ISSUE 74
September 2005
 
 
   
    China: OECD: China to Become Largest Exporter in Five Years
Vietnam: Reform Has Quickened Following Prime Minister's 2005 Instruction
South Korea: Government Agencies Use Personal Information to Make Public Policy
   
    United Kingdom: Public Sector in Policy Dilemma
MEPs Pass Resolution on R&D for Neglected Diseases of the Developing World
Hungary: Concluding Statement of the IMF Mission
Sweden: SACO Conference on Globalisation
   
    United Kingdom CutsThrough World Bank Spin on Conditionality
IMF and World Bank Use of Conditions under the Microscope
Globalisation Most Important Force in World Economy: IMF
Make Globalisation Process Fairer and More Equitable: Natwar
World Bank Shifts Focus from Growth to Economic Equity
 
   
    African Programme of Action to Counter Crime, Insecurity and Corruption Endorsed
Nigeria: Nigeria's Audit System Encourages Corruption - World Bank
Kenya: Kenya Says It Is Swamped by Past Corruption Cases
Liberia: Liberia Agrees to International Anti-Corruption Oversight
Nigeria: Akanbi Reels Out Causes of Corruption in Nigeria
Nigeria: Akanbi Explains Past Leaders' Inability to Fight Corruption
Nigeria: Wealth declaration: MPs, Public Servants to Be Charged
zimbabwe: Setting Up of Anti-Graft Body Hailed
Nigeria: AlamIeyeseigha: Obasanjo, Governors Hold Anti-graft Talks
African Leaders Move Against Barriers to Development
South Africa: Peer Review Will Expose Corruption in South Africa: Mbeki
   
    South Korea: Incompetent Public Servants Face Forced Retirement
Pakistan: Government Paying Special Attention on Improving Skills of Manpower: PM
China: Government Reform Aims to Root out Corruption
China: Beijing to Revise Norms on Professional Ethics for Teachers
Bangladesh: Corruption Not Decreasing: TIB: Communication, Police Most Corrupt Sectors
India: Kerala's Governance Model Showcased by World Bank
China: SEZ Leads in Reform of Government Governance
Papua New Guinea: PNG Anti-corruption Group Condemns Proposed New Leadership Law
India: Government Disputes World Bank Report
China: China Conference Highlights Corruption as Threat to Stability
   
    Russia: Putin Denies Creation of State Oligarchy, Says Corruption Still Plagues Russia
Bulgaria: European Union Says New Bulgaria Government Must Fight Corruption before EU Accession
EU: Complaints about Fraud and Corruption to Be Facilitated
Lithuania: Council of Europe's Group of States Against Corruption (GRECO) Publishes Report on Lithuania
Bulgaria: EU Says Bulgaria Must Fight Corruption
   
    Iran: Legal Constraints to Anti-corruption Drive in Iran
Yemen: New System to Eliminate Thousands of "ghost" Civil Servants
Lebanon: UN Asks Central Bank to Assist in Iraq Oil-for-Food Corruption Inquiry
Yemen: Consultative Meeting on Combating Corruption
   
    Chile Most Ethical Country for Business, Mexico Gets Points for Strong Economics, Brazil Loses for Corruption
Brazil: Brazil Congressman in Corruption Scandal Expelled
Trinidad and Tobago: TTTI to Government: Ratify UN Corruption Treaty
   
    Corruption Reports Heighten Reform Needs
Bolton Throws a Wrench - Envoy's 750 Proposals to Reshape Reforms May Thwart UN Plans
Oil-For-Food Report
U.N. Treaty to Fight Corruption Begins
Development: Poor Victimised By Extortion, Large and Small
Global Experts Discuss Risk Governance
Preparation of WSIS in Tunis Enters Last Phase with Meeting in Geneva
Worlds Apart: Global Summits Highlight Digital Policy Divide
Benchmarks to Assess Performance of Governance Institutions
United Nations Anti-corruption Convention Enters into Force December
 
   
    Nigeria: NHIS: Federal Civil Servants Issued Identity Cards
Ethiopia: Civil Service Reform Programme to be Introduced into Somali Region
South Africa: Public Service Move on Jobs 'No Reversal'
Niger: Niger Civil Servants Get First Pay Rise in 25 Years
Angola: Government Pledges Permanent Attention to Civil Servants
   
    Fiji: Reforms Target Service Delivery
Fiji: Civil Service Review
Singapore: Centre for Shared Services to Save Civil Service Up to $4m in Costs
Malaysia: Proposals for Civil Servants to Retire at 58
Australia: Future Fund Must be Away from Government: IMF
Mauritius: Code of Ethics for Civil Servants and Ministers
China (Taiwan): Civil Servant Pension Plan is Still Up in the Air
South Korea: Participatory Government Employs Million-Man Civil Service
   
    Greece: Shaking up the Greek Civil Service
United Kingdom: British Chambers of Commerce Calls for Public Sector Retirement at 65
Malta: MEA Calls for 6% Reduction in Public Service Employment
   
    Canada: Ottawa Confirms Civil-service Overhaul
United States: Civil Service Overhaul Has History of Bipartisan Support
 
   
    Nigeria: 'Why E-Government Has Not Taken Off'
Zimbabwe: State Set to Introduce E-Governance
Kenya: E-Government Plans on Track, Says Kibaki
   
    India: E-governance Plan to be Implemented in All Municipalities
Malaysia: Oracle Establishes E-Governance Centre
India: President Announces New E-governance Initiative
South Korea: Forging E-Government Documents Proves Child's Play
South Korea: American E-Gov Stalls
India: Sweden to Assist India with E-governance Project
South Korea: E-document Forgery Raises Concern
   
    European Union Commissioner Outlines E-inclusion Plans
EU: E-government and Its Limits
United Kingdom: Mainstreaming E-government: Mainstreaming Efficiency
Germany: E-government is Making Progress in Germany
   
    United States: U.S. Tells Nations Hands Off Internet
United States: Government Web Sites Continue Trend of Gradual Improvement in E-Government American Customer Satisfaction Index (ACSI)
   
    World Information Technology Forum Declaration to Be Presented to Unesco
Singapore, Kuwait Sign Second MoU on E-Government
 
   
    Kenya: World Bank Aid Terms Criticized
Malawi: MEJN Intensifies Public Finance Monitoring
Ethiopia: Group to Accelerate Management Reform
Namibia: Government Snubs Teachers
   
    Turkey: Turkish Finance Minister Pledges More Privatization Efforts
   
    Russia: Government Seeks to Bring Inflation Below 11% - Finance Minister
CIS Member-countries' Finance Control Heads Meet in Kishinyov
Hungary: Budget Deficit: Eurostat Adjusts Figures, EU Angry, Finance Ministry Accepts
Bosnia and Herzegovenia: State and Entity Finance Ministers, Central Bank and World Bank Agree on Need to Accelerate Economic Reforms
   
    Lebanon: Finance Minister Insists Lebanon Firm on Reform
   
    United States: Tax Bases Shattered, Gulf Region Faces Debt Crisis
Nevis: Nevis Island Administration Praised for Debt Management Initiative
   
    Global Fund Probe to be Public
Nigeria, Switzerland Hail Return Of Stolen Funds, Say Safe Havens No Longer Exist
 
   
    Nigeria: Firm Gets Presidential Nod on Enterprise e-Governance Solution
Malawi: Official Says House to Review Privatization Law
   
    Philippines: Filipino Water Activists Challenge UN to Denounce Privatization
Pakistan - Public-private partnerships: US Will Continue Assisting Pakistan
Japan: Koizumi Plans Far-reaching Privatisation
Malaysia: Chinese Chamber Proposes Commission to Oversee Privatisation
   
    Serbia and Herzegovenia: Privatisation to Be Completed Early 2007
Ireland: Managed Services in Public and Private Sectors: a TIF Seminar
Greece: Successes and Headaches Alike for Greece in Privatization Drive
Hungary: Concluding Statement of the IMF Mission
EU: The Specific Programmes under the Seventh Framework Programme for Research and Technological Development
   
    Brazil: Brazil Public-private Projects Get Green Light
USA: Fair Returns, Job Creation, Not "Just Charity" Is Path To Success For Business In Developing Economies, Says First-Ever Survey Of Fortune 500s, NGOs and Media
South America: Blocking the Wave of Privatisation of Water
   
    WEF Seeks Greater Business Role in Fighting Poverty
Global Push for Water Privatisation Threatens UN Poverty Targets
 

OECD: China to Become Largest Exporter in Five Years

The Organization of Economic Cooperation and Development (OECD) made a comprehensive assessment of Chinese economy for the first time in its latest report. The report says judging by China's current situation and development it is likely to outpace the US and Germany to become the largest exporter and the fourth largest economic entity in the world. By then goods and service from China would account for 10 percent of international trade volume while the current figure is 6 percent. The OECD makes survey of the economies of its member states every 1.5 years or 2 years and submits its report. China is currently taking part in the organization as an observer.

With the help of the Chinese government the organization for the first time issues its survey report of the Chinese economy. The report says, in the last 20 years or so China's GDP grew at a speed of 9.5 percent annually and this trend is expected to continue for some time to come. Richard Herd, an expert on Chinese economy at the OECD, said the Chinese government is not afraid of reform. The policies it has enacted have had extremely great impact. At the same time the report believes the Chinese economy still has much to improve despite the great changes taking place in the last decades. For example, the imbalance of economic development among different regions and imperfection of the judicial system etc. Although China's economic rise has helped lift the majority of Chinese out of poverty, its per capita income is still relatively low and there are signs that the wealth gap is expanding. The report suggests that in order to eliminate regional wealth gap the government should enact policies to facilitate population flow between the rural and urban regions. However, good corresponding management is necessary in the process.

Regarding China's market reform the report says the Chinese market, though more mature after a series of reform, still has inadequacies and obstacles as far as domestic private businesses are concerned. For example, the strict limitation on access to capital market and banking financial industry, too high capital requirements on starting a business etc. To ensure continued growth raising capital distribution efficiency is the key. The company should be able to raise funds by entering the stock and securities market freely. State-owned shares in a company should be fully tradable so as to considerably improve management of listed companies.

The OECD lavishes praises when speaking of the on-going reform of banking system in China. The report says the cost of the reform, which runs as high as tens of billions of US dollars, is still within manageable range and the effect is very remarkable, since it greatly reduced the bad loan rate in state-owned bank. When it comes to China's exchange rate reform the report says long time adoption of fixed exchange rate system would expose a country's economy to the threat of inflation. Generally speaking, adopting a floating exchange rate system will effectively help control inflation. The report also points out that China's public finance is sound. However, the money the government spends on health care and education is still relatively low. In the next 20 years China will also face the problem of aging population, which means the government should step up effort in reforming the social security system.

From People's Daily Online, China - September 20, 2005

Reform Has Quickened Following Prime Minister's 2005 Instruction

The first phase of the 10-year programme for national administrative reform (2001-2010) ends this year. Viet Nam News Agency discussed its progress with Home Affairs Minister Do Quang Trung. How have administrative reforms progressed so far this year? This year has a special significance in the country's 10-year programme on administrative reforms (2001-2010) since it is the last year of the first five-year plan (2001-2005). At the beginning of the year, the Prime Minister issued instructions on continuing the administrative reforms. Based on those directives, ministries, central and local governments have initiated programmes to accelerate the reform programme. These reforms can be grouped under two categories: institutional reforms and reforming functions of ministries and local governments.

Institutional reforms - To speed up economic reforms, international integration and administrative reforms, the National Assembly (NA) and the Government have issued many policy documents and drafted many new laws and revised some old ones. In the first six months of this year, the Government submitted many important draft laws including the Commercial Law, the Law on Auditing, the Customs Law, the Civil Code, the Law on Education, the Law on Electronic Transactions, the Law on Corruption and the Law for Practising Thrift and Combating Waste to the National Assembly and the Standing Committee of the NA. To facilitate the implementation of these laws, the Government has also issued many guiding documents. All these documents drafted by the Government and the NA are in tune with the country's policies for economic development and international integration.

Reforming governance - One of the successes of the programme in the first half of this year was in revising functions and duties of the Government, ministries and local governments to conform to the market economy. Administrative and business activities of Government organs and agencies have been separated, and functions and duties of civil servants have been outlined clearly to facilitate businesses and enterprises.

What, according to you, are the administrative barriers faced by enterprises and the public in general? Complicated settlement procedures, arrogant attitude of civil servants and bribery are among the common issues faced by enterprises and individuals. But, after the Government issued Decree 38/CP on administrative reforms in 1994, administrative procedures have been streamlined. But many people still complain about authoritarian behaviour of civil servants. In one case, a citizen was forced to go back and forth 30 times to the ward People's Committee to solve a problem. This has to stop.

What have the Government agencies done to make administrative reforms more efficient? In my opinion, the duty of the civil servants is to give clear instructions on procedures to the public and enterprises and help them solve their problems. President Ho Chi Minh once said, "Civil servants are the public servants of the people". The sentence may look very simple, but it is very demanding. The work of civil servants can be categorised into three groups as follows:

First, they have to continue to review and make changes to further simplify administrative procedures as required by the Prime Minister's Decree. Heads of offices and their staff should study the Decree carefully and help enterprises and people with administrative procedures. Secondly, inspection of State administrative offices have to be increased. For example, the inspection conducted recently by the Ministry of Natural Resources and Environment showed that civil servants lacked proper knowledge of the law. Such inspections would help to detect scams and problems faced by the people. And last but not the least, improve the knowledge and strengthen the capacity of civil servants from the central down to the grassroots levels. Competent staff is key to the success of administrative reforms.

