region perpetually in turmoil. Since the return to democratic rule in 1992, Ghana has had success in consolidating and strengthening democracy. Ghana has had three successful post-transition competitive multi party elections. The result has been the democratic and orderly transfer of power from one party to another and from one president to another", the report stated. Also noted was the establishment of the Annual Governance Forum, the Peoples Assembly and the National Economic Dialogue which has created more avenues for national dialogue.

The report called for the ratification of outstanding standards and codes in Ghana as outlined by the APRM , noting potential dispute areas in the country especially land disputes, chieftaincy disputes and political disputes relating to elections. Other areas of concern in the report was the effectiveness of the separation of powers, the size of its 88 member executive cabinet; presence of the ministry of parliamentary affairs, the blurred line between the executive and legislature and the inability of the constitution to specify a maximum number of judges to serve on the Supreme Court. It called for an affirmative action to include more women in government and decision making process of the country, also asking the country to improve its public service delivery mechanism. Noting the efforts at forging regional integration, the African leaders however, said Ghana's economy is relatively weak and highly vulnerable to external shocks, especially the vagaries of world trade and sub-regional political instability.

On Rwanda, the panel said it is yet to completely meet up with requirement for reporting on its works although it ratified all the codes and standards established for good governance. The panel recommended that Rwanda harmonises its domestic laws to international legal norms and standards; deepen national reconciliation efforts and encourage a policy of inclusiveness and win the confidence of its citizens. The panel recognised Rwanda's record of having the highest proportion of women in parliament (49%) and 36% in the executive cabinet, the report noted. It also recommended the continuation of public finance reforms, improve capacity to review economic document and policy, broaden tax base and increase the capacity of the Rwandan Parliament to review economic document. Further deliberations on the report will open at the next meeting during which Ghana and Rwanda will address the meeting on what they intend to do with the report's observations, disclosed Obasanjo who is also chairman of the AU. Leaders present included the presidents of South Africa (Thabo Mbeki), Rwanda (Paul Kagame), Sierra Leone (Tejan Kabba), Ghana (John Kuffour) and Algeria, (Abdoulahi Bouteflika). Also in attendance were the prime minister of Mozambique and ministers from Egypt, Benin Republic, Angola, Kenya and Zambia.

From AllAfrica.com, Africa, by Elkanah Chawai of Daily Trust, Abuja - June 20, 2005

Millions Lost by Solomon Islands Government

An investigation into the Solomon Islands government financial system has found $US millions of dollars has been lost through poor management, corruption and fraud. The auditor advisor and deputy-auditor general, Richard Woodgate says the investigation followed the arrival of the Regional Assistance Mission (RAMSI) in Solomon Islands in 2003. He says other findings included widespread non compliance with the Public Finance and Audit Act and serious breakdowns in management and accounting systems. Mr Woodgate says RAMSI would like to see the reinstatement of the Auditor General Office as a self sustaining and effective supreme audit office.

The Solomons suffered civil war from 1998 until in July 2003 a Regional Assistance Mission to Solomon Islands (RAMSI) force, made up of 2,200 Australian, New Zealand, Fijian, Tongan and Papua New Guinean forces, landed to restore order. A multi-national Participating Police Force (PPF) is also present. The Solomon Islands, 2,575 kilometres east of Australia, has 494,786 people living on dozens of islands with a total land area of 27,540 square kilometres.

From Radio Australia, Australia, June 3, 2005

Revenue Short by $63.5m in 2003

Government departments failed to collect $63,555,206 in revenue in 2003. In tabling the Public Accounts Committee report, chairman Poseci Bune said the amount could have been collected had proper budgetary planning was followed. He said ministries and departments should redesign their revenue recovery measures such as instituting timely reminders, time to pay arrangements and warning letters for non-complying debtors. Mr Bune said decentralising the recovery of arrears to divisional and district officers would help in debt recovery.

He said another measure would be categorising debtors to identify revenue due from ministries and departments, statutory authorities, business organisations, non-profit organisations, educational institutions and individuals. "The Ministry of Finance told the committee that while it was doing its best to improve its budget preparation process, in terms of revenue collection and expenditure controls, there is a need to urgently review the cadre of accountants deployed in the ministries and departments to ensure the right people are in place".

The committee noted a number of ministries and departments owed significant amounts of VAT in 2003. The Education Ministry owed $16,953,628. The Finance Ministry said it was aware some ministries had been dipping into some of their VAT allocations during the year despite strict guidelines. It said FIRCA implemented a new IT system and was thus unable to achieve its expected target. Mr Bune said the committee noted with concern the frequency of seeking additional money.

From Fiji Times, Fiji, June 3, 2005

FBCCI on Proposed Budget: It Discourages Taxpayers Inspires Corruption

Federation of Bangladesh Chamber of Commerce and Industry President Abdul Awal Mintoo, while expressing an instant reaction to the press about the proposed budget, mildly criticised the budgetary provision of extending the period of whitening black money. "It discourages taxpayers and inspires corruption," he said adding that it might have an adverse impact on society. Tax paying tendency declines with rise in the tax rate, he added. The import duties on industrial raw materials should have been reduced to 5 per cent from the present level of 7.5 per cent to enhance export competitiveness, FBCCI President said. "With the existing rates of duties on imported raw materials and the problems like inefficient infrastructure of ports and roads, we would not be able to compete in the global market," he said.

"One can say it's a pro-election budget," said the apex trade body's leader. Investment in rural infrastructure is important, but discriminatory allocation and disbursement of resource cannot be encouraged, he added. The proposed budget does not contain measures that may make positive impact on growth of local industries as well as their export competitiveness, he pointed out. Mintoo said duties and taxes in some cases like motor vehicles have been increased, but the measure would affect only a few. Dhaka Chamber of Commerce and Industry (DCCI) President Syeeful Islam appreciated the initiative to provide 52 per cent of the total ADP from own sources. "It is a matter of pride for the nation," he said. There seemed an effort to make a balance between the industrial growth and rural development, he said. Referring to proposed tax holiday sectors, he said it was a positive sign. The raise in the corporate tax from 37 per cent to 40 per cent would have an adverse impact on industrialization, DCCI president said.

From The New Nation, Bangladesh, June 10, 2005

Tax Plan Has Potential Loopholes

Proposal: If the government fails to include income earned overseas in its tax plan, the wealthy individuals it is targeting will simply move funds out of the country. Finally, the government has decided to pull in high-income earners with a minimum tax scheme that has been in the works for decades, but its latest effort may prove ineffective, an academic said yesterday. "There will be a loophole in the proposed tax plan if the authorities fail to tax high-income individuals for their overseas income," Su Jain-rong, director of the Department of Public Finance at National Taipei University, said in a phone interview yesterday. Su said the Ministry of Finance should include levies on the overseas income in the proposed minimum-tax plan for high-income individuals, to prevent rich people from moving their assets abroad to avoid taxes. Wealthy people can keep their overseas earnings from flowing into the nation's territory by establishing paper companies abroad or moving productive assets to foreign countries to dodge the taxes, he added.

According to local newspapers, Minister of Finance Lin Chuan failed to obtain support from the Cabinet for his plan to start taxing individuals' overseas income because some were concerned that the cost of taxing overseas income may outweigh the potential gains. But Su disagreed, saying the cost of taxing overseas income is lower than the tax revenue the government can garner, since the authority plans to impose the minimum-tax scheme on high-income individuals only, which form a minority of the nation's population. The ministry on Monday unveiled the details of its minimum-tax proposal for individuals, including plans to levy a minimum tax rate of 17.5 percent and 20 percent on individuals who enjoy annual gross income above NT$8 million and NT$10 million, respectively. Under the proposal, it is estimated that only around 1,000 high-income individuals would be affected. While it excluded overseas income from the plan, the ministry added four other items: non-cash donations made to public institutions, insurance compensation, gains from employee stock bonuses and capital gains from trading unlisted stocks.

Amid growing concern, Lin said in an interview with the cable station USTV yesterday that the decision on whether to tax overseas income will not be affirmed until July 10, when the final version of the proposal comes out. Apart from minimum individual income tax, the ministry is also proposing a minimum-tax scheme for companies whose annual gross income exceeds NT$2 million, or with annual revenue above NT$30 million. The ministry provided three tax rates for the minimum corporate tax scheme, ranging from 7.5 percent, 10 percent to 12.5 percent. The ministry estimated it would garner extra tax revenue of no more than NT$30 billion annually, while around 13,500 company taxpayers would be affected, at the most, after carrying out the minimum corporate tax scheme.

From Taipei Times, Taiwan, by Amber Chung, June 15, 2005

Government Offers More Autonomy to PSBs

"We will never privatise the banks, we want them to grow in size." The Finance Minister, Mr P. Chidambaram, has said that the Government is willing to give more autonomy to public sector banks, even while making it clear that this will also entail more accountability for such banks. "We are willing to give banks more autonomy. But with autonomy, hand-in-hand, will go more accountability. More autonomy would mean more accountability, more responsibility and willingness to take on greater responsibility in a growing economy," Mr Chidambaram said after launching through a mouse click the 201 inter-connected ATMs of Bank of Baroda (BoB) here on Wednesday. Mr Chidambaram pointed out that two weeks ago, he told PSU banks' chairmen that they were not asking him for more autonomy. He had then mentioned that the banks had not come up with any "bill of demands for autonomy." The Finance Minister said that the chairmen of the PSU banks had promised to get back on this issue by the month-end.

While ruling out privatisation of PSU banks, Mr Chidambaram underscored the need for all PSU banks to become "truly national banks." Describing BoB as perhaps the largest non-south Indian bank to have the largest presence in the South, Mr Chidambaram said that he had advised the BoB Chairman to continue to ensure that the bank had an all-India presence. He said that concepts such as the need for truly national banks were getting wider acceptance and felt that with greater debate and discussion, other ideas such as convergence and consolidation would gain acceptance. "There needbe no fear at all among officers, staff or anyone for that matter that we will privatise our public sector banks. We will never do that. The UPA Government is committed to keeping the public sector banks in the public sector. But we want efficient, large and world-scale banks," he added.

The Finance Minister pointed out that PSU banks would have to grow in size, scale up and raise capital if they were to finance the growing foreign trade and other requirements from sectors such as agriculture, small and medium enterprises (SMEs), self-help groups and students. "Even for the other requirements (SMEs and self-help groups and students), bank credit has to expand very rapidly. If bank credit is to expand rapidly, it is axiomatic that bank capital has to expand rapidly. "If bank capital does not expand equally and rapidly, then how can credit expand rapidly? That is the reason I am arguing with bankers and others that banks must grow in size and scale and raise capital," he said.