From Vietnam Economic Times, Vietnam - September 19, 2005

Government Agencies Use Personal Information to Make Public Policy

Forty-three administrative agencies are found to have established a database of 12.5 million "policy customers" and regularly send e-mails to them to publicize the government's policies. In particular, 18 government agencies have been grading and managing about 6.7 million people's personal information, including e-mail address. According to the report titled, "The Current State of the PIMS (Policy and Issue Management System), for the PCRM (Policy Customer Relationship Management)" submitted by the Government Information Agency for the National Assembly's inspection of the administration to Kim Chung-hwan, the Grand National Party lawmaker in the Culture and Tourism Committee on September 23, the policy customers the 18 government agencies have secured as of the end of July include 581,408 basic customers, 637,572 specific customers and 5,502,618 associated customers.

Basic customers are members who voluntarily subscribe to an "e-mail club" on the websites of government agencies. Specific customers are opinion leaders who are related to each agency's policies, and associated customers are ordinary citizens that affiliated organizations of each government agency or associations have secured. Of the 18 government agencies, the Ministry of Education and Human Resources Development ranked first in terms of the number of customers on the list with 1,594,735 customers, followed by the Ministry of Science and Technology (1,337,162), the Ministry of Commerce, Industry and Energy (888,846), and the Ministry of Health and Welfare (751,091).

Kim argued, "The government is promoting its policies at random by obtaining e-mail addresses without consent of the persons involved. Currently, the Government Information Agency is developing a "Cyber Alarm System," which can collect postings on bulletin boards on the web sites of political parties and civil organizations and replies from major web sites to classify people according to their political leaning. There is a fear that this system could infringe on the public's right to protection of communications information." In response, the head of the Government Information Agency said, "We will make every effort to make sure that there will be no violations of privacy or the right to protection of communications information." An official in the Government Information Agency said, "We are running the Policy Customer Relationship Management (PCRM) program in order to collect public opinion before making policies and to make public government policies well. Since each agency manages the list independently, there can be many overlapping customers, and imaginary numbers of them may be significant."

From Donga, South Korea, by by Yong-Gwan Jung Hyung-June Park - September 23, 2005

 

Public Sector in Policy Dilemma

Local authorities spend about 43pc of their £50billion annual budgets for goods and services with small firms, the first detailed analysis of public procurement has found. The findings undermine claims from business lobby groups that small firms lose out to larger businesses when it comes to bidding for government contracts. It also raises questions over government policy, which is trying to reduce barriers to small firms securing more public sector work while at the same time making public procurement more efficient by cutting the number of firms that local authorities use. This conflict will be highlighted tomorrow when Stephen Timms, the Department of Work & Pensions minister, will warn small firms that they stand to lose public sector work. His message contrasts with that from the Department of Trade and Industry last week, where Alun Michael, the small business minister, launched a report arguing small firms offered the public sector "value for money". "Public procurement opportunities need to be more accessible for small firms," he said.

The ground-breaking statistics on the use of small firms have been compiled by Exor Management Services, which works for 68 local authorities analysing their spending and providing accredited supplier databases. By logging each transaction that 50 local authorities made over the past year, Exor found that 72pc of the 135,015 individual businesses that won work were firms with fewer than 25 staff or were sole traders. The value of the contracts represented 43pc of the £4.89billion the local authorities spent. Larger businesses with more than 250 staff secured 30pc of the available work by value and medium-sized businesses, with between 50 and 249 staff, took the remainder. The figures are based on all the local authority transactions where Exor could confidently identify the supplier.

Prof David Storey, director of the Centre for Small and Medium-Sized Enterprises at Warwick Business School, said the statistics were surprising. "It appears that small firms are getting their share," he said. Trade bodies such as the Federation of Small Businesses have argued that government procurers prefer to work with larger companies. Its latest survey of 18,000 firms suggests the bias may remain true for the very smallest traders. It found that 38pc of businesses with less than £25,000 in annual sales had a local authority as a customer, compared with 65pc of those businesses with sales of more than £1m. These concerns have been taken up by the Small Business Service and the Office of Government Commerce (OGC). In a joint report, Mr Michael said local authority spending was key to supporting "regeneration and providing access for social enterprises and groups who are under-represented in the business community". He added: "The public sector need not miss out on the better value and more innovative approaches small businesses can offer. I urge local authorities to adopt improved procurement practices and to encourage them to reap the benefits of a diverse supplier base."

The OGC is also planning to launch an internet site later this year that will list local and central government contract opportunities. In contrast, Mr Timms, the DWP minister, and officials from the Office of the Deputy Prime Minister, are sending out a different message to small firms. Martin Scarfe, local e-gov national projects programme director, will say tomorrow that small firms without online trading facilities need to face up to the fact that they will lose public-sector work. "Supplier and spend analysis being done for councils across the country suggests that many jobs could be at risk nationally as a result of the cessation or severe curtailment of public sector trade," he says. Local authorities are under pressure to use a smaller number of larger suppliers to cut prices and administrative costs. The cross-government efficiency drive was instigated last year when the Gershon Report's recommendation that £21.5billion could be saved by 2008 was adopted. One of the initiatives is to move local authority procurement online by the end of the year. Mr Timms will say tomorrow a "worrying number" of small firms have failed to set up electronic trading systems so will no longer be able to trade with their public sector customers.

From Telegraph.co.uk, United Kingdom, by Richard Tyler - September 11, 2005

MEPs Pass Resolution on R&D for Neglected Diseases of the Developing World

A resolution calling on the EU to give neglected diseases in developing countries a higher priority in its research programme was passed last week by the European Parliament. John Bowis MEP, health spokesman for the Group of the European People's Party (EPP), gained solid support for his report, which was written in response to a new Commission programme aimed at tackling HIV/AIDS, malaria and TB. The report, adopted at a plenary session in Strasbourg on 8 September, highlights the lack of research that the EU carries out into lesser-known diseases such as sleeping sickness and dengue fever.

Neglected diseases include not only both rare (orphan) diseases and common disorders, mainly communicable, but also a range of other conditions that are major burdens in all countries and for which we have few or no effective remedies. Epidemic influenza, for example, appears annually and causes as many as a million deaths each year worldwide, while influenza pandemics occur every few decades with much more devastating consequences. So far, the pharmaceutical industry has been unable to meet the needs of people with neglected diseases, as often the potential returns for shareholders are unclear. Even if the industry continues to play a major part in the discovery and development of drugs, a much greater pluralism in both the funding and discovery of novel treatments is needed, according to the resolution.

'The European Union is right to be addressing HIV, TB and malaria in the developing world, but there are many other diseases that also merit attention,' says Mr Bowis. The report calls for urgent action to develop new drugs and to make them available to developing countries at affordable prices. It also draws attention to the rapidly increasing number of cases of mental illness in many developing countries. Cost-effective treatments exist for most of these disorders but appropriate mental health legislation, treatment and community care are not the priorities that they should be. 'Health systems in the developing world need a great deal more investment to cope with these diseases but the EU must also give these diseases the attention they deserve when it publishes its priorities for research and development,' argues the report. 'The international community must live up to its responsibilities and intensify work on improving treatments for diseases which are killing millions of people in poor countries.'

Between 1975 and 1999 less than one per cent of new drugs placed on the market were developed for infectious tropical diseases. Patients suffering from parasitic infections such as trachoma or potentially fatal leishmaniasis are often given archaic drugs which can be highly toxic, ineffective or difficult to administer. The Parliament resolution, tabled by the development committee, calls on the Commission to increase the amount of funding available for biomedical research into poverty-related diseases such as malaria and TB, and for specific reference to be made in the Seventh Framework Programme (FP7) on funding for research into these diseases.

The European Parliament, which wants the umbrella term of neglected diseases to be widened beyond HIV/AIDS, malaria and TB, also calls on the Commission to strengthen the capacity of developing countries to conduct both clinical trials and operational and health systems research. The needs of women, children and disabled people must, it argues, be mainstreamed into health policies and related research. Given the lack of obvious profitability for companies in this field, the report calls for the pharmaceutical industry to be obliged, or offered incentives, to reinvest a percentage of its profits into neglected disease R&D. The resolution recommends establishing a new global medical R&D treaty and incorporating technology transfer into development policies.

This is not the first time that the EU has advocated such an approach: in the run up to the Dutch EU Presidency, the Dutch government commissioned the World Health Organization to develop an EU research agenda based on public health needs for priority medicines. The report, Priority Medicines for Europe and the World Project: 'A public health approach to innovation', was published last November and covers a wide range of critical issues, making many far-reaching research proposals for the European Union.

The resolution coincided with the publication of a new report by a team from the London School of Economics Health and Social Care research centre, led by Dr Mary Moran. It argues that a profound change in research into ten so-called 'neglected diseases', including malaria, tuberculosis (TB), leprosy and sleeping sickness, could result in at least eight new drugs being developed by 2010. Moreover, the report highlights that around three-quarters of these research projects are being conducted under the umbrella of public-private partnerships, demonstrating that PPPs have been a critical driver of this considerable increase in activity, and recommending that policy makers should support them when it comes to neglected disease research and development.

From PR Newswire (press release), NY - September 13, 2005

Concluding Statement of the IMF Mission

In the following you find the uncut version of the International Monetary Fund's concluding statement, describing the preliminary findings of IMF staff at the conclusion of certain missions (official staff visits, in most cases to member countries).

Though the private sector has demonstrated flexibility and resourcefulness, fiscal policy weaknesses are raising risk levels - procrastination is no longer a policy option. Over the last decade, the economy has dealt successfully with global competition, engineering a commendable shift to a more high-tech production structure. However, Hungary has moved from being a "star" performer to one of the slower growing economies among the new EU member states. Significant policy weaknesses have emerged in recent years - in particular, the lack of predictability of the fiscal budget and the persistence of high fiscal and current account deficits. A benign international financial environment has ensured the financing of these deficits. But Hungary's domestic currency risk premium remains high relative to other countries in the region. With the 2005 fiscal deficit target to be imminently missed and the substantial challenges for 2006, the risks have increased.

Short-run macro developments have been welcome, though vulnerabilities remain. Following weak performance in the previous three quarters, growth finally picked up in the second quarter this year. Export growth remained solid. The composition of growth has become more balanced. Inflation reached historical lows. Downside risks to GDP growth arise from the increase in the price of oil, continued slow growth in the euro area, and the planned increases in the minimum wage. We expect growth to be 3.4 percent in 2005, increasing to 3.6 percent in 2006. The current account deficit, projected at about 8 percent of GDP in 2005, could be larger if accession-related procedural changes led to a underreporting of imports. The financing of this deficit will be helped by the increased availability of EU funds, but remains crucially dependent on continued investor confidence in Hungarian economic prospects. And with almost all new net domestic lending to the private sector occurring in foreign currencies, the macroeconomic risks from an exchange rate correction have increased. The strong financial system, however, can withstand such a correction.

Three factors highlight the continued erosion of fiscal discipline. First, revisions reveal that the fiscal consolidation in 2004 was smaller than originally thought. Second, reflecting the difficult political environment, even the modest momentum for fiscal reform in 2004 was not continued in 2005, and the focus, unfortunately, shifted towards accounting measures to achieve budgetary targets. This shift was reinforced in June to deal with the slippages in the earlier part of the year. Despite that, the government's 2005 fiscal deficit target under the Convergence Program will not be met, especially in light of Eurostat's recent rejection of the underlying accounting approach to reach that goal. Containing the fiscal stimulus, which is not directly influenced by the Eurostat decision, will depend crucially on the realization of the unusually large projected surplus in December. Third, the announced 2006 budget plans, which propose a 1½ percent of GDP expenditure consolidation, do not appear to come to grips with the seriousness of the problem, either in the extent of the consolidation needed or in the quality of the adjustment proposed.

Even if politically difficult, an appropriately ambitious and consciously transparent budget framework must be reestablished. With the fiscal challenge set to increase next year, debt dynamics could turn adverse. To prevent this unfortunate outcome, urgent action is needed, accompanied by the setting of a realistic fiscal deficit trajectory for the Convergence Program and euro adoption. Transparency and candid communication, based on realistic targets, will help avoid destabilizing surprises, while improving budgetary controls.

A new strategy for durable and credible consolidation in 2006 requires sizable expenditure cuts, in part to make room for the planned tax reduction. Bold steps are necessary to limit and rationalize public expenditures, in the areas of public employment, health, education, pensions, the housing subsidy scheme, and subsidies to enterprises. While the proposed tax reduction initiative can be a spur to investment and growth, it could be ill-timed if it is not accompanied by expenditure reduction to achieve revenue neutrality. Further tax reform possibilities should be based on a comprehensive assessment to ensure long-term gains - reforms driven by short-term political competition could prove counterproductive. Broadening the tax base by reducing exemptions should be a priority. In this context, a tax expenditure budget, which assesses revenue losses due to all current tax exemptions, is an important first step.

Greater transparency and accountability are needed to increase fiscal control. We welcome the Eurostat decision uncovering the recourse to accounting measures for reducing the deficit, which was becoming endemic. Greater transparency in fiscal reporting is required in light of the still large divergence between cash and accrual budgets. Also of concern is the limited effectiveness of internal controls to contain the deficit. Independent review of budget projections through, for example, the State Audit Office, can enhance accountability, if the remit of this office were appropriately extended. A full accounting of the various Public Private Partnerships, with a ready basis to determine their operational status and the government's direct and contingent liabilities, has now become essential. A system is urgently needed for predicting and managing expenditures that do not have nominal caps. Similarly, when reserves are set aside to manage budgetary contingencies, they should be freed only in line with clear expenditure priorities.

This is an opportune moment to consider a move to a floating exchange rate regime. The authorities have remained committed to the exchange rate band even in adverse circumstances - and remain so committed. However, a risk management perspective suggests that this is a good time to consider a move towards exchange rate flexibility. First, with favorable market conditions and strong investor confidence in Hungary, the forint has held steady in a narrow range for the past 18 months, with no evident pressure either upwards or downwards. A move towards exchange rate flexibility now, in times of calm global markets, would be desirable. While short-term upward or downward pressures may ensue, exit from the current position of strength is likely to limit prolonged destabilization. Instead, if global imbalances unwind, Hungary could get caught in the tailwinds of that adjustment, as currencies and interest rates are realigned. These external developments would interact with domestic vulnerabilities in important and potentially unpredictable ways. Second, with the decline in inflation, the current exchange rate band is no longer relevant as a monetary policy anchor; if anything, its presence interferes with the operation of the inflation targeting anchor. Moreover, the possibility of euro adoption by 2010 appears remote and, hence, the ERM-II like framework will not be relevant for some years. Finally, the perception of greater exchange rate volatility will help stem unhedged foreign currency borrowing.

Overall, the stance of interest rate policy seems appropriate. Since the VAT-induced decline in the 2006 inflation rate is expected to be temporary, further interest rate reductions should be guided by inflation projections for 2007. The authorities recognize this - as reflected also in their adoption of a medium-term framework that targets inflation 5 to 8 quarters ahead. However, market commentary has been more aggressively projecting interest rate cuts to match the temporary decline in inflation in 2006. While disinflation may continue, this cannot be presumed. Further interest rate reductions should be based on the medium-term evolution of inflation projections and expectations.

***
The Hungarian economy has many real strengths. Consistent and predictable policies will enhance these strengths. Decisions taken now will determine if the full potential is realized. The mission wishes the authorities well in their endeavors and thanks them and many others for their warm hospitality and candid discussions.

From Portfolio.hu, Hungary - September 22, 2005

SACO Conference on Globalisation

SACO, the Swedish Confederation of academic trade unions, held a major conference on globalisation near Stockholm on 8-9 September. Three of SACO's 26 member organisations are affiliated to UNI: the trade unions for engineers, economists and Jusek (organisation for graduates in law, business administration, computer and social sciences). UNI's Head for P&MS, G. Rohde, gave a presentation on globalisation and offshore outsourcing. He referred to UNI's MOOS project and said that offshore outsourcing will affect many low and medium skilled service sector jobs. Europe's future will be in higher skills and higher value adding services. He emphasised the need for Europe to invest more its human resources, spend more on students in tertiary education and stressed the urgency for a massive lifelong learning campaign supported by the trade unions.

From Union Network International, World - September 26, 2005

 

United Kingdom Cuts Through World Bank Spin on Conditionality

The business-as-usual findings emerging from a Bank review of conditionality released late July have been challenged by the British government and are contradicted by the findings of a study by Irish NGO Debt and Development Coalition.

The big question: Is the number of conditions up or down? The Bank's review finds that "the average number of conditions fell from 35 in the late 80s to about 12 in FY05", conceding however that "benchmarks have increased from about 15 in the early 90s to 24 in the last two years". This requires some explanation. The World Bank's conditionality zoo includes three different animals. 'Prior actions' are reforms which must be completed before any money is handed over. 'Triggers' include reforms which must be undertaken during the course of a lending programme to qualify for a subsequent programme. The Bank only considers these two as 'conditions'. However, 'benchmarks', while not directly tied to the release of funds, can lead to a suspension of payments if 'satisfactory progress' is not being made in implementing them. In practice, even the Bank admits that its "distinction in the role of conditions and benchmarks is sometimes lost on borrowers". Seventy-five per cent of authorities responding to a Bank survey on conditionality did not make any distinction between the different types of conditions.

A study by Debt and Development Coalition Ireland (DDCI) on the World Bank's loans to low-income countries finds that the distinction between these different conditions is further blurred by the process by which governments move from 'base-case' to 'high-case' lending scenarios. The World Bank links completion of all types of conditions - including benchmarks - to access to increased grants or loans, "giving additional incentive to the government to implement the conditions". DDCI argues that the vagueness of the Bank's distinction between different conditions has made a mockery of the notion of 'criticality' - a recent commitment on the part of the Bank that "conditions should be confined to those actions that are critical for implementing the country's programme to achieve the expected results." The more benchmarks that are applied argues DDCI, "the less clarity there is and the more subjective become disbursement decisions", adding that "the continued use of a large number of benchmarks suggests that the Bank is keen to continue micromanaging the reform process."

This critique is reinforced by the British government in its response to the conditionality review. UK secretary of state for international development, Hilary Benn, calls on the Bank to "clarify how it intends to reverse the trend of increasingly large and complex sets of policy actions", adding that there should be a "clear statement setting out the strict limited circumstances when the Bank might use sensitive policy actions as triggers or benchmarks". The statement "should expand on how actions deemed 'critical' to achieving the objectives of the programme are to be determined in practice."

We are the 'owners', you are the 'ship' - In its review, the Bank defines ownership as "a high probability that the policy will be adopted and implemented, even if there is internal opposition." The UK response to this circumscribed definition is worth quoting at length: "it is not enough for there to be a high probability of the policy reform being implemented to warrant ownership. That is necessary, but it is not sufficient. Countries need space to formulate policy, consider the options, and build broad-based support for the path they will take. We should seek to understand the choices that governments make in the light of the political economy they face. We must ensure that in our discussions with countries, we do not crowd out space for domestic stakeholders, especially elected representatives, and support processes that strengthen accountability." Bank survey results confirm the UK's conclusion that the Bank's definition of ownership is insufficient: "50 per cent of respondents felt that the Bank introduced elements that were not part of the country's programme"; "37 per cent said that negotiations with the World Bank significantly modified their original policy programme."

The Bank review argues that the content of conditions have "shifted from short-term economic adjustment (including privatisation) and trade to medium-term public sector governance and social sectors reforms." The study by DDCI is less sanguine about this shift. It finds that only two out of thirteen Bank programmes studied did not include conditionality requiring privatisation of government enterprises or public-private partnerships. In several cases, this was despite the fact that "there was no explicit mention of privatisation or public-private partnerships" in the national development strategy.

Both DDCI and the British government argue that the Bank needs to greatly improve its use of 'poverty and social impact assessments' (PSIA). Repeating what has been found in earlier studies by the Bank's Operations Evaluation Department, the DDCI study finds that "in most cases, PSIA is being conducted once a reform has been decided upon, rather than facilitating debate and decision-making between various reforms." Hilary Benn has asked for the Bank to ensure that reforms "have been informed by analysis of the political, economic, social and poverty impact of these policy changes". The conditionality review will go to the Bank board for discussion 1 September. If accepted, it will be presented to the board of governors at the annual meetings at the end of the month. Brussels-based NGO Eurodad is planning a detailed analysis of the entire set of Bank background papers which informed the review, and a workshop on conditionality and aid at the annual meetings in Washington.

From Bretton Woods Project, UK - September 13, 2005

IMF and World Bank Use of Conditions under the Microscope

Responding to stinging criticism from civil society and the Commission for Africa, the IMF and the Bank are under pressure for a fundamental rethinking of the use of conditionality. The results of a series of ongoing evaluations will be critical. In March, the report of the Commission for Africa called on the Bank and Fund to "micro-manage less and reduce the amount of conditions they place on poor countries". The report's authors blamed the Bank and Fund for taking "little account" of how their policies would impact on poor people in Africa. The Fund was singled out for applying "analytically unfounded fiscal rules". The criticism echoed that coming from NGO ActionAid's analysis of the detrimental impacts of IMF fiscal restraints on spending on HIV/AIDS and education (see Update issues 43, 44).

Evaluation of IMF use of structural conditions - In response to widespread charges that IMF conditionality had become intrusive, confusing and often inappropriate, the Fund first initiated a streamlining exercise in 2000. In September 2002, the board approved a new set of guidelines on conditionality which marked a shift from a test of "relevance" to a stricter one of "criticality for the achievement of programme objectives". Most civil society observers felt the new guidelines did not go far enough, warning that IMF conditions might simply be moved to Bank agreements, and decrying the failure to address deeper problems concerning the content of IMF policies and the nature of the Fund's relations with borrowing governments.

Just over two years later, the Fund is undertaking an internal assessment of the experience with the 2002 conditionality guidelines, and the IEO has announced an evaluation of structural conditionality. While the former will examine the whole range of Fund conditions, the latter will limit itself to 'structural conditions' - those involving changes in policy processes, legislation and institutional reforms. The IEO has proposed dividing its evaluation into two stages. The first stage will look at programme design while the second will look at whether structural conditionality has been effective. Under programme design, questions to be addressed include:

Do negotiations leave enough 'policy space' to the authorities? What is the role of other stakeholders in the negotiation process? Has streamlining led to meaningful changes in the interaction between IMF staff and national authorities? What has happened to aggregate conditionality (the combined effect of World Bank and IMF conditions)? Under the effectiveness of structural conditionality, questions to be addressed include:

Have governments complied with structural conditionality? Has compliance led to improved policies, institutions or economic performance?
Are outcomes-based conditions more effective than process-based conditions? What is the experience in controversial areas such as privatisation and liberalisation?

The evaluation will follow up on issues left unanswered in last year's evaluation of the IMF's lending for PRSPs. That evaluation was inconclusive on whether Fund conditionality had been reduced following streamlining efforts, and highlighted a general failure to explore alternative macro-economic policy options. The evaluation will rely on statistical analysis of Fund and Bank databases on conditionality, 12 - 14 country case studies and stakeholder surveys. Comments on the draft issues paper can be sent to the IEObefore 1 May.

Bank evaluation - Begrudgingly following the IMF's lead, the Bank kicked off its review of conditionality July 2004 in Paris at a conference entitled Conditionality Revisited (see Update 40). A consultation process was started in December 2004 and is scheduled to conclude in June. In February, civil society organisations from Europe met with the Bank in Paris to discuss a conditionality issues note.

Participants expressed concern that the issues paper focused too narrowly on adjustment lending, pointing out that conditions may appear in investment loans or as 'desired policy actions'. Aggregate conditionality of the Fund and the Bank remained a concern, as did the use of conditions in fragile states, and the transformation of policy scorecards such as the Country Policy and Institutional Assessment in to a form of "mega-conditionality" (see at issue). Bank staff present, including Jan Walliser and John Mitchell of Operations Policy and Country Services, indicated that a number of forthcoming papers would be addressing these concerns, including an IMF paper addressing the issue of aggregate conditionality to be released at the spring meetings.

A consultation in Germany in early April focused on the role of conditionality in policy-based lending. A further consultation is planned for the spring meetings of the Bank and Fund which will include CSOs and middle and low-income country governments. Comments received during the consultations and background papers are to form the basis for the policy paper that will be considered by the board at the annual meetings 2005. Send comments on the Bank's review of conditionality.

From Bretton Woods Project, UK - September 13, 2005

Globalisation Most Important Force in World Economy: IMF

Asserting that globalisation was the most important force in the world economy, the International Monetary Fund (IMF), however, admitted that problems remain in the integration of goods and services markets, pointing to the rise of IT services in India. "Real sector globalisation - the transfer of goods, services, technology and production chains across countries - has brought enormous benefits in terms of growth and economic efficiency," Fund Managing Director Rodrigo de Rato said in a note to members in Washington on Thursday.

However, problems existed in integrating markets, he said, pointing to the rise of information technology in India and China's dominant position in textiles. "The difficulties associated with the integration of goods and services markets cuts across the membership. Chinese efficiency in textiles affects producers in developed and developing countries alike, as does the rise of information and technology services in India," Rato said. Rato said financial globalisation was even more advanced in allocating world savings to more productive and diversified investments.

Pointing to the downside of financial globalisation, Rato said the integration of capital markets had increased the size, speed and reach of shocks across mature and emerging market countries. "While new financing modalities have become available, there have been calls for an even wider menu. Thus, many emerging-market countries see an unmet need for insurance against large and volatile capital flows," he said.

From Hindustan Times, India - September 22, 2005

Make Globalisation Process Fairer and More Equitable: Natwar

United Nations - Expressing disappointment over failure of the "Outcome Document" adopted at the world leaders' summit to address major concerns of the developing world, India has called for making the process of globalisation "fairer and more equitable. " Addressing the United Nations General Assembly on Monday, the External Affairs Minister, Mr K Natwar Singh, called for strengthening efforts at both national and international levels for "taking us closer to the development targets set in the Millennium declaration five years go." Unfortunately, he said, most developing countries will not be able to achieve the Millennium Development Goals (MDGs) at the current level of their growth and international support.