From Hindu Business Line, India - June 16, 2005

IMF Executive Board Reviews the Democratic Republic of Timor-Leste's Poverty Red

The Executive Board of the International Monetary Fund (IMF) reviewed on June 15, 2005 the Democratic Republic of Timor-Leste's National Development Plan (NDP) and the Staff Advisory Note for the NDP, which was prepared jointly by the staff of the IMF and the World Bank. At the conclusion of the Board discussion, Takatoshi Kato, Deputy Managing Director and Acting Chair, stated:

"Timor-Leste's National Development Plan (NDP) and implementation documents (the Road Map and the Sector Investment Programs (SIPs)) set out a comprehensive long-term vision and strategy for economic growth and poverty reduction, and reflect nation-wide consultations with a broad range of stakeholders. The NDP's overriding objectives will be supported by sector strategies and a macroeconomic and medium-term expenditure framework to guide policy development and implementation. The strategy rests on four pillars: creation of opportunities for economic participation; delivery of basic social services; provision of security of person and property; and empowerment of citizens and communities. The private sector is identified as the driving force for growth, with the government as the facilitator, including through the execution of well-focused public investment programs aimed at basic service delivery and the establishment of essential infrastructure.

"Since regaining independence in 2002, Timor-Leste has made commendable progress by maintaining peace and stability, building state institutions, and improving basic service delivery. Significant challenges remain, however, in addressing weak capacity, accelerating growth and employment creation in the non-oil economy, and ensuring the sound management of the country's oil/gas resources. The authorities' priorities therefore appropriately focus on further strengthening institutional capacity to address difficulties in budget execution, particularly for capital projects; measures to complete the legal and regulatory framework needed to stimulate private investment and job creation; and the enactment of the system to manage Timor-Leste's new oil/gas wealth responsibly and transparently. "Continued assistance from and close coordination with development partners remain critical to support strengthening the government's capacity to design, manage, implement and monitor Timor-Leste's policies and budgets and to ensure the alignment of external assistance with national priorities. In particular, support will be essential to develop a comprehensive program for strengthening public finance management and ensure proper budget execution in support of NDP objectives," Mr. Kato said.

From Harold Doan and Associates (press release), CA - June 20, 2005

Government to Issue Bonds Worth CZK 33 Billion in Q3

The Czech government will issue bonds worth CZK 33 billion in the third quarter of this year, the Finance Ministry said today. The state will also issue short-term treasury bills worth CZK 75 billion, of which CZK 45 billion will be put on the block. The crown bonds, issued to finance the state budget deficit, mature in three to 15 years. One bond worth CZK 7 billion will be issued within a reopening. The state budget gap is projected at CZK 83.6 billion for this year. The total volume of bonds issued this year should amount to CZK 110 billion, with the ceiling set at CZK 120 billion.

The Finance Ministry also issued 15-year eurobonds worth EUR 1 billion in March, which brings the total sum to about CZK 150 billion. The ministry has said it may come up with another issue of eurobonds this year. The volume of treasury bill issues scheduled for this year is CZK 202 billion, with a deviation of 10 percent. Treasury bills are used to tackle a short-term lack of money. Czech government debt has been growing sharply in recent years. It has more than trebled since 1998.

The public sector debt has already exceeded CZK 1 trillion and has been growing. Costs of interest on the debt have already exceeded CZK 30 billion a year. Rules for euro adoption, scheduled for 2010 by the government, set the ceiling on public debt at 60 percent of GDP. The Czech Republic should meet this criterion easily. But the country must also slash its public finance deficits below 3 percent of GDP. It plans to do so by 2008.

From Prague Daily Monitor, Czech Republic - June 1, 2005

EU Warned of Failure on Budget

Brussels- European Union leaders warned that prospects were gloomy for a deal on the 25-nation bloc's long-term budget at a summit starting on Thursday after a double blow to the EU constitution rattled Europe's self-confidence. Luxembourg Prime Minister Jean-Claude Juncker, who will chair the two-day meeting, said he was almost certain he would be unable to broker a deal on the 2007-2013 budget because of wide differences over who should pay how much. The president of the executive European Commission, Jose Manuel Barroso, said unless the summit resolved the budget problem and found a way forward on the constitution, Europe would "sink into a permanent crisis and paralysis." Financial deadlock would hold back urgently needed public investment in the poorer new member states in eastern Europe, on top of the political uncertainty wrought by the French and Dutch voters' rejection of the constitution.

"I am pretty sure we won't get the financial perspectives through at this summit," Juncker told the European Parliament, hours before he was to circulate a compromise proposal on the budget to EU leaders. He said member states were close to agreement on the spending side but wide differences over Britain's annual rebate and how much other major net contributors should pay into EU coffers made a deal this week improbable. But some diplomats said the wily veteran of EU negotiations was deliberately sounding gloomy to lower expectations and raise pressure on his peers, and he had not really concluded he has no hope of clinching an accord. Barroso said leaders should agree a pause in ratifying the constitution, meant to make an enlarged EU work more effectively with streamlined decision-making, rather than risk more defeats. His native Portugal became the latest country to say it was thinking of calling off a planned referendum with opinion polls showing a surge in support for the "No" camp.

The German president also said he would not sign off and complete his country's ratification of the treaty until a court ruled on whether it conforms with Germany's own constitution. Italian Prime Minister Silvio Berluconi added his voice to the chorus of gloom, telling reporters: "I am pessimistic. I don't think a deal will be found at that meeting because there is too much distance between where we are at the moment and what each individual country wants to obtain." Barroso said the referendums in France and the Netherlands had plunged the EU into doubt. "We must dissipate this doubt and give back confidence to European citizens," he said, arguing the best way was to boost growth and employment through economic reform. However, many analysts believe the referendum defeats make it less likely in the short term that the EU will be able to agree on the painful reforms he advocates to rekindle growth and make Europe more competitive in a globalized economy.

The French "No" vote was largely driven by hostility to economic liberalisation, symbolised by a draft EU law intended to open up the services sector to cross-border competition. The budget battle has pitted perennial rivals for European leadership France and Britain against each other, but Juncker said there were also problems with other big net contributors to the EU budget - Germany, the Netherlands and Sweden. Britain has said it will only accept a review of its widely criticized refund from Brussels, worth 5.1 billion euros ($6.18 billion) this year, if EU farm subsidies that mainly benefit France are also reduced. But President Jacques Chirac has ruled out any concession on farm payments, which were pegged until 2013 in a deal accepted by Britain, and new French Prime Minister Dominique de Villepin launched a fresh attack on the British rebate on Wednesday.

"Everyone also sees that nothing can justify today continuing this exception in a Europe where every country has to pay its share of the cost of enlargement," he told parliament. Juncker backed Chirac in saying that agricultural spending could not be called into question now. But Barroso suggested a possible way out: the extra cost of farm aid to Bulgaria and Romania, due to join in 2007, should be met under the agreed ceiling, and that all spending should be reviewed again in 2008 - a typical EU solution.

The EU presidency has proposed freezing the British rebate at its pre-enlargement level of 4.6 billion euros a year. London has called that "unacceptable" saying it would lose 25 to 30 billion euros over the seven-year period. Dutch Prime Minister Jan Peter Balkenende told parliament in The Hague he would "play a hard game" to reduce the Dutch EU budget contribution - the biggest per capita in the bloc. The big contributors who want to cap EU spending argue there is no urgency to reach a deal this week, since pressure on the net recipients will grow as the start of the next budget period approaches. The Commission says failure to agree now would throw EU financial planning into disarray.

From Reuters, by Paul Taylor, European Affairs Editor - June 15, 2005

Finance Minister Presents Outline of 2006 Budget Projections

According to the assumptions of the state budget for 2006, the deficit should amount to between zl.28-34 billion, economic growth to 4%, while inflation will hover around 1.5%. "This year for the first time, both revenues, expenditures and deficit was provided in brackets, rather than specified amounts" said Finance Minister Miroslaw Gronicki. According to the projections, revenues should stand at zl.184-189 billion, while expenditures at zl.216-222 billion. At the same time, the government expects higher internal demand, especially consumption demand, and thus the current account deficit should stand at 2% of GDP. "Average wages will increase by 3.5%, while those in the public sector by 1.5%," said Gronicki. Unemployment is expected to fall to 17% from 18% in 2004. "Despite lower GDP growth and lower inflation, the budget is doing fine in 2005," said Gronicki.

From Warsaw Business Journal, Poland - June 15, 2005

World Bank Helps Moldova Better Manage Public Finance and Continues It

The World Bank today approved a US$8.548 million Public Financial Management Project (PFM), as well as a US$3.0 million Additional Credit to the First Cadastre Project for the Republic of Moldova. Both the PFM Project and Additional Credit would be interest free IDA Credits repayable in 40 years, including a grace period of 10 years. The PFM Project will assist the Government in introducing modern and effective methods of management of public finances through a more strategic resource allocation supporting the achievement of priorities of the Moldova Economic Growth and Poverty Reduction Strategy; more effective budget execution and controls, allowing public managers to have more control and responsibility for the use of allocated budget resources; and use of an IT system that will provide speed, reliability, accuracy of transaction records, and reduction of fraud. It will also support better skilled personnel in managing government programs and budgets, as well as a system of internal auditing which will help managers to better use resources to achieve organizational goals. In addition, the project will facilitate the development of a system of civil service training and will improve management skills of the current managers.

"The PFM Project will help improve budget transparency and its international comparability, because it will introduce a new budget classification, and reporting aligned with the international Government Financial Statistics system," said Svetlana Proskurovska, the World Bank's Task Manager of the Project. "The project will generally enhance the role of the budget as an instrument of implementing government policies and will enhance accountability of the public administration for effective use of public resources in attaining policy goals," she added. The total cost of the PFM Project is US$ 15.331 million. In addition to the World Bank Credit, the project will also be financed from a Government contribution as well as donor financing in the form of grants from the Government of the Netherlands and the Swedish International Development Agency (SIDA). The Project implementation period is 4 years,- from January 2006 to December 2009.

The Additional Credit for the First Cadastre Project would provide financing for additional surveying of real estate in Moldova. The project will increase coverage and access to real estate registration throughout the country and update the existing information system, consolidate data from all territorial cadastral offices and improve information flow. The USD15.9 million First Cadastre Project for Moldova was approved by the Bank in April 1998 and became effective in March 1999. The Project's primary objective is to develop and implement a national unified real estate registration program for urban and rural land, and thereby to establish a system of clear and enforceable ownership rights so as to promote the privatization of land and the development of real estate markets in Moldova. Under the current Additional Credit the First Cadastre Project will be fully implemented by June 30, 2007. Since Moldova joined the World Bank in 1992, Bank commitments to the country total approximately US$572 million for 24 operations.