Stressing that MDGs embody a quantifiable vision of human dignity and social and economic goals, Mr Singh regretted that important objectives, such as employment, which is critical for developing countries, and commitment by the rich to meet the goal of increasing the development assistance to 0.7 per cent of their GDP, are missing. "This is equally true of innovative sources of financing," he said, stressing that developing countries cannot break out of the circle of poverty without enhanced resource flows and application of science and technology to meet their development challenges.

From Hindu Business Line, India - September 19, 2005

World Bank Shifts Focus from Growth to Economic Equity

Breaking with long-held tradition, the World Bank has shifted its focus, encouraging countries to make economic equity a primary objective of their economic development, along with growth. The bank's move to embrace notions of empowering the poor has also helped appease its critics among the anti-globalization movement. Its World Development Report 2006, published last week, rules that inequality within countries as well as between countries across the globe has become a major impediment to economic development and to the well-being of societies. The report dismissed the widely held belief among developmental economists that there existed a trade-off between growth and equity, or between economic efficiency and equality.

The World Bank is one of the major global institutions, along with the International Monetary Fund, which have been pushing for the globalization of the world economy. Both are based in Washington and are largely controlled by the United States as their major shareholder. Former U.S. ambassador to Indonesia Paul Wolfowitz, who moved to head the bank in April, is considered a member of President George Bush's inner circle.

Has the World Bank gone socialist all of a sudden? "No. Socialism is concerned with outcomes, while our report is more concerned with processes," Michael Woolcock, one of the authors of the report, said at a briefing for the Indonesian media on Monday. The report was officially launched in Indonesia following its unveiling in Washington last week. Woolcock said the shift in focus to equity reflected the change in the way the bank's economists are looking at global economic problems.

Why should equity matter for development? "... The primary focus of this report is on the instrumental relationship between equity and development, with particular emphasis on two channels: the effects of unequal opportunities when markets are imperfect, and the consequences of inequity for the quality of institutions a society develops." The anti-globalization movement has long criticized the failure of major financial institutions to address the negative aspects of globalization, particularly the growing gap between the poor and the rich, within and between countries. The World Bank's latest annual report, however, does not call for a slowing down of economic globalization. If anything, it reaffirms earlier calls for countries to play by the principles of the free market, which underpin globalization, as they pursue the equity objective.

The report uses the example of two South African children born on the same day in 2000. One is a black girl born to a poor family, and the other a white boy born to a wealthy family. The report tries to project their respective paths, the challenges they face as they grow up into adults and it came to the conclusion that "the opportunities these two children face to reach their full human potential are vastly different from the outset, through no fault of their own." The black South African girl, for example, faces a higher chance of dying in her first year, lower life expectancy, far shorter formal schooling, has less access to clean water, sanitation and good schools. When the children become adults, she will have less access to credit. The World Bank says many people are born into what it calls "inequality traps" set up through the interaction of political, economic and sociocultural inequalities.

While recognizing that the problems are "institutional" in nature, the bank refrained from prescribing total reforms or overhauls of the economic, social and political systems of countries to make growth and equity objectives compatible. Tamar Manuelyan Atinc, another member of the team that wrote the report, told the briefing that changes should come at the initiatives of the peoples in those countries, and that the report could be used as a basis for discussion as countries sought to find appropriate ways to promote economic growth and equity.

Are there models to emulate? Woolcock and Atinc cited Chile in South America, Singapore and South Korea in Asia and Nordic countries, particularly Finland, as model countries that have been most successful in pursuing the double goals of development: growth and equity. (The full report can be downloaded from the World Bank's website http://econ.worldbank.org/wdr/wdr2006/).

From Jakarta Post, Indonesia, by Endy M. Bayuni of The Jakarta Post, Jakarta - September 27, 2005

 
 

African Programme of Action to Counter Crime, Insecurity and Corruption Endorsed

Press Release - United Nations Office on Drugs and Crime - A landmark Round Table of senior state officials and policy makers from African countries, hosted by the Government of Nigeria and organized in association with the United Nations Office on Drugs and Crime (UNODC), closed with participants achieving consensus on endorsing a comprehensive Programme of Action to tackle crime, insecurity and corruption on the continent.

In a message read on his behalf by the Minister of Justice of Nigeria, Chief Bayo Ojo San, at the opening of the meeting, Nigeria's President Olusegun Obasanjo emphasized that "Crime and drugs constitute a threat to democratic governance, the rule of law and the free exercise of human rights in Africa". In a video message to the Round Table, United Nations Secretary-General, Kofi Annan emphasized that "Africa's problems - poverty, diseases, environmental degradation - make its people even more vulnerable to crime".

The five-year Programme of Action endorsed by the Round Table, the implementation of which will begin on 1 January 2006, contains a detailed set of priority areas and actions across a number of sectors, including rule of law and criminal justice reform, organized and violent crime, trafficking in human beings, money-laundering, terrorism and corruption. Antonio Maria Costa, Executive Director UNODC, underscored the comprehensive nature of the Programme of Action, that will involve a wide range of actors across Africa, and that it is action-oriented and time bound, in his closing remarks to the meeting. Mr. Costa urged African leaders and G8 nations to reaffirm the Programme's value at the World Summit 2005 to be held in New York, 14-16 September 2005. It is also intended that the Programme of Action be presented to the next summit of the African Union.

Mr. Costa emphasized that while political commitment to the implementation of the Programme of Action was critical, the dedication of resources, both from African governments as well as from development and donor partners was critical to ensure its success. The Round Table was attended by senior officials from 50 African countries, including 14 Ministers as well as representatives of donor countries, international financial institutions, development agencies and non-governmental organizations.

From AllAfrica.com, Africa, by The Times of Zambia, 14 June 2004

Nigeria's Audit System Encourages Corruption - World Bank

The World Bank Country Director in Nigeria, Mr. Hafeez Ghanem has said that Nigeria's audit system has so many weaknesses hence it provides an avenue for corruption and financial mismanagement to thrive at all levels of governments. Mr. Ghanem was represented by Greg Ezekwu, a Wor-ld Bank official, at the International Conference on Public Audit and Accountability reforms in Abuja on Monday, where he pointed out that there is every need to re-draft the country's audit laws, which were made in 1966, so that modern principles and techniques of auditing will form part of the provisions of the law. According to him, "we have moved around various states of Nigeria and have found that there are weaknesses in their audit systems". Mr. Ghanem added that the World Bank is interested in every country's audit and accounting systems, pointing out that reforms in these key areas will promote transpar-ency and proper management of resources.

In his address, President Olusegun Obasanjo who was represented by Rtd Col. Musa Mohammed, Minister of Intergovernmental Affairs and Special Duties, said "the globalised world in which we live today has become hostile to corrupt nations and their citizens. The first conside-ration in receiving support or assistance from the interna-tional community today is the level of corruption in that cou-ntry. The implication is that we have no choice but to change our ways." He charged auditors general in the country to employ professionalism in the course of doing their jobs as a way of making corruption unattractive both in the public and private sectors of the economy. He further called on them to come up with practical recommendations on how to improve the nation's audit system by drawing up an audit reform agenda. In his address, Senate President, Ken Nnamani who was represented by Senator Daniel Saror said poverty in Nigeria can directly be attributed to corruption which occurs largely due to inefficient auditing.

From AllAfrica.com, Africa, by Anas A. Galadima of Daily Trust, Abuja - September 7, 2005

Kenya Says It Is Swamped by Past Corruption Cases

Nairobi - Kenya's anti-corruption bodies are overwhelmed by the number of cases they are investigating, especially those alleged to have been committed under previous governments, a minister said on Monday. "It is my considered view that time has come for us to deal with present and future corruption, which I think we have the capacity to deal with," Minister for Justice and Constitutional Affairs Kiraitu Murungi said. However, he declared: "Investigating, prosecuting and punishing past corruption is becoming an almost impossible task." He was speaking at a conference attended by government officials, representatives from the donor community, the World Bank and the International Monetary Fund to review Kenya's governance action plan promised at a conference in April. President Mwai Kibaki came to power in late 2002 vowing to eradicate graft and improve governance. However, critics, including international donors, say he has not done enough and those implicated in graft have not been punished.

Kenya, east Africa's biggest economy, suffered badly as official corruption thrived during former President Daniel arap Moi's 24-year rule. Murungi was quick to say that the government had ruled out a blanket amnesty for those implicated, but would pursue selected cases. "We could also consider selected prosecutions for only the most blatant corruption, economic crimes committed during the period before we came to power," he said. Amnesty is a controversial issue in Kenya where many have demanded that those who stole public funds be forced to pay them back. Murungi said the time had come for the government to consider the option of restitution for all corruptly obtained property.

He said that, although the government had taken many senior public servants to court to answer corruption charges, the accused were taking advantage of loopholes in court procedures to prolong the cases. "The result is that many cases filed against seven permanent secretaries, a former cabinet minister and many heads of para-statal organisations have been pending in court for more than two years now," Murungi said. Murungi said the government was going to hire more magistrates and prosecutors and retrain those already working.

From Reuters AlertNet, UK, by George Obulutsa - September 12, 2005

Liberia Agrees to International Anti-Corruption Oversight

Liberia's transitional government has agreed to allow international organizations to oversee the country's future financial deals as part of the government's anti-corruption campaign. The move allays concern in Liberia that the international community will disengage from Liberia after elections. Liberian Information Minister William Allen said Wednesday that the transitional government had signed an anti-corruption document as part of a financial assistance plan for the country. The plan known as GEMAP will also give international officials the power to supervise how the government's revenue is collected and how major projects are financed. The interim government, led by Chairman Gyude Bryant, has been accused of rampant corruption and Mr. Bryant reportedly refused to sign the financial assistance plan at first. He has denied any wrongdoing and says his government has been working for the welfare of the people.

The new plan ties international assistance to good government management. Mr. Allen said that the anti-corruption text will be renegotiated after 36 months, but will affect the new government which will be elected on October 11. A representative from the World Bank's West Africa office, Mats Karlsson, said that the plan is innovative and allows international supervision of government contracts in areas such as customs and maritime resources. "We are agreeing on an arrangement that would create a situation where we [become] partners to Liberia's transformation and future would be working with the sovereign government of Liberia to make sure that funds are used properly," he said. Mr. Karlsson said the Liberian Central Bank would be subject to international oversight, similar to that in other countries evolving out of conflict, or newly independent nations. The plan relieves some of the fears that Liberia could slide back into civil war if corruption is not dealt with. The poorly developed country has vast resources of diamonds and timber, squandered by generations of leaders through endemic corruption.

A recent report on Liberia by the Brussels-based research center, the International Crisis Group, advocates international involvement in revenue collection. The head of its Africa program, Baldo Suleiman, says that is the only way to be sure money in state coffers will go towards development. "The international community has been pushing for a government and economic assistance program which calls for the transparency and for the takeover of the collection of revenue of the state by international actors like the United Nations." The International Crisis Group report also stated there was room for optimism in the country devastated by more than a decade of civil war. The report said that elections were on track and refugees continue to return home. It recommended that the new government reform the Liberian judicial system and take measures to decentralize power as soon as it was elected.

A writer and researcher on Liberia at the Leiden Africa Studies Center in the Netherlands, Stephen Ellis, says that even a model president will not be able to ensure stability in the country by himself. Mr. Ellis says the United Nations must not scale down its operation after elections. "The international community would be making a big mistake in my view, if they regard a successful election on the 11th of October as being a signal that the U.N mission can start to draw down, and that Liberia is well on the way to solving its own problems. It all needs to be looked at in a much longer time frame," Mr. Ellis said. The U.N. mission in Liberia, with approximately 15,000 peacekeepers, is one of the world's largest. The United Nations has been in charge of demobilizing and disarming former combatants and is helping the government with security for the October elections. Liberia's last elections in 1997, in which Charles Taylor won the presidency, did not bring peace to Liberia. Civil war resumed and continued until 2003 when Charles Taylor was forced into exile.

From Voice of America, by Gabi Menezes (Abidjan) - September 15, 2005

Akanbi Reels Out Causes of Corruption in Nigeria

Abuja - Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC) , Justice Mustapha Akanbi yesterday fingered four major reasons why corruption became so deep-rooted and endemic in the public life that Nigeria was controversially rated the third most corrupt in the globe. Justice Akanbi spoke yesterday in Abuja on the corruption status of the country before 1999 and now. The venue was the Conference Hall of the ICPC Headquarters, Abuja while the occasion was the opening ceremony of a one-day interactive seminar which its main focus was "Fighting Corruption: The Stakeholders Perspective"

Reeling out the causes of corruption in the country, yesterday, the retired jurist said that lack of political will to fight graft on the part of past successive military leaders and inconsistency in government policies with their implementations formed the basis while reluctance by the nation's law enforcement agencies to arrest and prosecute some "sacred cows" encouraged its widespread.

His exact words: "the question is: why did previous efforts at tackling corruption fail? My belief is that past regimes did not manifest the strong political will so vital for any successful effort at combating the menace of corruption. "There was inconsistency in the implementation of the ad-hoc measures put in place and the efforts of one or two military administrations to tackle the problems head on were thwarted by successive regimes who never saw corruption as anything serious, worthy of their attention. "Instead, they adopted a cosmetic approach in dealing with the issue. Mirabile Dictu, a successor regime returned seized properties to their owners even though such owners were divested of the properties on the grounds that they acquired them illegally and corruptly.

"Secondly, for almost about two decades, Nigerians kept talking about corruption yet no one was being prosecuted for corruption in any of the superior court of record. "The lethargy on the part of the law enforcement agencies or the authourities in dealing with issues,cases of corruption gave the criminally-minded corruptees and their cohorts a field day and encouraged them to continue to amass ill-gotten wealth at the expense of the nation," he said. Added he: "corruption has been described as a cankerworm, a malaise that has afflicted our nation and done havoc to our corporate existence. "Corruption is endemic, pandemic and systemic and several efforts made in the past to check its onslaught had defied solution. "The many adhoc measures to combat it, put in place by various military regimes failed to yield results or change the attitude and minds of purveyors of corruption who see it as a way of life.

"The result was that the international community continued to stigmatise us as a people without any ethical or moral values and without qualms. Thus Nigeria became a pariah nation and Nigerians were treated as such and exposed to all sorts of indignities at border posts in foreign lands," he added. Justice Akanbi said that this was what propelled President Obasanjo administration to promulgate the ICPC Act 2000 which he said is yielding results. Said he: "the present anti corruption act 2000 is unique in more ways than one. Unlike the two penal laws, the Act goes beyond criminalizing corruption and related offences and enforcement as it imposes an obligation on the commission to educate the public against bribery and corruption and to enlist and foster public support in combating corruption.

From AllAfrica.com, Africa, by By Ise-Oluwa Ige &Dayo Lawal - September 16, 2005

Akanbi Explains Past Leaders' Inability to Fight Corruption

Justice Mustapha Akanbi, chairman of the Independent Corrupt Practices and other Related Offences Commission (ICPC), has identified some of the reasons that hampered past regimes from fighting corruption successfully. He said this yesterday in his opening speech at a one day interactive seminar on the theme "Fighting Corruption; The stakeholders Perspective" at the commission's head office. Akanbi listed among other things the inability of past regimes to prosecute any important Nigerian for corrupt acts as accounting for the indifference of Nigerians to corruption.

Furthermore, he cited the unseriousness on the part of the various law enforcement agencies or authorities in dealing with repeated cases of corruption as another major reason. He said past regimes did not manifest the strong people's will that is so vital for any successful effort to combat the menace of corruption. In his words, "there was inconsistency in the implementation of the ad-hoc measures put in place and the efforts of one or two military administrations to tackle the problems head on were thwarted by the successive regimes who never saw corruption as anything serious or worthy of attention". Continuing, he said, "instead, they adopted a cosmetic approach to deal with the issue, a successor regime would return seized properties to their owners even though such owners were divested of the properties on the grounds that they were acquired illegally or corruptly.

Akanbi observed that it was this unseriousness coupled with the fact that it was part of President Obasanjo's manifesto that necessitated the promulgation of the Corrupt Practices and other Related Offences Act on June 30, 2000 and later the establishment of the Independent Corrupt Practices Commission in September, 2000,

On the part of the participants/stakeholders who were divided into groups for effective interactions, they listed as reasons for corruption, greed, poverty, bad governance etc and also proffered solutions to them with the promise that they would go back to their respective agencies to implement them. Participating agencies included the Nigeria Customs, Immigrations, National Drug Law Enforcement Agency, Road Safety, Vehicle Inspecting Officers, various non governmental agencies etc. The Nigeria police were however conspicuously absent.

From AllAfrica.com, Africa, by Daily Trust (Abuja) - September 16, 2005

Wealth declaration: MPs, Public Servants to be Charged

Sixty-five Members of Parliament and Five Electoral Commissioners are among those who could be arrested and prosecuted next week for contravening Public Officers' Ethics 2003 which calls on public officers to declare their wealth. According to a report released by the Efficiency Monitoring Unit, only employees of Public Service Commission, Higher Education and Judicial Service Commission had fully complied with the Act. Other institutions like the Central Bank of Kenya has Five officers who have not complied. No employee of the Consolidated Bank of Kenya had submitted forms by December last year. Also contravening the Act were councillors of local authorities of whom 390 had not submitted the forms after the deadline.

In Co-operative societies, it was noted that the Kenya Planters Co-operative Union had not submitted the forms to the commission since the enactment of the Act in 2003. The head of efficiency monitoring unit, Dr. Erastus Dr. Rueria made the disclosure during a workshop for Responsible Commission on Corruption, which was opened by Minister for Justice Kiraitu Murungi. The Minister called on the Deputy Director of Prosecution Keriako Tobiko to prosecute those who had contravened the Act by next week. Tobiko said he is waiting for the Kenya Anti-Corruption Commission to submit the report so that he can start the prosecution.

From Kenya Broadcasting Corporation, Kenya - September 15, 2005

Setting Up of Anti-Graft Body Hailed

The swearing in of members of the Anti-Corruption Commission is set to give impetus to on-going efforts in fighting corruption which has had a negative impact on the country's economy. The recently sworn in eight-member commission has received applause from business leaders, social commentators and law enforcement agencies. Zimbabwe National Chamber of Commerce president Mr Luxon Zembe described the appointment of members of the commission, which will be led by former Comptroller and Auditor-General Mr Eric Harid, as a welcome development.

"The formation of the Anti-Corruption Commission is a welcome development as there have been growing calls from both the public and the private sector for the speeding up of its formation. "The commission is made up of people of high esteem and we believe that they are more than capable of doing their job without fear or favour," he said. Mr Zembe, however, lamented the lack of representation from the private sector and civil society. "Without taking anything away from the newly sworn in members, it is the strong belief of business that there is a need to incorporate commissioners from the private sector.

"The eight commissioners have all been civil servants and their interaction with the private sector would have been enhanced if there were commissioners from the private sector as well," he said. Social commentator Mr Augustine Timbe also hailed the formation of the Anti-Corruption Commission, saying it showed Government's commitment in the fight against corruption. "The commission has the relevant managerial and technical expertise to investigate all forms of corruption and its formation will help in the ongoing efforts to turn around the economy as it enhances investor confidence. "Cases of economic sabotage and corruption that have been going on undetected will now come to light as members of the public and whistle-blowers now have a centre to send all their tips," he said. Economist Mr Jonathan Kadzura urged the commission to investigate "every rumour to its root", saying that its formation was a clear sign that the Government is serious about fighting corruption.

"The fact that President Mugabe swore in members of the commission shows that the issue of corruption is being tackled with the seriousness it deserves. "The commissioners all have reputable backgrounds and with good rapport between them and law enforcement agencies, it will lead to the unearthing of several high-level corruption cases. "The people of Zimbabwe have high expectations for the commission and its failure will represent the failure of the nation," he said.

Police spokesperson Superintendent Oliver Mandipaka said the swearing in of the commission would give the police more energy to deal with corruption cases. He said it was in line with this year's police theme, "ZRP Supporting a Dynamic Economic Recovery through Professional and Efficient Policing Initiatives". "What we are saying is that we are directing our efforts to fight corruption in all sectors of the economy. "This has been evidenced by the cases that we have dealt with in 2005 where we arrested financial directors, officials from the Zimbabwe Revenue Authority and top company officials, among others," said Supt Mandipaka.

He said police were committed to fighting corruption no matter what it took. He said the ZRP had changed the CID Gold Squad to CID Minerals, adding that the new department was now dealing with all cases that have to do with smuggling of precious minerals, be it gold, emeralds or any other mineral and works hand in hand with other countries in the region. "As efforts to fight corruption intensify, we have serious fraud squads complementing our investigations unit. "We have also introduced the Criminal Intelligence Unit (CIU) that primarily keeps a database of all serious cases, be they fraud, corruption, serious robberies and all cases that negatively impact on the economy," he explained.


From AllAfrica.com, Africa, by Makomborero Mutimukulu and Roselyn Sachiti if The Herald, Harare, September 19, 2005

AlamIeyeseigha: Obasanjo, Governors Hold Anti-graft Talks

Abuja - President Olusegun Obasanjo is convening a special meeting with the state governors on the consequences of the continued involvement by some of them in corrupt practices and the implications on Nigeria's socio-economic development. This is coming on the heels of last week's arrest, in London, of Governor Diepreye Alamieyeseigha of Bayelsa State. The British High Commissioner in Nigeria, Mr. Richard Groznyy, confirmed yesterday in Abuja that Governor Alamieyeseigha's arrest was inspired by Federal Government's anti-corruption crusade. He also dismissed suggestions that the governor was being persecuted by Britain.

President Obasanjo, speaking through Solid Minerals Minister, Mrs Oby Ezekwesili, at a function in Abuja said the unending poor living conditions of the majority of Nigerians were caused by lack of prudent utilisation of public funds by state and local government authorities. The function was the opening of a training programme for officials from 11 states of the federation that have volunteered to establish the due process policy in their public procurement system. He said: "Better management of public finance, which I strongly believe the institution of the due process culture can help ensure at the state level, will positively impact our macro economic fundamentals. This is especially so given that states and local governments account for over 50 per cent of our total revenue accruing to the federation account.

"The recently released 2005 Human Development Report and the World Bank report variously showed that Nigeria ranked low on a couple of development indices. The import of this is that in spite of massive improvement in governance resources through the on-going reform at the federal level, there are still many Nigerians who lack access to basic amenities and facilities, which are good roads, portable water, access to education, medicare, affordable housing and adequate social security. "However, since the provision of basic infrastructure facilities fall not only on the Federal Government, but also on the states and local governments, only a transparent, efficient and value-for-money driven procurement culture in all tiers of government can guarantee that Nigeria does not continue to oscillate around the lower rungs of theses development indices."

Why Alamieyeseigha was arrested, by UKenvoy - The British High Commissioner in Nigeria, Mr. Richard Groznyy, confirmed yesterday that the arrest of Governor Alamieyeseigha was inspired by Federal Government's anti-corruption crusade. "The police investigation that led to his questioning was entirely routine and normal. It was partly inspired by Nigeria's request in the last two years about money and money laundering. But I can't say more than that as regards individual cases," he told State House correspondents, shortly after meeting with President Obasanjo at the State House, Abuja yesterday.

Reacting to threats by the Ijaw in the Niger Delta to kidnap British nationals in the Niger Delta over the arrest of the Bayelsa governor widely known as "the Governor-General of the Ijaw nation" in Nigeria, he wondered why the Ijaw should take the option of kidnapping Britons in Nigeria. "We see no reason why the Ijaw should need to act against the British people. But the police will let matters take their course in London. But they can be assured that the governor is under no special persecution or anything like that. But I am grateful for the assurances of the police authorities in Nigeria about the security of British citizens in the Niger Delta. "I think we are grateful for the re-assurances given over the weekend by security authorities here. We have full confidence in the police and others in protecting British citizens wherever they are in Nigeria. But it is good to have the statement made over the weekend." Groznyy was accompanied to the State House by the visiting British Minister of State for Defence, Mr. Ingram Adam.

Senior Special Assistant to President Obasanjo on Media, Mrs. Oluremi Oyo, in a statement on Mr. Grosnyy's visit said President Obasanjo said the African Union and European Union had agreed to strengthen the Partnership Forum through a meeting with all multinational companies operating in Africa to get them involved in the partnership that already exists between the two continents. He said he held discussions with the British Prime Minister Tony Blair during the UN General Assembly on the planned meeting, to be held in Brussel, as a follow-up to the agreements and decisions taken during the G-8 Summit at Gleneagles in July this year. President Obasanjo thanked the British Government for the "tremendous assistance in debt relief and co-operation generally" to Nigeria and Africa. "We look forward to more cooperation in the future," he said.

Earlier, Mr Adam told the President that he was in Nigeria to explore ways of further co-operation with Nigeria on defence issues, stressing that it was "important for the capabilities of the ordinary soldier to be improved." He said British Government was offering an assistance of £200,000 for the improvement of facilities at the Command and Staff College, Jaji, because of the important role the college plays in the capacity development of soldiers.

From Vanguard, Nigeria, by Emmanuel Ujah & Charles Ozoemena - September 20, 2005

African Leaders Move Against Barriers to Development

The United Nations Office on Drugs and Crime (UNODC) has identified crime and corruption as the primary hurdle facing the development processes of the African continent. In order to nib this problem in the bud, a new programme of action for a change was instituted, where justice officials from over forty African countries met with development partners in the Nigerian capital, Abuja, at a round-table discussion last month, to design a formula to end crime and corruption across the African continent.

The new programme of action is directed at corruption, as well as domestic and organized crime, urban violence, post-conflict breakdown, trafficking of drugs and human beings, arms smuggling, child militias and the looting of natural resources. The participants focus on broad range of solutions, including asset recovery and the need to make the rule of law the focal point of development and post-conflict programmes. "Africa is at a tipping point," the UNODC Executive Director, Antonio Maria Costa, noted. "The prospects for change in Africa are real, but we need to act fast. Countries who donate resources want them to reach intended beneficiaries. African States must be ready to offer donors evidence that the rule of law is in place; that enforcement and judicial systems work and that aid is administered properly," the Executive director emphasized.