From Harold Doan and Associates (press release), CA - June 17, 2005

France Trims Growth, Worries about Cost of Debt

France cut its 2005 growth target to 2.0 percent, and Finance Minister Thierry Breton said that the country was living beyond its means on debt. The minister, presenting the economic policy of the new government created after the electorate rejected the European Constitution, said Tuesday that the economy was heading for growth this year of about 2.0 percent instead of the 2.0-2.5 percent targeted earlier. And, in what might be seen as a change in emphasis from the argument that growth creates jobs, he said that work created growth and that people must work more throughout their lives to increase growth and finance their social services.

France is judged to have among the shortest annual working hours among industrialised countries, although the current centre-right government has relaxed slightly the constraints of a 35-hour working week introduced by its Socialist predecessor as a measure against unemployment. The government, re-drawn after the "no" in the referendum, and reeling from the setback and from signals that the electorate is unhappy with efforts to introduce structural reforms to the economy, has said that its policy will be aimed mainly at tackling persistently high unemployment. But Breton also told a press conference that France was standing by its target for the public deficit to be 3.0 percent of output in 2005, and he warned that the cost of paying interest on the national debt next year would soak up the equivalent to all the money collected through income tax. Overspending, he said, was squeezing the economy.

Meanwhile the governor of the Bank of France, Christian Noyer, also a governor of the European central Bank, said in the French bank's annual report: "It is crucial that, in conformity with the commitments that it has taken, and under the rules of the stability pact, that the government enact measures enabling the public deficit to come back under 3.0 percent of gross domestic product in 2005." France is in breach of EU and eurozone rules restricting annual public deficits to a maximum of 3.0 percent of output. In 2004 the French public deficit amounted to 3.6 percent of output, the latest data from the French statistics institute INSEE showed. Breton said that the government had revised down its target for growth this year to "about 2.0 percent" because of the effects of the rise of oil prices at the beginning of the year and weak economic figures in the first quarter. But the weak spot for growth had passed, he said, adding that the rate of growth of gross domestic product should return to 2.0-2.5 percent from the second half of 2005.

The minister declared that "France is living above its means," noting in particular a heavy burden of debt which he said would amount to 1,100 billion euros (1,342 billion dollars) next year. He said: "We must have the courage to say quite simply that today France is living above its means. "French people must be told this." He continued: "The cost of the debt is taking all room for manoeuvre in our economy." But he also said that buying power of French households would rise by at least 2.0 percent this year. French people had to "work more, throughout their lives" in order to create growth, he said. France had to make an effort to achieve growth of more than 3.0 percent at least," but was not yet there. The number of people aged 15 to 60 who were available for work would begin to fall for the first time ever. But growth in an economy based on services depended on an increase in the number of people in work. This was why the government was reflecting on the type of immigration that was needed. Only growth "can enable our social model to continue in existence."

From China Daily, China - June 21, 2005

Treasury Plans Budget Crackdown on Public Sector Pay and Conditions

Finance Ministry Accountant General Yaron Zelekha has instructed the financial comptrollers of all government ministries to launch probably the toughest and most intensive crackdown on public sector pay in the history of the state. The task will begin in earnest next month. Some 300,000 monthly pay slips (including public sector pensioners) will be examined with the ultimate aim of saving - where discrepancies are discovered - millions of shekels each year to the public purse. Underlying the drive is an assumption that many in the public sector are enjoying pay and bonuses that were neither due nor legal, having slipped through the net of supervision for decades.

Each ministry will be expected to examine the pay slips according to its own system, as each financial comptroller sees fit. For example, if they believe in one ministry that drivers have been incorrectly receiving overtime pay, then that comptroller may elect to thoroughly examine the pay slips of all the drivers in the ministry's employ. Each financial comptroller will be expected to cover such matters as automatic promotions, veterans' bonuses, pay additions for university degrees, expenses, overtime, and extras for car or travel expenses. The checks will include confirming the submission of receipts. Not all the probes may be in the employer's favor. Zelekha's instructions also require a thorough examination of an employee's full use of tax breaks on studies, for example. If a public sector employee has not used up all the tax benefits to which he is entitled, he will be recompensed according to the law and collective work agreements.

In the build-up to the new operation, all financial comptrollers, their deputies and senior staffers - some 200-300 people in all - will begin courses in the next two weeks. This is the first time the Finance Ministry has planned such a comprehensive budgetary crackdown. Zelekha said the spending on wages and supplementary payments in the public sector has grown and developed unchecked and unsupervised over the years. He noted that this expenditure moved only in one direction, that it only grew, it never fell, and that this had heavy actuarial implications. In total, the accountant general said, the sum of all wages and supplementary payments in the public sector reaches NIS 60 billion a year, constituting 30 percent of the entire state budget (excluding debt payments). Ilan Levene, deputy accountant general of the treasury in charge of pay and personnel matters, and who is responsible for the crackdown, said the three-month operation is expected to save the state hundreds of millions of shekels each year.

From Ha'aretz, Israel, by Moti Bassok - June 15, 2005

United States: Leading Economist Warns of US Bubble Economy

Bangkok – The economic bubble in the United States is likely to burst next year as a result of inflated property prices and the country's persistent current account deficits, according to a leading economist. The US economy is experiencing difficulties in many areas, the President of Phatra Securities Plc, Supavut Saichue, told a seminar in Bangkok on the US economist Paul Krugman's analysis. Apart from the chronic current account deficits, the US is facing a marked decline in direct investment and investment in the stock investment, he said. The Asian central banks, especially the Bank of China, have invested more than US$500 billion in US bonds.

The US property sector is in the throws of a bubble growth cycle, which could burst at any time and affect the economy, he said. "Many analysts predict that US bubble growth will burst in 2006. Personally, I agree with this projection," he said. Two issues need to be closely monitored, he said. The first is who will be the new Federal Reserve (FED) chairman and whether he can ease the country's huge current account deficit of more than US$800 billion. The second is China's response to the US pressure to adjust the value of the yuan. "Despite the fact that China has huge investments in US bonds, serious problems may occur if there is change in the relative value between the renminbi and the dollar," he said. The US government is likely to significantly revamp the economy soon, he predicted. In particular, it will try to reduce imports and increase exports, which, in turn, will affect countries that export goods to the US. This would seriously affect many countries around the world, causing an economic slowdown, he said.

From MCOT News, June 10 2005

U.S. and Britain Agree on Relief for Poor Nations

Washington - The United States and Britain have reached an agreement on how the billions of dollars that the world's poorest nations owe to international lenders can be erased, removing the last impediment to an accord long sought by the richest nations, a senior official involved in the negotiations said Thursday. Treasury Secretary John W. Snow and his British counterpart, Gordon Brown, the chancellor of the exchequer, will present their proposal to a meeting of the finance ministers of seven of the Group of 8 industrial nations on Friday in London, the official said.

The plan would free 18 countries, most of which are in Africa, from any obligation to repay the estimated $16.7 billion they owe the international lenders, said the official, who requested anonymity because a formal announcement of the agreement had not been made. The debts will be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans.

Mr. Bush had signaled his willingness to go along with writing off the debts in principle, but the United States and Britain had very different approaches to how such a plan would work. The compromise they worked out in negotiations in Washington and London over the past several days gave the White House much of what it wanted, but also handed Prime Minister Tony Blair of Britain a timely political lift four weeks before a scheduled summit meeting of leaders of the Group of 8 nations, of which Mr. Blair is the current chairman. "Yes, we have reached an agreement spelling out what President Bush and the prime minister outlined the other day in Washington," said the official, referring to talks this week between the leaders.

The agreement on debt cancellation is likely to be the only big issue at the coming Group of 8 summit meeting in Scotland on which the United States is in full accord with the other major industrial nations. The Group of 8 includes, in addition to the United States and Britain, France, Germany, Italy, Canada, Japan and Russia. The White House has also rebuffed Mr. Blair's efforts to persuade the United States to move closer to the position of the other industrial nations on how to fight global warming. Mr. Bush also has resisted calls by Mr. Blair for a doubling of direct governmental aid to Africa, saying the United States has already tripled aid to African countries in recent years and will provide more as those nations show they can use it effectively. And the administration has rejected the British proposal for creation of a new international body that would raise money for Africa by borrowing against pledges of future aid.

The debt relief negotiations had been bogged down for months over which of two possible methods should be used to eliminate the debt. One approach, favored by Britain, was for the rich nations to take over responsibility for repaying the debts. The second method, favored by the United States, was for the loans to be written off entirely by the lenders. In the end, Britain agreed to the American approach with a promise from the United States to provide additional money to the lenders to make up for the assets they were writing off.

The second issue was whether to sell some of the International Monetary Fund's gold reserves to help pay off the loans owed to the fund. The United States objected to any gold sales, saying it would drive down the price of gold on the open market, hurting, among others, American gold producers. The compromise was to draw, in part, on the proceeds earned by the monetary fund from sales of gold in the 1990's, according to the official. In theory, the deal would free the 18 countries from making $1 billion in interest payments each year to the World Bank, the I.M.F. and other international lenders like the African Development Bank. In practice, they had not been making the payments, leaving them mired in debt and unable to fully engage in the global economy. Eventually the program can be extended to at least nine other countries with others sure to press for similar treatment.

From New York Times, by Elizabeath Becker and Richard W. Stevenson, June 10, 2005

Speeding Up Infrastructure Projects - NEPAD Calls for More Cooperation with the Private Sector

Through better co-operation and formulation of appropriate partnerships, much more can be done to accelerate the development of key infrastructure networks in the African continent, Prof. Wiseman Nkuhlu, chief executive of the NEPAD secretariat, has said at Abuja, at an African Development Bank seminar on fostering private investments for NEPAD infrastructure projects. Speaking on the need to strengthen co-operation between African governments, multilateral institutions and the private sector in the financing of infrastructure, he said: "A start has been made. The private sector is playing a major role in the financing of ICT infrastructure and development of banking and financial services. The challenge is to extend participation to other areas of infrastructure especially railways, roads, harbours, energy and water."