Crime and Development in Africa - In the UNODC report, crime and development in Africa suggested that high levels of crime might have hampered Africa's development, as governments lacked the capacity to collate ample crime data and conduct adequate independent research. With sufficient indicators pointing out to the presence of a serious crime problem in the continent including violent and property crime, much associated with underdeveloped countries, this comes as no bombshell as crimes, internationally, are linked with the following characteristics as: - High levels of income inequality, of which Africa is the hub to some of the most unequal societies in the world; - Rapid urbanization, where Africa is urbanizing at double the global rate; - A large chunk of about 40% of sub-Saharan Africans are under 15 years and therefore unemployed; - A less resourced criminal justice system in African, where the ratio of police officers and judges to members of the public, is the lowest in the world with consequent low conviction rates.

Crime and contemporary forms of conflict - The rampant conflict that has bedeviled the African continent is said to have caused high-level crimes in Africa as the continent has suffered many wars in recent years than any other part of the world. It is noted that the ill treatment meted out to civilians during such conflicts, could have lasting effects on society with rebels and terrorist groups funding criminal activities to perpetrate evil on the innocent members of the society. Acts of conflict also ruins the capability of the state to obtain order and to make provisions of services to its citizens, thereby playing a role in crime both during and after war.

The growth of transnational organized crime - There is mounting growth of transnational organized crime on the African continent. The continent, which used to have the use of herbal drugs such as cannabis and that being commonly used, has at the moment become the transit point for international drug traffickers who play major role in the problems associated with the use of cocaine and heroin in some urban areas. The world is currently challenged with 89% of African countries affected by human trafficking, either being the source or destination countries, the United Nations Children's Fund (UNICEF) has reported. Furthermore, the continent is dented by acts of theft and smuggling of its rich natural resources including minerals, petroleum and wildlife with West Africa organized criminals most noted to have successfully plied their nefarious activities both inside and outside Africa. Following the numerous criminal activities engulfed in the continent, participant at the UNODC round table discussion indicated that the human suffering resulting from such brutish acts of criminals is impeding development process. "In addition to the human suffering caused by crime itself, there is good reason to believe that, in a number of ways, crime is hurting the development process," the report emphasized.

Crime is driving business away from Africa - It has come to light that surveys conducted for the 2005 World Development Report suggests the African leaders blamed the upsurge of crime to be a contributing factor to loss of investments in their countries. "Foreign direct investment levels in Africa are lower than they should be, and much of this can be attributed to the perception that the rule of law does no prevail in Africa," participant observed at the UNODC discussion, adding that compared to investors in other parts of the world, Africans would readily invest their resources (finance) outside their continent. Corruption has also been identified as the main obstacle to development, having ranked top among African business leaders and believed to be the cause of bureaucratic procedures and incessant red taping associated with some African business environments.

Crime erodes Africa's human and social capital - The UNODC discussions further acknowledged that people who live in poor countries, are more likely to be affected by the upsurge of crime, than those living in rich countries. Those involved in physical labour and with access to inadequate healthcare facility, are also noted to suffer the devastating consequences associated with violence-related injuries.
"Crime undermines quality of life, and many contribute to immigration of skilled labour," the participants stressed. "Crime also destroys public trust and undermines the basic conditions that are essential for healthy societies". Crime undermines the ability of the African state to promote development Corruption is believed to have reared its head in activities of government officials in the delivery of daily assistance to the public, thereby hampering development in many parts of Africa.

Government officials are therefore accused of demanding payments before they render services to the public. The activity of corruption then encourages people to have greater access to control the benefits generated by the state and make additional proceeds from members of the public. "Predictably, this tends to alienate those who are not part of the inner circle, fuelling both crime and the growth of the informal sector," UNODC participants noted. As a result of these corrupt activities, a large chunk of the informal sector and related tax-avoidance, drains the available funds earmark for development, whiles the remaining funds are channeled through activities other than what they were meant for. In the foregoing circumstances, the UNODC roundtable report noted, "crime undermines democracy itself, as the people begin to see the state as an adversary, rather then a representative."

Africa is rising to these challenges - In spite of the challenges confronting the African continent, the UNODC report held that there are indicators that suggest progress in several aspects of development in the continent, in the area of creating a legislative and institutional framework to fight crime, as African leaders have been advancing projects for democratic reforms and economic growth for their people. "The time is ripe for tackling this important barrier to African development," the report charged.

From AllAfrica.com, Africa, by Ivy Benson of Ghanaian Chronicle, Accra - September 20, 2005

Peer Review Will Expose Corruption in South Africa: Mbeki

Mbeki is certain that an African programme to review good governance would expose corruption in SA. President Thabo Mbeki says he is certain that an African programme to review good governance would expose corruption in South Africa. Mbeki was speaking at the launch of the national consultative process to determine the state of readiness ahead of the arrival of the Peer Review Panel. Mbeki says there are expectations of South Africa that don't exist for other countries on the continent. Mbeki was speaking in Midrand on the first day of the consultative process for South Africa's assessment. Peer review is a central pillar of Africa's home-grown rescue plan with Nepad under which governments submit their policies to scrutiny by other African administrations.

From SABC News, South Africa - September 29, 2005

 

Incompetent Public Servants Face Forced Retirement

The government plans to evaluate public servants in six categories and send away those found to be inefficient, the Office for Government Policy Coordination said Thursday. According to a report by the office to Prime Minister Lee Hae-chan, government officials at 47 ministries and central government agencies will be classified into six different categories based on their job capabilities and accomplishments, as well as their results in various training programs.

About 10 percent of the government officials with the highest evaluation will be placed in the first group and be trained as leaders through overseas study and work experience programs at private companies. The government will also choose the second and third group of officials, 20 and 15 percent of the total, respectively, in order to encourage them to develop their capabilities to be included in a higher group. About 45 percent of government officials, who belong to the fourth group of "regular public servants," will have to undergo intensive training programs. The fifth and sixth group of officials with poor capabilities and work attitude, five percent each, will be asked to take a temporary leave of absence or to retire from office. The current 32 hours of training programs for public servants will increase to up to 100 hours in order to meet the standards of advanced countries.

The government will also encourage non-regular public servants with poor job security to seek reemployment as regular workers through special training programs. "One thing is clear _ that government officials will have to make a great deal of effort in order to survive competitions," said an official of the Office of the Prime Minister. Working-level officials, however, expressed concern over the measure, which will be finalized after being reported to President Roh Moo-hyun next month, as they believe the human resource management of public servants relies largely on personal relationships based on birthplace or academic background.

In March, the Ministry of Government Administration and Home Affairs introduced an organizational change to replace the current system with a team-based one, streamlining its previous vertical and rigid structure with redundant decision-making procedures to maximize its work performance. Some 10 ministries and government agencies have started to adopt the reform initiative. Despite the Roh administration's efforts to renovate and decentralize the government system, the efficiency of South Korean government placed 60th out of 209 countries last year in a recent World Bank report. The ranking was down from 50th during the Kim Dae-jung administration in 2002.

From Korea Times, South Korea, by Lee Jin-woo - September 8, 2005

Government Paying Special Attention on Improving Skills of Manpower: PM

Islamabad - The new paradigm is evolving a mechanism which can increase productivity, competitiveness and provide reasonable compensation to the Labour, Prime Minister Shaukat Aziz stated this while talking to a group of International Trade Union Leaders who called on him at the Prime Minister's House Tuesday. Prime Minister said that Human resource is the greatest asset of Pakistan and the government is focusing on training new skills to the Labour to meet the growing demands of the industry. "We cannot find trained Labour and are experiencing shortages due to high growth and growing demands of the industry", he said, adding our biggest challenge is to rain Labour with skills on international standards so that they have more opportunities both at home and abroad and in this connection the Government has established a National Vocational Training Authority (NTEVTA).

Talking about Privatisation, the Prime Minister said that those who opposed Privatisation should know that more employment has been created as the units privatized have grown and expanded and they are employing more people at better pay packages.
The Prime Minister said that worker in Pakistan is hard working and diligent and the government will encourage productivity, social compliance and merit. The Prime Minister urged the International Labour Union Leaders to work for free movement of Labour across the borders as merit based movement encourages skills transfer and better employment opportunities. Mr. Guy Ryder, General Secretary, International Confederation of Free Trade Union, Mr. Noriyuki Suzuki, General Secretary, ICFTU, Mr. Kari Tapiola, Executive Director, ILO said that Pakistan ILO enjoy good relations and they hope that the growth in the economy will benefit the Labourers. Mr. Ghulam Sarwar Khan, Minister for Labour, and Tariq Azim Minister for Manpower & Overseas Pakistani were also present on the occasion.

From PakTribune.com, Pakistan - September 6, 2005

Government Reform Aims to Root out Corruption

Beijing - The government of Changbai Korean Autonomous County in Northeast China's Jilin Province is splitting the power between the heads and deputies of five departments to combat official corruption. The pilot programme was the brainchild of the Baishan City Commission for Discipline Inspection, with the goal of preventing official corruption. Changbai County is under the jurisdiction of Baishan city. The experiment will be completed at the end of September before all local governmental departments will adopt the new system. Baishan city will also implement it at the beginning of next year, according to Wang Jinwei, head of the Baishan City Commission for Discipline Inspection.

Through the new system, heads of five government departments are forbidden from directly handling finance, personnel, project bidding and government procurement - four areas where official corruption are most likely to happen. Instead, the responsibility of these vital areas is handed over to their deputies, while the heads play a supervising role. But splitting the responsibility between officials does not mean less work for department heads, said Song Lianqin, head of the county communications bureau. "But only the leaders themselves fully understand there is still a heavy load of responsibilities on our shoulders," Song said. "During the last three months of the experimentation on the new system, I realized that the new system is both a challenge and something that will do us good."

The reform will require department heads to listen to deputies' report about their work, seek more details about the projects from the accounting and auditing departments and tendering companies. "Problems could be investigated and solved quickly," Song said. The Forestry Bureau, the Civil Affairs Bureau and the Education Bureau are also involved in the pilot programme. "Doubtless, the new system is an innovation in reforming local government institutions by splitting the power of government department leaders," said Dong Caisheng, dean of the Sociology Department of Jilin University.

From Xinhua, China - September 12, 2005

Beijing to Revise Norms on Professional Ethics for Teachers

Beijing municipality is organizing a group of experts and teachers to revise the existing norms on professional ethics for the primary and middle school teachers, according to a senior educational official. The ongoing revision of the norms targets at working out a series of effective and practical rules concerning the ethics and behaviors of teachers, said Zhu Shanlu, secretary of the municipal educational work committee, who was addressing the Beijing Forum on Professional Ethics of Teachers held Tuesday. Individualism, hedonism and money worship constitute the major factors affecting professional ethics of teachers, the official said.

The revision will involve setting up of a series of systems concerning the post responsibility, and supervision and punishment of teachers in implementing the norms of the professional ethics. Explicit prohibitions are being set to stop irregularities of teachers. Those teachers who are not qualified will be removed from the profession, the official stressed. The city will still set up regular tests on the personalities and psychological performance of teachers to tighten control on the employment of teachers, he said.

From People's Daily Online, China - September 7, 2005

Corruption Not Decreasing: TIB: Communication, Police Most Corrupt Sectors

Communications police, education, health and local government are the most corrupt sectors in the country, according to a new report of the Bangladesh Chapter of Transparency International, a Berlin based global anti-corruption organisation. Of the five, communications is the most corrupt sector in terms of financial involvement as this sector involved highest number of development projects, the report revealed. The report revealed that 23.68 percent of the total loss involving Tk 97.82 crore was contributed by the Ministry of Communications alone. A total of 370 reports published in the newspapers indicate a total financial loss of Tk 413 crore 9 lakh 16 thousand. Of the sectors, communications, tax, police, forest and environment and NGO contributed to the three fourth of the total financial loss.

"Corruption is not decreasing as no action is taken in most of the corrupt cases. Political will and proper discharge of duties in the administration can reduce the corruption," said Professor Muzaffer Ahmad, Treasurer of Board of Trustee of the TIB while releasing the Corruption Database Report 2004 at a crowded press conference at National Press Club in the city yesterday. He said the country's overall development would be affected and living standard of people would deteriorate further if corruption could not be checked. Prof Muzaffer pleaded for strengthening the Anti-Corruption Commission (ACC) and formation of separate cells at all ministries to deal with the corruption cases. A central cell should be formed at the Prime Minister's Office which would coordinate the cells. He said corruption is seriously affecting the ordinary people, government, and other classes of people.

The TIB prepared the database on the basis of corruption reports published in 25 national and local newspapers including The New Nation in 2004. The report, analysing the mode of corruption, said the scale of corruption in police and local government sectors were the highest in the form of bribe and misappropriation of money and property respectively. According to the report, of the elected people representative, Union Parishad Chairmen are mostly involved in corruption practices while the UP members were in the second position.