The Professor continued: "Appropriate project finance structures that ensure risk sharing among governments, multilateral finance institutions and the private sector can be designed. "In South Africa mechanisms have been established for the financing of public roads, prisons, hospitals, etc by the private sector. "The government-managed employee pension fund plays an important role in the financing of these projects. The Public Investment Corporation which is responsible for managing the government employee pension fund has become an important contributor to the financing of some of them. "We believe that this experience can be used to increase significantly Africa's contribution to infrastructure development. There are innovative ways of structuring project finance mechanisms that could be adopted to meet the risk appetites of all participants. Pursuing this route would open new opportunities for public-private partnerships."

Professor Nkuhlu said the African Development Bank has played a significant role in the financing of infrastructure during the last few years and is promoting co-financing with the private sector. "At the NEPAD secretariat we are very eager to learn from the private sector and to consider ways of strengthening co-operation. " He said the NEPAD Heads of State and Government Implementation Committee continue to give high priority to infrastructure development. "The focus on infrastructure has been given an additional boost by the UN Millennium Project and the Commission for Africa reports. They propose significant scaling up of investment in infrastructure. The Commission for Africa proposes US$20 billion per annum. Of course the expectation is that the bulk of the funding will come from the private sector. "Opportunities for increased private sector investment in infrastructure have never been better. What is needed are better mechanisms for co-operation and communication."

Professor Nkuhlu told the seminar that Africa is featuring as an important investor destination in major international conferences including the World Economic Forum and investor forums organised by major business formations including the African Business Round Table, the Commonwealth Business Council, and the United States Corporate Council for Africa. China, India, Brazil and other countries of the South are also paying increasing attention to Africa.

From AllAfrica.com, Africa, by Accra Mail, Ghana, June 2, 2005

Sri Lanka: Regional Experts Advocate Privatization of Electricity Sector

Colombo - Regional energy experts were unanimous in their opinion that if Sri Lanka did not restructure its power sector to involve private sector investment in it, the industry can fall into an acute financial crisis and burden the public with increased electricity tariffs while also having to face an energy crisis. Top energy experts who attended the South Asia Regional Energy Coalition (SAREC) in Colombo yesterday made some plain speaking on the problem-riddled energy sector in Sri Lanka. When the government was about to implement the energy blue print to restructure the power sector, the plan had to be abandoned on the face of stiff opposition from th e trade unions backed by Janatha Vimukthi Peramuna (JVP), a partner in the ruling alliance.

Referring to the Sri Lankan energy crisis and the present situation of the Ceylon Electricity Board with its 14,000 employees against any move of privatisation, SAREC Chairman and Director for India, V. Raghuraman said that Sri Lanka was now in a situation where India was sometime ago. "This is a period of transition. You cannot go by imposing taxes on electricity bills all the way as at present. You will need to ensure that consumers are benefited in the process by bringing in the right kind of investment. What counts here is that the CEB rises from its present bankruptcy to bankability," he said. Mr Raghuraman added that Sri Lanka will have to bring the players and make them responsible for the task. The governments these days cannot fund the power sector alone because it will have to focus its funding to other sectors such as the public health, education and social welfare sectors, he said. "The process of reform should continue in order to meet the energy demands ahead for the country. Whether employees of the CEB like it or not , people are going to demand for more electricity." When electricity reforms took place in India people did not launch any strikes because they knew the benefits, he recalled.

SAREC's Director for Sri Lanka, Nimal S.Cooke said that way things were going the CEB had to close down. "The public suffer its consequences having to pay higher electricity bills. The situation is such that Sri Lankan public pay the highest electricity charges already and signs are such that it will further escalate in due course," said Cooke. "The majority of people silently suffer this," he said and requested the public to urge the government to resolve the crisis by taking appropriate steps to control the situation. "We are not for a private sector monopoly in the matter of bringing private sector to the country for power sector as much as we are not for a public sector monopoly," he said" SAREC Nepal Director Sandip Shah, Sri Lankan Director Lalith Gunaratne, Bangladesh Director Aftab ul Islam also spoke on this occasion. They pointed out that Sri Lanka can learn from the countries in the region, Nepal, Bhutan, Bangladesh and India how they have benefited after opening its power and energy sectors for private investments.

From Asian Tribune, Thailand, by Sugeeswara Senadhira, Colombo - June 3, 2005

Government Conscious Of Privatisation Hazards

Kuala Lumpur - The government is conscious of the implications and challenges of the privatisation programme, which had todate been successful, but felt that there was a need to accelerate the implementation of the programme, Works Minister Datuk Seri S. Samy Vellu said Tuesday. "The size and large number of projects to be privatised and the high public expectation have exerted great pressure on the public service. This calls for a strong commitment on the part of management as well as the support of relevant personnel involved in the implementation of privatisation projects," he said. He said this in his plenary address at the 15th International Road Federation (IRF) World Meeting on "The Politics in Transport and Road Infrastructure Policy" in Bangkok. His text of speech was faxed to Bernama Tuesday.
He said as the success of the programme rested on the outcome and the performance of privatised projects, it was imperative to ascertain that projects earmarked for privatisation were economically viable and that the aspect of social obligation was not neglected for the benefit of all Malaysians.

He said under the Eighth Malaysia Plan (2001-2005), a total US$4.8 billion was allocated for road development in the country. "With the implementation of our privatisation policy and deferred payment method, we are able to sustain the implementations of road projects and complete them in a shorter time," he added. Samy Vellu said Malaysia today had over 16,000 km federal roads and some 50,000 km state roads. This network forms the backbone of the country's economic activities where more than 95 per cent of goods and passengers were transported.

The Works Minister said in the course of resolving traffic problems in Malaysia, extensive road widening and new roads were constructed but the problem remained formidable. "We can see that there is an increasing high cost in providing more and more road space especially within urban areas. There is a physical limit to how much more road space that can be built to meet the increasing traffic demand," he added. Touching on road accidents, he said deaths and injuries caused by these accidents had become a major issue where statistics revealed that the number of deaths due to road accidents increased from 4,048 deaths in 1990 to 6,035 in 2000. "Of this, motorcyclists had been identified as the most vulnerable road user because they contribute to about 58 per cent of the total deaths," he said.

From Bernama, Malaysia - June 14, 2005

Reform of Public Enterprises - Lessons from the Indian Context and Elsewhere

Indian public enterprises have failed to give expected financial results due to excessive social and non-commercial obligations imposed upon them. Though there exists an argument that these are public utility services, which are not guided by profit motives, it is also imperative for the public sector to make at least an operating profit to ensure its survival. Industrial Policy 1991 was a total reversal of earlier public sector policy in that it introduced liberalization and privatization into the Indian economy. The number of reserved areas for Public Sector Enterprises were reduced from 29 to 8 as per Industrial Policy 1956. In fact, Industrial Policy 1991 outlined a completely new approach to Indian public enterprises.

Critics have railed against proposals to privatize Indian public enterprises. Opinion has been split with proponents emphasizing anticipated improvements and changes in public enterprises through disinvestment or privatization, while opponents have decried the changes on the basis that such enterprises should remain the property of the state. The Indian government has faced difficulties in undertaking full privatization because Indian public enterprises were established with a variety of social objectives, which have been the concern of various social and political pressure groups. After privatization, many objectives such as achieving a socialist pattern of society, production of essential goods, providing a model to private enterprise could no longer be expected of Indian public enterprises. Further, the absence of effective governance mechanisms, an underdeveloped capital market, and apprehensions about job losses are some other reasons for hastening the process towards privatization.

In this context, reforms for Public Sector Enterprises such as competition, deregulation, listings in the stock market and corporatisation are feasible alternatives to full privatization. Various writers have come out in support of such reforms, providing both theoretical and empirical evidence. For example, Yarrow ('Privatization in theory and practice', Economic Policy, 2, 1986: 324-64), argues that competition and managerial accountability are more important than privatization, per se, in promoting economic efficiency. Bardhan and Roemer (articles on 'Market socialism' in Journal of Economic Perspectives, 6, 1992: 101-16 and 8(2), 1994: 177-81), argue that suitable mechanisms can be designed to insulate private actors from undue state interference, and efficiency can be achieved by corporatization, deregulation and competition, without resorting to privatization.

Empirical work by Duncan and Bollard (Corporatization and Privatization: Lessons from New Zealand, Auckland: OUP, 1992) also supports the reform alternative. They document that New Zealand's corporatization efforts in the mid-1980s resulted in efficiency and financial gains in ten out of eleven enterprises studied. Work by Pinto, Belka and Krajewski ('Transforming State Enterprises in Poland', Brookings Papers on Economic Activity, 1993: 213-61) confirms that there were significant improvements in the performance of most manufacturing firms subsequent to Poland's 'big bang' reforms of January 1990 (prior to privatization), which included deregulation of prices, introduction of competition in many industries, and signaled tighter monetary and fiscal policies. Li ('The impact of economic reform on the performance of Chinese state enterprises 1980-1989', Journal of Political Economy, 105, 1997: 1080-1106) also documents marked improvements in the marginal productivity of factors and in the total factor productivity of 272 Chinese State Owned Enterprises (SOEs) over the period 1980-89 resulting from reforms initiated in 1979.

In Indian context, Sivadasan (Reforming PSE: lessons from the Indian experience, curriculum paper, Graduate School of Business, University of Chicago, 2002) investigates the impact of the public sector reform measures of partial-privatization and increased autonomy, along with the competition enhancing deregulation and liberalization policies adopted by the Indian government in the 1990s. The results of this study support the hypothesis that increased competition leads to improvements in efficiency.

China's experience of public sector reform is also worth highlighting. China has moved cautiously in its privatization efforts. It privatized only smaller SOEs, while the government has retained control over the larger ones. China has gradually introduced reforms of Public Sector Enterprises and their performance has improved as a consequence of such reforms. Therefore, by reforming public enterprises the objectives and purposes of privatization may be fulfilled, because, once management is professionalised and placed on a new footing, similar outcomes may be achieved independent of whether ownership is private or public.

From Asian Analysis, Australia - June 21, 2005

Next steps in the Privatization Front

Finance Minister announced the government's next steps in the privatization front: a) OTE: Government plans to sell a further 10% stake to foreign institutional investors upon the maturity of the convertible bond in August. The State will not reduce its stake to less than 34%. Meanwhile, the State does not seek to find a strategic investor who will assume the management of OTE. b) OPAP: A public offering for a 17% stake will take place imminently (within July). c) Emporiki Bank: Credit Agricole is reckoned to further increase its stake in the bank while it could also potentially assume the management, should its stake exceed 34%. No decisions have been taken yet as the issue depends on solution of the bank's pension liabilities issue. d) Agricultural Bank: 6 months following the share capital increase, the State will seek to sell a 10% stake. e) Postal Savings Bank and Athens International Airport: floatation to the ATHEX in 2005 and 2006, respectively. f) Last, privatization of Bank of Attica.

From Reporter.gr (subscription), Greece - June 2, 2005

Privatization Procedure To Be Clarified

Turkey will clarify the procedures involved in the privatization process and put an end to differing interpretations of the legal system through a bill submitted to Parliament, 'Turkish Daily News' reports. If the bill is passed in its present form, the precondition of two binding bids for assets would be scrapped from the tender process. The Privatization Administration would disclose to the public the asset value of any company to be privatized after the tender process is finalized. The bill makes it possible for the tender process to continue even with only one bid, if the state's share in a company is below 15 percent. Moreover, the bill revises the "Closed Bidding Method Among Designated Bidders" included in the current law. This method makes it possible to sell assets if other tender methods fail.

With the permission of the Supreme Privatization Board (OYK), the Closed Bidding Method Among Designated Bidders could be launched and priorities for the sale - technology, employment or production -- would be clearly listed in the pre-tender document. After bids are received the tender commission would then decide whether to meet the bidders one by one or in a collective session.

The results of the meetings would be submitted to the board for a decision. Employees who work in organizations within the scope of privatization under this bill and whose contracts are terminated due to restructuring for privatization, downsizing, or cessation of activities in full or in part would be paid compensation on top of their legal entitlements. This Special Job Loss Compensation Payment would be double the current daily minimum wage. The compensation would be paid by the privatization fund.

Reporter.gr (subscription), Greece - June 2, 2005

Public and Private Sectors See Partnership As Key to Innovation

The key to a competitive and innovative Europe lies in partnerships, according to experts and decision-makers from both the public and private sectors. At a roundtable on the role of research in Europe during the recent European research and innovation conference that took place in Paris from 3 to 5 June, the speakers also noted that increasing the research budget is important as long as it goes hand in hand with increased efficiency. 'The US understood early on which were the key technologies to invest in,' stated Marion Guillou, President Director General of INRA (the French national institute for agronomic research). 'The EU is now trying to stay in the race but it is difficult and a strong challenge. The only way to achieve this and hopefully even surpass the US is to create and increase collaborations and partnerships to obtain more innovative results. Indeed, increasing the research budget alone does not necessarily mean increased productivity,' she explained.

According to Dr Guillou, since both the future of Europe and the future of companies depend upon research, this leads to a common ambition and therefore mutual recognition. Philippe Carli, President of Siemens France, agreed with Dr Guillou's analysis, insisting on the increasing need for large joint actions between public and private research entities, and between countries. 'Major companies in general never stop innovating and investing in research and development (R&D). At Siemens for example, we spend five million euro a year on research. For us, key partnerships are developed when participating in collaborative projects through the EU's framework programme and the Eureka programmes, 'said Mr Carli. Pascal Viginier executive director of R&D at France Telecom also emphasised the benefits of participating in EU research programmes to help develop multinational networks.

'Partnerships offer the possibility of quicker innovation,' said Mr Viginier. 'By adding up the strength of two or more partners, companies are able to get their first results much faster than they would on their own. In the telecommunication sector, for example, finished products can be obtained within 18 to 24 months of the start of a partnership.' Partnership also means being able to make use of the best of innovation, innovate better, and ensure that all companies involved remain on top, added Mr Viginier. Asked what makes a successful partnership, Mr Viginier explained that what is needed is strong engagement over a limited period of time for a specific purpose. 'It is essential that the business objectives of all companies involved are either identical or complementary. Secondly, the relation must be symmetrical, meaning that the partners must bring to the project comparable resources. And finally, partners must negotiate from the start the intellectual property rights, i.e. who owns what,' said Mr Viginier.

From Cordis News, EU - June 7, 2005

Fostering Public-Private Partnership for Innovation in Russia

This book presents the results of an OECD-Russia co-operation project carried out under the aegis of the OECD Committee for Scientific and Technological Policy. It examines how relations between the science base and industry, and more specifically partnerships between the public and private sectors, can be developed in Russia to: -Foster innovation throughout the economy in order to strengthen the basis for sustainable long-term growth. - Improve the international competitiveness of Russian firms. - Enable the Russian Federation to better respond to domestic demand for high-technology and sophisticated engineering products and systems. - The report draws on the experience of both OECD countries and the Russian Federation in fostering industry/science linkages. It also reflects work done in the OECD on public-private partnerships, national innovation systems and government policies to promote innovation. It builds on previous co-operation between the OECD and the Russian Federation, and the results of a series of interviews with major Russian stakeholders by a group of OECD officials and experts, as well as of a special survey of current Russian initiatives in the area of public-private partnerships. It was presented and discussed at a conference held in Moscow in December 2004.

Readers can access the full version of the Handbook choosing from the following options: -Subscribers and readers at subscribing institutions can access the online edition via SourceOECD, our online library. - Non-subscribers can browse and purchase the PDF e-book and/or printed edition on the OECD On-line Bookshop.

From OCDE (Communiqués de presse), France - June 15, 2005

World Bank Supports Second Privatization Social Support Project

The World Bank today approved a US$465.4 million (Euros 360 million) Second Privatization of Social Support Project Loan (PSSPII) for Turkey. The project's main objective is to support the Government's privatization program through mitigating the social and economic impact of the privatization of state-owned enterprises (SOEs). The Government's privatization program aims to enhance the efficiency and competitiveness of the Turkish economy and thereby help in meeting the market demands of EU accession. The Privatization Administration will be in charge of the overall implementation of the project, which is composed of the following components:

Job Loss Compensation: This component will ameliorate the temporary social and economic impact on workers displaced during the privatization of SOEs. It will finance severance and related payments, as regulated by law, to workers displaced by job loss due to the privatization of SOEs. Labor Redeployment Services: This component will provide labor redeployment services to workers who have been displaced by the privatization of SOEs, including secondary layoffs, to assist them in rapidly re-entering the labor market. The component will finance a variety of labor redeployment services, including job counseling and placement services, retraining, temporary community employment (managed by the Turkish Employment Organization - ISKUR), small business assistance services, and small business incubators (managed by the Small and Medium Industry Development Agency, KOSGEB).

Management, Monitoring and Evaluation: The objective of this component is to monitor the impact of labor redeployment services and manage the PSSP II effectively as a whole. The component will finance surveys to evaluate the effectiveness of the labor redeployment services in mitigating the social costs of labor redundancies resulting from employment and privatization on selected communities; and undertake in-depth socio-economic analyses of specific communities where privatization has taken place.

"The World Bank is pleased to help the Government of Turkey in increasing the productivity of state-owned enterprises undergoing privatization by cushioning the social impact of labor displacement during privatization and economic reform," said Andrew Vorkink, World Bank Country Director for Turkey. "Enhancing the competitiveness of the Turkish economy is a pre-requisite for eventual EU accession. The project will ensure that there is a social support program that is directly linked to, and will support, the implementation of the privatization program." PSSP II will mark the continuation of the first Privatization Social Support Project that started in 2001. PSSP I helped support the Government's effort to disengage itself from production activities and thus foster the continuing development of the private sector in Turkey, reduce the socio-economic impact of privatization, and mitigate the negative impact of economic instability on poor households. The lending instrument for the Second Privatization Social Support Project is a Specific Investment Loan (SIL) in Euro with a 17-year maturity, including a 4-year grace period.

From Press Release - World Bank - June 14, 2005

Yushchenko - Government Must Be Clear On Privatization

Ukrainian President Viktor Yushchenko today called on his government to take a clear stand on privatization, including plans to review past deals that now seem questionable. Yushchenko said a clear policy was needed to restore confidence to businessmen in Ukraine and help attract foreign investment. At the same time, Yushchenko urged Ukrainian lawmakers to approve a memorandum that safeguards ownership rights, a move aimed at reducing concerns about the renationalization of companies already privatized. Yushchenko said there would be a review of some business deals made under former President Leonid Kuchma where it is suspected that state assets were sold at below-market prices to insiders. Yushchenko's comments came before hundreds of business and political leaders were expected in Ukraine for a special roundtable organized by the World Economic Forum.

From Radio Free Europe, Czech Republic - June 14, 2005

IMF Lauds "Impressive Progress" in Georgia

But managing director warns that "putting Georgia's economy on a sound footing will require perseverance" - In a statement released on Monday, officials from the International Monetary Fund (IMF) lauded the "impressive progress" made by the Georgian government since taking office in 2004. In his June 13 statement IMF Managing Director Rodrigo de Rato underlined the government's successes in their transition to an open, market-based economy since the Rose Revolution in November 2003. In particular, he highlighted reform of the tax code, the privatization drive, and steps taken to improve the business climate as "the most visible improvements." "More broadly, Georgia is on a promising path toward sustained growth and the alleviation of poverty," the statement reads. However, while noting the successes, de Rato also warned that "putting Georgia's economy on a sound footing will require perseverance and a broad social consensus in the coming years."

Naming a number of challenges the Georgian government is currently facing, de Rato underlined the government should identify the priority areas for spending money from privatization and external grants. While noting the the steps taken by the government to modernize its financial system, the IMF also offered recommendations, including strengthening financial sector supervision, fostering a competitive environment in this sector, and broadening financial markets. According to de Rato, the central bank should also continue to "enhance its monetary control instruments, which will be key as it seeks to improve liquidity management."

The IMF managing director also called on the government to improve the physical and financial situation of the energy sector, continue with transparent privatization, simplify licensing, eliminate red-tape, deepen civil service reform, and introduce targeted poverty benefits. The fund says it will continue assisting Georgia with policy and technical advice, as well as with financial support. As well as monitoring the progress of the Georgian economy and reforms, the IMF mission managed to reach an agreement with the Georgian authorities last week on an economic program for 2005. In addition, the IMF has provisionally approved a USD 20 million loan to Georgia, although a final decision will be taken on the loan following the next round of monitoring in September.

President of the National Bank Roman Gotsiridze said over the weekend that the IMF had made the loan dependent on several factors being met, including keeping inflation below ten percent and keeping money reserves at a level that does not cause any inflationary pressure. "We hope the economy will develop in a healthy way over the year, that GDP will increase by more than 8 percent, that inflation will be a single-digit number, and that macroeconomic parameters will satisfy the IMF," said Gotsiridze. Rodrigo De Rato was one of the senior officials from the IMF and the World Bank who participated in an IMF/WB Constituency Meeting in Tbilisi over last weekend and had meetings with the Georgian authorities, including the Prime Minister Zurab Noghaideli, and the President of the National Bank of Georgia. Last year the Executive Board of the IMF approved a three-year program under the Poverty Reduction and Growth Facility (PRGF) to loan SDR 98 million (around USD 144 million) to Georgia to support its economic reforms. The PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years with a 5½-year grace period on principal payments.