The report said that of the corruptions 59 percent remain unpunished, administrative measures were taken against 21 and cases were filed only against six percent corruption incident. It also revealed that the corrupt persons in the government officials constitute 72 per cent, non-government 13 per cent, elected people's representatives 7 percent and NGO and political activists 3 percent each. According to the report the ministries where corruption was less than 1pc include ministries of Women and Children, Prime Minister's Office, Parliament Secretariat, Establishment, Religious Affairs, Shipping, Foreign Affairs, Jute, Civil Aviation and Tourism, Fisheries and Livestock, Industries, Social Welfare, Housing and Public Works, Law, Justice and Parliamentary Affairs and Information. TIB Assistant Researcher Tanvir Mahmud Sohag presented the report while Executive Director Iftekharuzzaman, among others, was present at the press conference.

From The New Nation, Bangladesh - September 15, 2005

SEZ Leads in Reform of Government Governance

Shenzhen - Local residents and non-governmental organizations are expected to have a greater say in the city administration's policy-making process. This is just part of a package of measures that will be implemented in the next few months to promote innovation on administrative governance and improve the self-construction of the government, which will finally lead to a responsible, transparent and service-oriented government under the rule of law. Correspondingly, the city will stipulate a number of detailed regulations. For example, a regulation legalizing every process of the government approving system, to ensure that administration decisions are made rationally and in a democratic way and that the administrative executives are held accountable, will be put into place by the end of this year or early next year, Nan Ling, director of the newly-set Shenzhen System Reform Office, told a press conference early last week. Maintaining a small government, the southern city may not recruit new hands to handle the complicated reform on government administration, he said. "We may invite some outside resources to work for the government. We can pay for the business but won't employ new civil servants for this," said Nan, adding that it will also result in changes in government expenditure.

The country's first special economic zone (SEZ) has lost its charm as a reform pioneer, a role it played well in the 1980s and 1990s with the unparalleled support of the central government, but the central government expects the city to take the lead again in administration reform. In a recent tour to the SEZ earlier this month, Premier Wen Jiabao said that SEZs such as Shenzhen should focus on innovation as the life and soul of their development in the new circumstances.

Now that China has entered into a new phase of building a moderately prosperous society and the acceleration of socialist modernization, the central government will stick to the line of developing SEZs and the basic policy in developing SEZs, said Wen. Wen emphasized that SEZs should explore new modes and measures to modernize better and prioritize innovation. At the same time, social science scholars said Shenzhen could pick up the strength to lead the country in public governance reform. Le Zheng, president of the Shenzhen Academy of Social Sciences, said the local government would widely consult its residents before a policy is made in a bid to democratize its decision-making processes. Non-government organizations have boomed since the government set up a special department last year to foster and serve the trade associations. The government will listen more carefully to the voices of residents, non-government organizations and corporations, Le said.

From China Daily, China, by Chen Hong - September 22, 2005

PNG Anti-corruption Group Condemns Proposed New Leadership Law

An anti-corruption group in Papua New Guinea has declared war on proposed legislation to amend PNG's leadership law which would stop MPs being removed from office if found guilty of wrong-doing. The group, Community Coalition Aagainst Corruption, says a proposal to stop corrupt leaders from being dismissed by a tribunal is insane and unconstitutional. PNG's leadership code empowers tribunals to dismiss MPs for three years if found guilty of wrong-doing, including the misuse of public funds. Spokesman Mike Manning has called on all citizens and other MPs not to support the bill when it is tabled in parliament later next month. "Clearly it is removing our elected leaders from the sanctions that applies to any other leaders in Papua New Guinea," he said.

From Radio Australia, Australia - September 22, 2005

Government Disputes World Bank Report

Disputing the recent World Bank report that said doing business in India involved going through complex procedures, the Government said on Tuesday that the survey ignored various steps taken to simplify the system. The report 'Doing Business in 2006' said that it took 71 days to complete the 11 procedures required to set up business in India in January, 2005. The report indicated that last year it took 89 days to complete the same processes. The conclusion is based on the feedback from selected resource persons for Mumbai. Besides, it had reported that it took 30 days to get a Permanent Account Number (PAN) and 45 days to get a Tax Account Number (TAN) in Mumbai.

It appears that the report has not taken into account the initiatives which are already in place, an official statement said. In fact, reduction of time taken in allotment of PAN/TAN would itself mean that the total time required to set up business would be less than 30-40 days, which will come down further with the completion of MCA-21 e-governance initiative. The Government has initiated a number of steps to simplify and speed up the process of allotment of PAN. Analysis of the applications received during January-June 2005 shows that in over 99 per cent cases, PAN cards were issued within 10 working days, which is substantially lower than the 30 day period reported in the report. The work of issuing TAN has also been outsourced to National Securities Depository Limited and currently they are being issued in less than 15 day against the period of 45 days suggested in the report, the statement said.

It may also be clarified that TAN is not a pre-requisite for starting a business, it added. The Indian Government has also initiated a major e-Governance initiative, known as MCA-21, in the Company Affairs Ministry for putting in place an operational system for electronic transactions in respect of the core activities under the Companies Act. The pilot projects for the Office of the Registrar of Companies at Coimbatore and Delhi are scheduled to become operational by February 15 next, it said, adding in the remaining 18 locations the project will be operational in a phased manner by April 30 2006. All the services relating to the incorporation of companies such as - availability of name, incorporation and issuance of certificate of incorporation would be available on-line on a real time basis, the statement added.

From Hindustan Times, India, by Press Trust of India, New Delhi - September 27, 2005

China Conference Highlights Corruption as Threat to Stability

In China, delegates at a conference on corruption are warning that governments need to do more to curb bribery and theft of public money, which they say threaten stability. Experts on corruption say that left unaddressed, it adds to social inequities that can grow into public conflict. Peter Rooke, the regional director for Asia Pacific at Transparency International, an anti-corruption group based in Berlin, points to China as an example of the corrosive influence of corruption. He says that as China's economy grows rapidly, so does the gap between rich and poor - a situation he calls a prescription for unrest. "That inequality can be exacerbated by corruption," he said. "And certainly, if people feel that their leaders, whether it's at the local level or the national level, are effectively stealing from them, then this of course has serious political consequences."

An anti-corruption conference sponsored by the Asian Development Bank and the Organization for Economic Cooperation and Development opened Wednesday in Beijing. Among the government officials and civic group leaders are dozens from the 25 countries that participate in the ADB's Anti-Corruption Initiative for the region. China's government has been struggling to contain a growing number of protests among poor peasants over issues ranging from land grabs by corrupt officials, excessive taxation, and environmental degradation. Officials say there were 74,000 protests last year, up from 10,000 in 1994. The protests have continued to grow despite the government's enactment of numerous anti-corruption laws. Political analysts say the continued protests mean a better strategy is needed.

Last year, China earned a score of 3.4 points in Transparency International's annual survey on how business people rank corruption in different countries. The least corrupt countries had scores above nine points with Finland the highest at 9.7. Among the Asian countries earning less than three points were the Philippines, Indonesia, Burma and Bangladesh.The three-day conference in Beijing will include discussions on strengthening regional cooperation, and the role of public opinion in anti-corruption reform.

From Voice of Americ, by Luis Ramirez, Beijing - September 28, 2005

 

Putin Denies Creation of State Oligarchy, Says Corruption Still Plagues Russia

President Vladimir Putin denied Monday that Kremlin officials at the helm of state companies had become Russia's new top business tycoons, although he acknowledged that corruption continues to plague the country, The Associated Press reported. Speaking at a meeting with foreign political scientists and academics, Putin laughed at the suggestion that officials had stepped into the shoes of Russia's tycoons who snapped up vast wealth in rigged privatization deals in the 1990s. "They don't own shares in these companies, they don't receive dividends from them or salaries," Putin was cited as saying by the RIA Novosti agency. State-controlled gas giant Gazprom and state-owned oil company Rosneft are headed by Putin's chief of staff, Dmitry Medvedev, and his deputy, Igor Sechin, respectively.

Both are expanding their businesses aggressively, in line with a Kremlin drive to cement control over Russia's strategically important - and vastly lucrative - oil sector. Rosneft snapped up the shattered Yukos oil company's main production unit after its disputed sale in a politically charged back taxes case in December. Sechin has been rumored to be the architect behind the tax campaign against the company after its jailed owner, Mikhail Khodorkovsky, sponsored opposition parties in the 2003 parliamentary elections. Gazprom, meanwhile, has said it is negotiating the purchase of smaller oil company Sibneft.

Putin said he favored transferring the role of state representative in such companies to independent experts, but noted that he could not do this at present. "So far we haven't managed to find such experts," he said. Addressing a question on the fate of Yukos and its founder, Putin reaffirmed his stance that the case targeted a corrupt tycoon and his empire. "My goal isn't to control them (Russia's tycoons), it is to make them live according to the law," he said. Corruption nonetheless continues to plague Russia, he said. "The roots of corruption are not in bad or good people. They are in the system," he said, adding that all countries with transitional economies suffered from corruption.

From MOSNEWS, Russia - September 7, 2005

European Union Says New Bulgaria Government Must Fight Corruption before EU Accession

Sofia - Bulgaria's new government must address nagging concerns over corruption, counterfeiting and fraud if the former communist state is to join the European Union in 2007, European Commissioner for taxation and customs Laszlo Kovacs said Tuesday. 'The commission is satisfied that the new government with the participation of the three major parties has been formed and... is in a position to push through all the necessary legislation in parliament and complete the preparation for EU accession,' Kovacs told a press conference in Sofia.

Kovacs arrived in Bulgaria on Monday on what is the first official visit of an EU commissioner since the new Bulgarian government was formed last month. 'Bulgaria has achieved a lot but there is still a lot to do to complete the preparation,' Kovacs said. 'Some progress has been achieved in curbing corruption but this should remain a priority as a key element of a modern state administration and of taxation and customs in particular. 'Counterfeiting is still a concern in Bulgaria because of the production of fake CDs and transit of counterfeit products from Turkey towards the EU through Bulgaria,' he added. Bulgaria and neighbouring Romania are due to join the European Union in 2007 but this could be postponed for a year if they fail to carry out changes demanded by the European Union.

From Forbes - September 13, 2005

Complaints about Fraud and Corruption to be Facilitated

To facilitate potential informants, the European Anti-Fraud Office (OLAF) intends to set up a web-based system to allow for anonymous electronic dialogue. The system will enable individuals to come forward with information about fraud or corruption without fear of revelation of their identity. This new multilingual information gathering system and three other IT-projects are the subject of the latest open tender procedures launched by OLAF. The system envisaged for anonymous web-based communication will allow OLAF to enter into a dialogue with informants who are not willing to reveal their identity. Previous experience with anonymous information has shown that follow up can be difficult if the informant cannot be queried for further details. The use of electronic dialogue may also contribute to a better assessment of the credibility of anonymous information.

In addition to the plans for a new communication system, OLAF is preparing another three projects; the Office is seeking to update its well established Freephone system (see Press Release OLAF/04/21). Furthermore it is planning to install new textmining software to be used as an operative support in OLAF investigations. The fourth project concerns a new system for providing OLAF with both IT and physical security. The projects will contribute to the continuous development of the investigation and intelligence capabilities of OLAF. They are part of the overall endeavours of OLAF in the fight against fraud, corruption and any other illegal activities detrimental to the Communities' financial interests which received its latest public acknowledgement during a hearing organised by the European Parliament in July. The time limit for receipt of tenders or requests to participate is 30 September 2005. Details are available on the OLAF website: http://europa.eu.int/olaf.

From noticias.info (press release), Spain - September 16, 2005

Council of Europe's Group of States Against Corruption (GRECO) Publishes Report on Lithuania

The Council of Europe's anti-corruption monitoring mechanism, the Group of States against Corruption (GRECO) has published today its Second Round Evaluation Report on Lithuania. The report has been made public with the agreement of the Lithuanian authorities. GRECO addresses eight recommendations to Lithuania tailored to improve its capacity to combat corruption. They deal, inter alia, with the more effective management of temporarily seized property (such as enterprises or company shares), efficient monitoring of anti-corruption programmes adopted at sector and local levels, progressive elimination of the practice of accepting gratuities in health and social care sectors, introduction of regular in-service training on public ethics for public officials at all levels, and providing necessary training for investigating, prosecuting and adjudicating authorities in order to fully comply with newly introduced provisions on corporate criminal liability. Measures taken by Lithuania to implement the recommendations will be assessed by GRECO in the context of a specific compliance procedure, towards the beginning of 2007.

From noticias.info, Spain - September 15, 2005

EU Says Bulgaria Must Fight Corruption

Bulgaria's new government must address nagging concerns over corruption, counterfeiting and fraud if the country is to join the European Union in 2007. At a press conference in Sofia European Commissioner for taxation and customs Laszlo Kovacs said Tuesday the Commission is satisfied that "the new government with the participation of the three major parties has been formed and is in a position to push through all the necessary legislation in parliament and complete the preparation for EU accession." Kovacs arrived in Bulgaria Monday on what is the first official visit of an EU commissioner since the new Bulgarian government was formed last month.

Bulgaria has achieved a lot but there is still a lot to do to complete the preparation, Kovacs said as quoted by EUbusiness online edition. Some progress has been achieved in curbing corruption but this should remain a priority as a key element of a modern state administration and of taxation and customs in particular, he pointed out. "Counterfeiting is still a concern in Bulgaria because of the production of fake CDs and transit of counterfeit products from Turkey towards the EU through Bulgaria," the EU official added. Bulgaria and neighbouring Romania are due to join the European Union in January 2007 but this could be postponed for a year if they fail to carry out changes demanded by the European Union.