The IMF noted that Georgia's macroeconomic performance "continues to be strong" with real GDP growth of 6.2 percent in 2004. Fiscal performance, the IMF states, "was impressive" in 2004, especially with improvements in revenue collections stemming from stronger tax enforcement. "Preliminary indications are that this performance has continued in early 2005," reads the statement issued by the IMF.

From Messenger.ge, Georgia, by Christina Tashkevich - 16 June, 2005

Post-revolution Ukraine Encourages Investors

Kiev - Ukraine's new leaders, under pressure to make good on reforms promised during the "Orange Revolution," pledged on Thursday to create proper conditions for investment and allayed concerns about overturning privatization. President Viktor Yushchenko, standing alongside the prime minister he has criticized in recent weeks, signed a memorandum guaranteeing property rights, a move intended to end uncertainty over privatization's inhibiting investment in ex-Soviet Ukraine. Addressing a World Economic Forum roundtable, he pledged to speed up reforms later in the year so that every Ukrainian might feel the benefits pledged during weeks of mass protests that helped win his election last December. Analysts say rows over which privatization's are to be subject to review are harming investment prospects.

They also express concern, as the government warily eyes a parliamentary election next March, over slowing growth and rising spending. "We set ourselves a task for 2005 for every Ukrainian to feel progress. We want to see the democratic revolution bringing fruits to every individual," said Yushchenko, flanked by six presidents of ex-Soviet and Central European states. "The task for the second half of the year is to kick-start reforms. The next year will become the peak of reforms." He predicted healthy, but reduced, 2005 growth of seven to eight percent and a positive trade balance, proof that Ukraine had policies "able to guarantee conditions for business, both domestic and foreign, to function properly." Privatization, the issue which has spooked most investors, would "be continued and pursued more actively." "The Ukrainian elephant has awakened," he said. "And once it gets its investment strength, there will be no stopping it."

Property Rights - Earlier, the president and Prime Minister Yulia Tymoshenko signed the memorandum enshrining post-Soviet property rights. Tymoshenko said it ensured moves on property would be undertaken "in accordance with the constitution, laws and court rulings. One of her deputy prime ministers said plans to publish a hit-list of privatization's to go under review had been dropped and the process would be taken out of politics and put into the hands of the courts. "How can you publish a list of enterprises if it is a court's decision?," Oleh Rybachuk said. He described uncertainty over sell-offs as "the question which concerns most investors." The most prominent case concerns the giant Kryvorizhstal steel mill, sold last year to investors linked to Kuchma's administration for less than rival offers.

Ukraine's new leadership has repeatedly set apart the case, describing it as "theft." Tymoshenko has called for a tender for a new privatisation by the end of the year and made clear that decision was not open to question. "There is already a court ruling. This is a clear ruling that the privatisation was illegal," she told reporters. "There can be no out-of-court settlement. I know of no other way than conducting a new, open privatisation auction." Also attending the forum were the presidents of ex-Soviet Georgia and Moldova, both committed to European integration, and the president of Poland, Ukraine's chief ally in Brussels.

Yushchenko has linked virtually every policy decision to whether it furthers a long-term plan to join the European Union. The EU has backed an action plan calling for an overhaul of legislation, but has given no promises on membership. Analysts say the economic outlook has deteriorated. "Ukraine's economic performance is now far less rosy than it was prior to the election-related instability in Q4 2004," Credit Suisse-First Boston said in a report this week. Yushchenko gave Tymoshenko a dressing down last month after her attempts to cap fuel prices prompted Russian companies to halt supplies and created long queues at the petrol pump. But polls show 80 percent backing for the premier, whose moves have included big pension and public sector pay rises.

From Reuters, by Andrew Hurst - June 16, 2005

Nearly All Oppose Privatisation

A "staggering" nine out of 10 members of the public do not agree with the Government over the use of private firms to run public services, according to a survey. Research for Unison showed that over the past few years opposition to private-sector involvement in hospitals and schools had increased. General secretary Dave Prentis said public attitudes against privatisation had hardened. "Privatisation is not popular. The Government should be listening to the public, not to big business, The public voted Labour in and they can vote them out. "The Government got back in with a much-reduced majority so they cannot afford to ignore public opinion and suffer the backlash. "The public don't want private companies making money out of the sick and elderly, or out of our children's education. They are sick of picking up the tab to pay for boardroom bonuses." Nine out of 10 of the 2,200 people questioned for the union said public services should be run by the Government or local authorities rather than private firms.

From Daily Mail - UK, UK - June 21, 2005

Public-Private Partnerships On the Rise

A number of German development agencies are stepping up efforts to integrate private business into their aid projects. A relationship of seeming mutual benefit, are "Public Private Partnerships" good news for everyone? In some parts of the world, getting sick can be a fatal blow. Being unable to work when you live on the breadline is bad enough, but what's worse, medical treatment is likely to be prohibitively expensive. According to Gabriele Ramm from the German Society for Technical Cooperation (GTZ), falling ill in a developing country can fast become a matter of life and death. "People are forced to work under appalling conditions, without any kind of safety precautions, on construction sites or in factories where they're dealing with toxic chemicals," she said. "They're regularly exposed to various factors that will make them susceptible to illness, and inevitably have no access to medical care."

Protecting against crises - In India, for example, 93 percent of the workforce earns its living without ever having signed any kind of contract, and therefore fails to pay any social contributions. To combat the problem, the GTZ and the German Allianz Insurance company have developed what they call micro-insurance schemes. These allow locals in primarily rural regions of India, such as farmers, trades-and craftspeople and owners of small businesses, to insure themselves against accident, illness, invalidity and natural disasters at affordable rates - as low as 20 cents a month.

"Micro-insurance schemes are a protection against crisis situations, and available to people who fall through the net of other systems," explained Ramm. "They work on the same principle as other insurance schemes, but there are certain conditions. Standard insurance structures are too costly for the poorer members of society, which means that we have to develop other options. We concentrate on group contracts - we don't offer many individual policies, because it would be too expensive. And in order to process these contracts we rely on middle men."

A question of trust - That's where the Indian NGOs come into the equation. Teaming up with a development aid agency is one way for a company to test the waters of a potential new market and boost its image, while in return, the organization gets to benefit from its partner's commercial clout - the condition of getting on board being that the business partner takes over at least 50 percent of the costs.

Rural cooperatives collect the contributions from scheme members and take over the claims investigations and settlements. As group insurers, they can negotiate optimal rates and also enjoy the trust of the people - who often need to be told why it's worth being insured in the first place. The plan has already proved successful. In Tamil Nadu, some 60,000 people signed up for a life insurance with the help of the NGO "Activists for Social Alternatives," under the aegis of the Indian-German joint venture Bajaj Allianz. Allianz is well aware that these small-scale insurance schemes will never make mega-bucks, but the company is optimistic that it's tapping into a potential mass market. Meanwhile, the GTZ gets to assemble a welfare net for impoverished members of Indian society - a service that would have remained a pipe-dream without the know-how of a commercial insurer.

Taking advantage - It's a win-win situation. But are these public private partnerships swallowing public development funds - in other words, taxpayers' money - which companies could invest on their own initiative? Gabriele Ramm is familiar with the suspicion that companies might take advantage of these PPPs, but she explained that the Ministry for Economic Cooperation and Development (BMZ) has taken due precautions: "The BMZ set up the concept in 1999 and fleshed out some very stringent stipulations," she said. "Any project carried out in cooperation with private business has to be approved by the ministry. So there are tight controls to ensure that there's no risk of manipulation."

From Deutsche Welle, Germany, by Rolf Wenkel - June 19, 2005

Syria's Ruling Baath Party Considers Privatization

Damascus - Syria said on Tuesday the ruling Baath Party was considering privatizing loss-making state firms as part of efforts to open up the centrally planned economy, but not at the expense of health, education and jobs. The party is holding its first congress since 2000 with reform topping the agenda amid international pressure on Damascus to ease the tight grip it has kept on economic and political freedoms since the party seized power in 1963. "The profitable public sector that is doing a good job we can keep, but the part that is losing money we should privatize so it makes economic sense," Expatriates Minister Buthaina Shaaban told reporters on the second day of the congress. "But with the privatization we want to make, we also want to ensure that people have good health and education. So it is with social care that we want to approach the economy," said Shaaban, also spokeswoman for the congress.

At the opening ceremony, President Bashar al-Assad renewed promises of economic reform made when he took office in 2000.
In those five years, Syria has allowed privately owned banks to open in the country for the first time since the financial sector was nationalized in the 1960s. But diplomats say economic reforms are piecemeal and have moved at a snail's pace.

Growing Population - The state remains the largest employer in the country of more than 17 million, controlling key services and industries and strictly curtailing imports. It has struggled to create enough jobs for a growing population but had long ruled out privatization for fear of stirring social discontent. For the first time, Syria appears to be searching for the middle ground. "There is a desire to create a balance between openness and market economy and between the government's social role in health and education," said Shaaban. Syria, forced this year to bow to a United Nations demand and withdraw its troops from Lebanon, has been under U.S. and European pressure for economic and political liberalization. But in his opening speech Assad set out no far-reaching initiatives, focusing instead on the need to revitalize the stagnant economy and stamp out corruption.

Shaaban said delegates discussed the need to fight graft and cut waste that analysts say cripples the public sector.
The congress is expected to restructure the party's command and allow some independent parties, but will not bring the sweeping democratic reform opposition figures have called for. Shaaban said the congress had discussed pluralism but was leaning toward a solution that bars parties based on religion or ethnicity, in effect curtailing Islamist and Kurdish parties. She said the party was considering a possible lifting of an emergency law in effect since 1963 that allows arbitrary arrests and trials at a security court. "The issue of canceling the emergency law or even parts of it has been presented," she said, but added there was no certainty the congress would endorse the move. Rights activists want the security court to be closed. The reforms discussed at the congress will be summarized into a list of recommendations that about 1,150 members will vote on in the closing session expected late on Thursday.

From ABC News, by Lin Noueihed - June 7, 2005

Municipal Workers Demand Public Investment to Rebuild Communities

Toronto - Call comes on eve of Federation of Canadian Municipalities meeting - Municipal workers from across Canada have renewed their demand that governments rebuild municipal infrastructure and services with public investment, not higher-cost private "partnerships." The workers, members of the Canadian Union of Public Employees (CUPE), issued the call in Toronto this week as they met to strengthen their fight against privatization. They also strategized about increasing support for public investment in public services. Their gathering, the first of its kind for CUPE, comes on the eve of this year's meeting of the Federation of Canadian Municipalities (FCM). "We are resolute in our commitment to protect public services from privatization and so-called public private partnerships, while pushing for stable, accountable public investment," said CUPE national president Paul Moist. "Municipal workers from across the country will carry this message straight to the FCM meeting in St. John's," said Moist from Toronto. "They'll also return to their communities, joining other CUPE members campaigning and organizing to strengthen the network of services that keep our cities and towns strong."

Workers at the meeting shared insights and lessons, and put their heads together with experts on public finance, environment, social inclusion and local government. Broadening and sustaining a New Deal for cities and towns that delivers the "real deal" for communities is a top priority. Municipal workers are on the front line in CUPE's national effort to rebuild strong communities after years of underfunding and downloading. CUPE workers are reaching out to community organizations to form local coalitions to stave off corporate takeovers while pushing for public investment. CUPE will be attending the annual meeting of the FCM to continue its advocacy for public investment in municipal infrastructure. Alarmed at the escalating trend of higher-cost "partnerships" and "alternative financing," CUPE members and leaders will make their views known at Canada's major gathering of municipal leader officials. The FCM meets in St John's, NFLD, from June 3 to June 6. CUPE, Canada's largest union, represents 540,000 women and men delivering public services in communities from coast to coast, including the majority of the country's municipal workers.

From Canada NewsWire (press release), Canada, June 2, 2005

Peruvian Leaders Gather to Discuss Governance Best Practices

Lima - (Press Release - International Finance Corporation) More than 350 public sector leaders, representing municipal, provincial, and national government bodies, attended the first International Congress on Best Practices in Governance, sponsored by the International Finance Corporation's Technical Assistance Facility for Latin America and the Caribbean, Ciudadanos al Dia (a Peruvian NGO dedicated to promoting transparecy and efficiency in governance), AVINA, and the national Public Defender's office.

The congress was designed to provide public sector leaders with a forum for exchanging ideas and experiences in improving government efficiency and transparency. During the plenary session, Ciudadanos al Dia presented the finalists for its annual awards for Best Practice in Governance. The congress also featured workshops on improving transparency in contracting and procurement, public-private partnerships, facilitating access to public information, and enforcing policy compliance. Simplifying business regulations was another important theme of the congress. According to World Bank's Doing Business in 2005 report, excessive red tape at the municipal level represents one of the major barriers to formalizing a business. In Peru, for example, starting a business takes almost 100 days, on average, and approximately 50% of that time is spent complying with municipal business regulations.

In conjunction with the congress, Ciudadanos al Dia and IFC hosted a workshop to present guidelines for a National Plan for the Simplification of Municipal Administrative Procedures for Businesses, drafted through a series of meetings with municipal governments and private sector associations from across the country. Participating in the workshop were leaders from 16 major municipalities - including Lima, Callao, Piura, Arequipa, Ilo, and Tacna - as well as representatives from the Ministry of Economy and Finance, the Presidential Council of Ministries, the Center for the Promotion of Small and Medium Enterprises, the National Confederation of Private Enterprise Institutions, the Peruvian Chamber of Construction, and the Peruvian Association of Exporters.

"Creating competition through events such as this one generates incentives for public sector institutions to improve their governance. The facility's work with Ciudadanos al Dia in promoting the exchange of best practices and fostering dialogue between public and private sector representatives demonstrates the integrated approach IFC is taking in its work on simplifying business regulations," commented Atul Mehta, IFC director for Latin America and the Caribbean.

From Harold Doan and Associates (press release), CA - June 1, 2005

Peruvians Protest Water Privatization

Lima - The National Confederation of Communities Affected by Mining is carrying out a national protest in Peru on Friday in defense of water and against the privatization of its supply. The organization said in a statement that the general water bill seeks to hand over the control of the precious liquid to the private sector. The confederation's report coincides with similar denouncements by other Peruvian sectors. The government has recently refused to place water into the market economy, one of the few survivors from the process of privatization in the last decade. However, opposition legislator Javier Diez Canseco defended water as a human right and a responsibility of the State. The Peruvian state has lost sovereignty over strategic sectors such as air transportation and control over the regulation of essential resources like fuel. Peruvians have to pay abusive electricity and phone bills because of this process. Diez Canseco said water is not an item on the market, rather is vital for people's life, for agriculture and production that the state must guarantee.

From Prensa Latina, Cuba - June 3, 2005

Chilean Students Protest Privatization

Santiago - Chilean student leaders are carrying out Wednesday a series of rallies to stop the privatization of education in the country. The summons took place after the police forces dislodged the capital's two universities on Monday and detained the students of these centers. These demonstrations began over one month ago, when Congress approved a new law of credits to university students, termed the government's new step to eliminate public teaching. So far, more than 1,000 university students have been detained and some of them have been taken to military courts, charged with firearms possession. Despite that, many university centers, included the Chilean University, are still occupied by their students, while classes are virtually paralyzed throughout the country. Meanwhile, the Chilean Education Minister is meeting today with university presidents of Chile and Santito, still occupied by their students, to define a strategy as for these centers. Student leaders are afraid that as a consequence of the meeting, a police order for eviction emerges, like last Monday in the capital's other centers.

From Prensa Latina, Cuba - June 1, 2005

Report: Impacts of Public-Private Partneships

Washington, DC - The Water Partnership Council today released its first industry report on public-private partnerships to mayors and other municipal officials attending the United States Conference of Mayors' Annual Meeting. Based on interviews with 31 community leaders currently engaged in public-private partnerships, An Evaluation of Public-Private Partnerships for Water and Wastewater Systems says satisfaction with partnerships is high, employees are satisfied, and impacts on the environment, customers and the community are positive.

"The Water Partnership Council has compiled the first statistical data about the impacts of public-private partnerships, and it comes straight from the people who know best: public officials who have partnerships in their communities today," says Water Partnership Council President Leonard F. Graziano. "Through this report, readers will gain an understanding of the positive impact partnerships can have on communities, the environment, customers and employees."

Key findings in this first-of-its-kind report include:

· 50 percent of respondents rate overall satisfaction with the partnership as "extremely satisfied," the highest possible ranking. No respondents rate overall satisfaction as anything less than "satisfied."
· 74 percent rate regulatory compliance as better under the partnership than prior to the partnership.
· 92 percent of respondents that projected cost savings achieved those savings; the other 8 percent indicate it is too early in the partnership to tell.
· 93 percent of respondents note that involuntary employee turnover declined or remained the same.
· 93 percent of respondents say that employees have more training and professional growth opportunities than they did prior to the partnership.
· 64 percent of respondents report a decrease in employee grievances under the partnership; none report an increase.
· 93 percent of respondents note that private partners proactively participate in community activities above and beyond what's required in their contracts.

"As a city, we dabble in everything. They [the private partner] are specialized. They have the expertise that far exceeds what we could provide our customers," says Mayor Dean Mazzarella of Leominster, Mass., one of over a dozen public officials quoted in the 20-page report. Communities represented in the report serve populations ranging from 4,000 to 1.2 million. The Water Partnership Council is a non-profit organization established by the leading providers of operational services for water and wastewater systems in the United States. The Council seeks to partner with citizens, local governments, and organizations committed to strengthening this country's water and wastewater infrastructure. Council members are American Water, OMI, Inc., Severn Trent Services, Southwest Water Company Services Group, United Water and Veolia Water North America. For more information about the Water Partnership Council, or to obtain a copy of the report, call (202) 466-5445 or visit www.waterpartnership.org.

From Water and Wastewater, Florida, by Sarah Chittenden, June 13, 2005

U.S. Delegation Attends International Seminar on Economic and Employment Development

Brussels - Assistant Secretary of Labor for Employment and Training Emily Stover DeRocco today leads a U.S. delegation to Europe for a seminar on successful policies and practices in local economic development. The delegation consists of U.S. leaders in business, education and government. "I am pleased to join this group of U.S. leaders to present our country's approach to workforce development which stresses meeting the human talent demands of businesses to maximize local economic development strategies," said DeRocco. "In addition to sharing our experiences, this forum provides an opportunity to discuss and learn about workforce development strategies pursued in European Union countries. We look forward to a fruitful exchange that informs leaders on both sides of the Atlantic as we continue to adapt to the demands of the global economy."

DeRocco will share the U.S. Department of Labor's efforts to build a public workforce system that creates partnerships between the public and private sector to meet employers' demands while preparing American workers for careers in high growth industries. U.S. delegation members include the state of Maryland's Secretary of Labor, Licensing and Regulation Dr. James Fielder. Fielder will make a presentation highlighting Maryland's efforts to strengthen the state's health care workforce. Among Maryland's innovative investments to ease a shortage of health care faculty is a scholarship program for nurses pursuing credentials to teach nursing and allied healthcare professions.

Dr. Gary Green, president of Forsyth Tech Community College, will present a paper on North Carolina's economic transition from textiles toward technology. The state's Piedmont Triad Region has experienced a severe economic downturn in its traditional furniture, tobacco, and textile industries. These industries, which once supported economic and career growth, more recently left large numbers of dislocated workers without necessary competitive skills sets. Forsyth Tech is retraining these workers to qualify for careers in the emerging biotechnology field.

Also participating for the U.S. will be Phillip Bond, vice president for government relations at Monster.com; Richard Fleming, president and CEO of the St. Louis Regional Chamber of Commerce; Ken Smith, chairman and CEO of Strategic Partnerships LLC; and Martin Bean, CEO of New Horizons Computer Learning Centers. The European Union delegation includes representatives from England, Germany and Austria as well as other members of the European Union. U.S. Labor Department (DOL) releases are accessible on the Internet at http://www.dol.gov . The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request. Call 202-693-7765 or TTY 202-693-7755. DOL is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, visit http://www.dol.gov/compliance. Contact: David James, 202-693-4676, or Mike Volpe, 202-693-3984, both of U.S. Department of Labor; http://www.dol.gov

From U.S. Newswire (press release), DC - June 13, 2005

Ottawa Studies Selloff of Federal Buildings

Process could create new era in private-public partnerships - The federal government wants out of its property ownership responsibilities and has begun a process that will get its bricks-and-mortar assets on the market. Buildings such as Place du Portage in Gatineau, above, and Ottawa's Booth Street complex, below, are among those that an internal audit says could be worth as much as $3.3 billion. Although a blueprint will not be ready until next year, the government has given strong hints about how it would like to proceed. The divestiture is being overseen by Public Works and Government Services Canada (PWGSC).

At issue are as many as 327 government-owned buildings across Canada that PWGSC's internal audit says are worth $3.3 billion. Heritage structures such as the Parliament Buildings in Ottawa and the Citadel in Quebec City will not go on the auction block. The key to turning options into actions, says one top official, lies in getting the numbers right. Francois Brazeau, outgoing director general for alternate service delivery at PWGSC, says it is time to bring the government's approach to real estate more in line with the corporate goals of the private sector. "The world of real property has changed, with more modern approaches. The capabilities of management are greater and there are more financial instruments available. We feel it is time to adopt whatever methods are necessary to yield the greatest advantage for taxpayers," he says. High up the priority list of possible actions are selling and then leasing back some or all of the properties; entering partnerships with private buyers; or forming a real estate investment trust (REIT) that would give unitholders a market-determined return on investment.

Some of the buildings are 40 years old and many need renovations to meet policies that require high environmental standards in government-occupied facilities, such as energy efficiency. Bringing them to those standards could cost as much as $2 billion over the next five years. The government, however, says it does not have the money to pay for the work and needs to recapitalize the real estate through the private sector. Asset privatization on this scale is unprecedented in Canada and the real estate industry is closely watching the process, which could create a new era in public-private partnerships.

In the early 1990s, PWGSC began outsourcing day-to-day management of its buildings. Taking the next step and outsourcing ownership is seen by Minister of Public Works and Government Services Scott Brison as the best way to make the assets more efficient. Brison has said private owners spend 20 per cent less on property asset management than the public sector. PWGSC has an annual budget of $2.2 billion to manage its real estate - including heritage sites that would not be part of any selloff. Potential savings are in the hundreds of millions of dollars, which could be used for other government programs. Brison has pegged the figure at $925 million over five years. "There would be a huge appetite for this kind of investment because federal government buildings have very low-risk tenants. It would be almost like buying a government bond," says Dennis Devine, a vice-president with Royal LePage Advisors Inc. in Ottawa. "Possible buyers would be everyone, everywhere, especially institutional investors like pension funds," says Devine, who specializes in commercial real estate.

The inventory is spread throughout Canada, and includes 112 buildings in Ontario, 30 in British Columbia and seven in Alberta. Among the candidates are Place du Portage in Gatineau, which houses PWGSC's headquarters; Natural Resources Canada's Booth Street Complex in Ottawa; 4900 Yonge St. in Toronto; the Harry Hays Building in Calgary; Canada Place in Edmonton; the Government of Canada building in Red Deer; and the Sinclair Centre, Library Square and 401 Burrard St. in Vancouver. Sizes range from 12,000 sq. ft. to more than one million. "It's a pretty eclectic package, so it's vital to get very competent people to look very, very closely at how the numbers add up. Both (public and private) sides had better get things right or this good idea could quickly turn into a bad one," says Howie Charters, managing director of commercial real estate specialist Colliers International in Vancouver. Getting things right is exactly what Brazeau says he wants PWGSC to do. The first goal is to commission a study that "drills down on figures that show us what we should do," he says. That includes analysing such economic issues as accurate building valuation and the cost of leases, as well as such political issues as taxpayer perceptions, government service visibility and environmental sustainability.

In April, PWGSC began soliciting industry input to decide what the study should accomplish. The study's request for proposal will be out this month and it is expected that a contract will be awarded before the end of the summer. Brazeau says governments in countries including Australia and New Zealand have gone the divestiture route with excellent results. He adds that the review process may dictate there be no sales at all, although that is unlikely. "Our only goal right now is to make all the numbers available to tell us what (current ownership) is costing and what it should be costing," he says. Colliers offered early input but has drawn back because companies involved in the analysis will not be allowed to be part of the investment. "I can't see how a REIT would make sense here because it's based on income growth, and (the government) is talking about long-term fixed rents," Charters says. "The methods need a lot of due diligence. From what I can understand, you'd need a pretty good leaseback to get back your investment, although the biggest issue will come from the public who'll want to know if this is a good deal for their tax dollars." Whatever plan is chosen, there will inevitably be political fallout, says Claude Denis, an associate professor of political studies at the University of Ottawa. "It may work on a case-by-case basis, but my concern is that as a general strategy (a selloff) only produces short-term cashflow and is not a wise long-term use of public resources because it gives up too much (financial) control to the private sector," he says. "I think Canadians intuitively feel from an investment standpoint that it's better to own than rent," Denis says.

Analysts such as Royal LePage's Devine believe institutionalization of real estate in Canada is not a question of if, but when, because of increased efficiency and protection against market swings. "I believe the government should hold on to strategic properties, but with the others maybe the private sector can do a better job. The real issue is how the federal government packages and positions the properties it wants to sell," he says. "There's a tremendous amount of work to be done to get their plan anywhere near ready, and you need political will to drive this thing. That will is pretty thin right now. It would be easier to do nothing," Devine says.

From Business Edge, Canada - June 23, 2005

Privatisation Hangs Over Debt Relief

London - The G7 finance ministers agreed Saturday to write off the debt of 18 of the poorest countries, but firm prescriptions of privatisation hovered over the debt relief offer. Finance ministers from the Group of Seven of the world's leading industrialised nations -- United States, Canada, Japan, Britain, France, Germany and Italy (the G8, minus Russia) - agreed to write off 100 percent of the debt of 18 of the poorest countries, mostly in sub-Saharan Africa. That will amount to debt cancellation of about two billion dollars a year. Campaigners focusing on debt relief welcomed the move. But the finance ministers' agreement contains a provision on privatisation that has the potential to deliver to them more money than they wrote off.

The ministers reaffirmed in a statement at the end of their two-day meeting Saturday that "in order to make progress on social and economic development, it is essential that developing countries put in place the policies for economic growth." Among these, they must "boost private sector development, and attract investment," and ensure "the elimination of impediments to private investment, both domestic and foreign." The ministers committed themselves to a successful outcome for the Doha Development Agenda, agreed at the World Trade Organisation's ministerial meet in the Qatar capital in 2001. This, they said, "delivers substantial increases in market access for developing countries, establishes a timetable for the elimination of all trade-distorting export support in agriculture, and provides effective special and differential treatment for developing countries."

The commitment to "elimination of all trade-distorting export support in agriculture" stops well short, however, of an agreement to end subsidies to farmers in rich countries, estimated at more than 300 billion dollars a year. It is these subsidies rather than specific programmes to support exports that have created artificially low prices for Western produce that are choking exports from developing countries. The ministers said they recognise that "not all countries will benefit in the short term from reductions in trade barriers." The ministers committed themselves to "provide support to enable developing countries to benefit from trade opportunities."

The ministers picked the example of Nigeria to stress that their recommended way to reforms lies through embracing the policies of the International Monetary Fund (IMF). "Nigeria is key to the prosperity of the whole continent of Africa," they said in their statement. "We welcomed Nigeria's progress in economic reform as assessed in the IMF's intensified surveillance framework... and encouraged them to continue to reform." In turn they said "we are prepared to provide a fair and sustainable solution to Nigeria's debt problems in 2005." It became clear that the International Finance Facility (IFF) pushed by Britain's Chancellor of the Exchequer (finance minister) Gordon Brown had failed to win significant support from other G7 countries. The IFF, a scheme to raise money in government bonds to be paid off through later aid pledges, was agreed as just one option. The Millennium Challenge Account (MCA) of the United States, which ties aid grants to pledges of good governance including the U.S. fight against terrorism, remains in place as the preferred U.S. way.

France and Germany are giving their backing to some of the recommendations of the Landau Report (named after French Inspector of Finances Jean-Pierre Landau), particularly its proposal for a contribution on air travel tickets to support specific development projects and to refinance the IFF. The G7 finance ministers clearly failed to agree a unified path of movement towards the Millennium Development Goals (MDGs), set by the United Nations in 2000. Little further progress is expected on this front before the G8 leaders summit in Gleneagles in Scotland, July 6-8. Unanimity emerged only over debt cancellation for what are known as Heavily Indebted Poor Countries (HIPC). But the small print here too indicates that this was not unanimity on unconditional support. The HIPC countries have been told that any additional donor contributions will rest on "performance-based allocation systems", and that such action will ensure that "assistance is based on country performance."

The World Bank has been made the monitor for these countries' moves towards "good governance, accountability and transparency." These declared aims are inevitably open to endless interpretation. The 100 percent debt cancellation further holds only for HIPCs "that are on track with their programmes of repayment obligations and adjusting their gross assistance flows by the amount forgiven." That is, the debt will be "forgiven" only to countries that can show they were in the process of repaying. While the debt cancellation will no doubt provide immediate relief, there is enough in the stated package to raise some questions what these countries may have to do next. The finance ministers agreed that they will use grant financing to "ensure that countries do not immediately re-accumulate unsustainable external debts, and are eased into new borrowing." On just how they proceed from here, the HIPCs may have no choice but to look to the World Bank and the IMF to show them the way.

From OneWorld.net, UK, Inter Press Service - June 13, 2005

Key International Healthcare Players Call on G8 to Support Research Through PPPs

An international coalition of major healthcare companies, charities and research initiatives is urging G8 world leaders - due to meet in Scotland shortly - to increase support for research through public-private partnerships, or PPPs. The coalition says that PPPs are at the forefront of research on neglected diseases and have dramatically improved the R&D landscape since they were introduced.

"Public-private partnerships currently support thousands of scientists from research institutes, academia, and pharmaceutical and biotechnology companies. They are working on the most robust product pipeline in history that focuses solely on the health needs of the developing countries," write the signatories, which include key players such as the International AIDS Vaccine Initiative, AstraZeneca, GlaxoSmithKline, International Federation of Pharmaceutical Manufacturers and Associations, and the Global Forum for Health Research.

Before the introduction of PPPs - which bring together industry and non-profits - few scientific advances were translated into products meeting the needs of the most needy, the letter states. The track record of PPPs shows that this approach works with over 8 diagnostics, 45 new drugs, 8 microbicides and 50 vaccines in development addressing HIV/AIDS, malaria, tuberculosis, pneumonia, and other diseases, the group adds.

Both philanthropies and industry have provided important contributions to the initiatives, say the signatories, and now it is time for governments to step up. "By championing a balanced set of 'push' m'chanisms such as adequate and sustained funding for PPPs with 'pull' 'echanisms like the proposed International Finance Facility for immunization (IFFim), advanced market commitments and other policy changes, you, the G-8 leaders can further increase engagement by the private sector and encourage research and development," the letter states.

From ResearchResearch, UK - June 20, 2005