From Sofia News Agency, Bulgaria - September 13, 2005

 

Legal Constraints to Anti-corruption Drive in Iran

London - Iran's Judiciary spokesman said the performance of taskforce combating economic corruption will soon be publicized, noting that the details of all corrupt people cannot be revealed due to legal barriers. Addressing reporters in a weekly briefing, Jamal Karimi-Rad also told ISNA that the campaign against economic corruption will continue. We are facing many impediments in terms of introducing those convicted of economic corruption charges to the people. We cannot announce the details of all corrupt people due to certain legal barriers,? he added.

Asked about the progress made on the political crime bill, Karimi-Rad noted that although the Sixth Majlis approved the political crime bill, it was rejected by the Guardians Council and subsequently sent to State Expediency Council for arbitration. State Expediency Council has not informed the judiciary about its decision yet, he said.

On filing charges against the ousted Iraqi leader, Saddam Hussein, the spokesman said Iran is presently gathering all complaints of people and will submit the same to the Iraqi court after organizing them within a legal framework. Karimi-Rad also noted that the judiciary will also implement a plan for increasing social security and confronting miscreants. Details of due process have been compiled and will be implemented for a period of 20 days starting Sept. 6, in cooperation with the police, Intelligence Ministry and Basij (volunteer forces), he said.

From IranMania News, Iran - September 6, 2005

New System to Eliminate Thousands of "ghost" Civil Servants

Sana'a - The identification system for civil servants, put into effect last week, should help reduce unemployment and costs, a report from IRIN, a United Nations news service, says. Officials told IRIN that the scheme "should eliminate an estimated 60,000 'ghost' workers and help to reduce corruption." Positions of employment, and their corresponding salaries, have been unfairly appropriated by employees who also occupy other posts in government. The identity plan should put a stop to the practice.

"We have been talking about the problem of multi-dippers for five years and prepared programs, spending a lot of money to eliminate it," said President Ali Abdullah Saleh, who launched the project on 7 September. "This time I am optimistic that all government institutions will cooperate to eliminate [it]." Cleaning up the employment rolls would result in 60,000 new positions that can be filled by university graduates, he added. "There are people who hold multiple jobs in the civil service, the military or security and there are others who hold more than one job in two sectors within the civil service," Minister of Civil Service and Insurance Hamoud Al-Sufi said. "There are people who receive salaries without performing any job," he added. "But I am sure that after six months this problem will be eliminated."

Funded by the World Bank, the 4 million euro project is a continuation of a reform package started in 1995 to modernise Yemen's civil service. It focuses on the creation of institutions, capacity, and systems for sustained human and financial resource development, according to the World Bank. "The performance of the current public administration is seriously deficient. This is caused by inadequacies in areas of personnel management, programming, planning and budgeting, to mention a few," Mustapha Rouis, World Bank country manager in Yemen, said during the launch. The new system, which uses pictures and fingerprints, commences in October after the President asked the civil service ministry to allow 30 days for those in multiple employment to choose one job.

According to the minister, it had not been easy to identify the problem because of lack of a computerized database. As a result, the government payroll had soared to more than 470,000 - costing over 15 percent of GDP in 2005. "People having multiple jobs [create] a good environment for corruption. And when we target it, we target the interests of many people," the minister said. "This is why we are harshly criticized by people and sometimes by media, but we are very serious about it." "We have already saved US $15 million from 10,000 employees who have already resigned from one of their jobs," he added. Multiple employment was recognized as a serious challenge by the country's civil service ministry in 2002 when some 16,000 "multi-dippers and ghost workers" were identified. An attempt to resolve the problem failed amidst complaints by those affected and 90 percent of them returned to their jobs. Under the new system, the minister said, the government would establish a computerized database, set up 22 local information centers, improve capacity and curb bureaucracy.

From Yemen Observer, Yemen - September 13, 2005

UN Asks Central Bank to Assist in Iraq oil-for-food Corruption Inquiry

Beirut - The UN has asked the Central Bank for information regarding the accounts of a group of Lebanese who could have received oil coupons from former Iraqi President Saddam Hussein' s regime in return for favors, An-Nahar reported. ccording to information, the independent commission of inquiry into the case led by Paul Volker addressed the letter to the Central Bank two weeks ago, before the arrival of a mission to Beirut. The mission investigated allegations into the involvement of several UN employees in Beirut with some Lebanese in facilitating illicit deals.

Sources at the Central Bank said the bank received a list of names, but did not reveal their identities. The sources said the investigations were in the context of the international investigation conducted with all countries that had any relations with the former Iraqi regime.
The UN commission is examining allegations of corruption and fraud surrounding the oil-for-food program, which the UN ran in Iraq from 1996 to 2003. Saddam Hussein, senior UN staff members and companies from Security Council member-countries are accused of conspiring together to skim billions from the program, which aimed at using profits from oil sales to buy food and medicine for the Iraqi people.

From Daily Star - Lebanon, Lebanon - September 19, 2005

Consultative Meeting on Combating Corruption

Participants in a consultative meeting recently held in Sana'a on Yemen's efforts for fighting corruption and means of engaging civil society organization in it, have confirmed the importance of forming a national non-governmental committee composed of personalities entertaining uprightness and efficiency. The committee is to be composed of representatives of civil society organizations in order to watch and follow up the application and implementation of the national strategy on combating corruption.

The meting, organized by the presidency office in cooperation with the central apparatus for audition and accounting and he German organization GTZ, has stressed the importance of dissemination of the culture of accountability, transparency and enhancement of the role played by the central apparatus for audition and accounting in a manner empowering it carrying out its tasks according to the law in fighting corruption and development of relations of coordination and integration with relevant parties concerned with protection of the public property as well as linking it to an order guaranteeing integrity of information.

The participants also have indicated the importance of expanding the circle of dialogue between the government and the NGOs to determine the priorities and aspired for goals and to draft them within a frame of common programs on combating all forms and types of corruption. They have recommended the significance of activation of the role of NGOs for following up measures taken by the government on fighting corruption and offering suggestions and perceptions aimed at activating those measures as well as promoting the role of the media and educational institutions in the field of enlightenment on the negative phenomena related to corruption and damage ensued on political, social and economic sides. They stressed the necessity of establishing a legal system for fighting corruption, mainly the completion of a draft law on financial responsibilities and a draft law on affirming the easy flow of information in addition to dependence of the principle of transparency and reformation of shortages in some legislations pertaining to financial and administrative issues.

Chairman of the central apparatus of audition and accounting Dr. Abdullah al-Sanafi considered the process of fighting corruption as a common responsibility requiring, in addition to integrity of the state institutions, interaction of the NGOs, pointing to the procedures taken by Yemen in its efforts for elimination of corruption and drying up its origins. According to him, the main of such measures are the formation of the higher commission on considering issues of state property and preparation of a group of integrated tasks and effective arrangements for the protection of public property and combating corruption.

On his part, the deputy of the German ambassador to Sana'a deemed the meeting as a forward step in the direction of cooperation and between Yemen and Germany in this field and preservation of public property. He has singled out that the importance of the meeting lies in participation of NGOs as they are an essential partner in fighting corruption and one of the pillars of popular participation and that would stimulate the society to stand up to the phenomenon of corruption. He has also lauded the Yemeni government's efforts in fighting corruption which is one of the most serious impediments of development in any society.

From Yemen Times, Yemen, by Mahyoub Al-Kamaly - September 22, 2005

 

Chile Most Ethical Country for Business, Mexico Gets Points for Strong Economics, Brazil Loses for Corruption

Madrid - Chile is Latin America's most ethical and sustainable country for business according to a new study by ethics rating firm Management & Excellence (M&E), Madrid. Latam's largest country Brazil comes in a weak 5th while Mexico makes 2nd and Argentina comes in 3rd.

Rank of Countries
  Country Score
1. Chile 74%
2. Mexico 60%
3. Argentina 59%
4. Peru 51%
5. Brazil 47%
6. Venezuela 47%
7. Ecuador 37%
8. Colombia 31%

Sixteen years after the exit of Augusto Pinochet and return of democracy, Chile transitioned to a modern, open economy and leads in anticorruption efforts. It was first to initiate corporate governance reforms in 2000, broadening shareholder rights and increasing the powers of independent directors. The M&E study is the first ethics and sustainability ranking of Latam's eight largest countries using 60 points of quantitative data in areas such as corporate governance, fiscal and economic performance, security and social performance, educational performance and performance against corruption to
determine "ethics" (good policies) and sustainability.

Second-ranked Mexico is aided by its economic proximity to the U.S which fuelled its GDP per capita growth. Mexico's trade with the U.S. increased by 175% since the North American Free Trade Agreement took effect in 1994. Its GDP per capita is higher than Chile's. Argentina is only 1% below Mexico but has a different profile. Since the 2001 financial crisis, Argentina is struggling with a public debt that is 65% of its GDP and the third-highest inflation rate in the sample. Yet Argentina leads in areas which were good before the crisis and are still strong, such as education.

Brazil is strong at corporate governance where Lula's government has spearheaded reforms but it ties with Colombia for last place in crime and unemployment. It loses points for corruption and poor education. Sharing the fifth spot with Brazil is Venezuela, but with a very different profile. Venezuela is the worst in corporate governance, together with Ecuador. Economically, Venezuela is among the weakest performers with the highest inflation rate (31.1%) and lowest in economic freedom. The M&E study is for sale at info@management-rating.com. Tel: +34915902950 or +49678124414.

From PR Newswire (press release), NY - September 8, 2005

Brazil Congressman in Corruption Scandal Expelled

Roberto Jefferson, the congressman who sparked a corruption scandal threatening to overwhelm the government of president Luiz Inacio Lula da Silva, has been expelled from Brazil's Congress after legislators voted to cancel his mandate on Wednesday night. He is the first of several legislators expected to be expelled over their roles in the scandal. The Brazilian government has come to a near standstill because of the affair, which is likely to cause lasting damage to Mr Lula da Silva's Workers' party (PT) and weaken the president's chances of re-election next year.

Mr Jefferson accused members of the PT of running a scheme of vote-buying and illegal campaign finance in a newspaper interview published on June 6. In subsequent evidence to Congress he admitted accepting R$4.1m ($1.8m) from the PT on behalf of the Brazilian Labour party (PTB). Mr Jefferson was president of the PTB until he stepped down after making his allegations. One other congressman has resigned from Congress after being accused of taking bribes and a further 16 may be expelled after investigation by the House Ethics Committee. Several are expected to resign their mandates in advance. Brazil's central bank met market expectations by cutting its target rate by 0.25 percentage points to 19.5 per cent a year. It is the first cut since the central bank began raising rates in September 2004 to bring inflation under control.

Those who resign before proceedings against them begin will be free to run for re-election next year, while legislators who are expelled may not run for public office for the following eight years. Those under investigation include seven members of the PT, including José Dirceu, formerly Mr Lula da Silva's chief aide and a senior minister, who has been accused of orchestrating the scheme. Mr Dirceu, who has resigned his ministry, denies any involvement. The corruption scandal has dominated Congress since May, when Mr Jefferson was accused of running a corruption scheme involving executives in the post office nominated by the PTB. Three separate congressional inquiries are investigating various allegations, leaving little time for the normal business of government.

Congressional business is likely to be further delayed over a separate scandal involving Severino Cavalcanti, president of the House. Mr Cavalcanti is accused of extorting bribes from a catering company operating in the Congress building when he was first secretary of Congress. Mr Cavalcanti has denied any wrongdoing. But the evidence against him is compelling. He was widely expected to resign on Wednesday when the owner of the catering company produced a copy of a cheque for R$7,500 made out to Mr Cavalcanti's secretary. The businessman claims to have made payments to Mr Cavalcanti totalling R$110,000 during 2002 and 2003. Nevertheless, Mr Cavalcanti's aides say he will defend himself against the allegations. Should Congress decide to expel him, the process will last 90 days and cause delays in the other investigations.

From Financial Times, UK, by Jonathan Wheatley in Sao Paulo - September 14, 2005

TTTI to Government: Ratify UN Corruption Treaty

The Local chapter of Transparency International has urged Government to ratify the United Nations Convention against Corruption and take urgent steps to implement the provisions of the treaty. In a statement issued yesterday, the Trinidad and Tobago Transparency Institute (TTTI) noted that while this country was one of the first to sign the Convention in Mexico on December 11, 2003, it had not ratified it. "For a country which, according to its government, is committed to stamping out corruption and being a beacon of integrity, this is not a good sign," the statement said.

The anti-corruption watchdog noted that while Trinidad and Tobago already had some good anti-corruption legislation and, with the reform of the public procurement regime, there was more to come, it said it has observed signs of deterioration. "More public bodies are exempted from the Freedom of Information Act. More State enterprises are established to carry out the dictates of the Cabinet. Government moves to reduce the accountability of public officials by restricting citizens' access to judicial review. Major projects are undertaken without adequate prior consultation of stakeholders and in apparent defiance of regulations designed to protect citizens' rights and the integrity of the physical environment."

The provisions of the Convention have been described as "a powerful legal tool that, among other things, will enable global judicial action against the corrupt, and prohibit bribery of foreign public officials". "It will provide a framework for domestic anti-corruption legislation by introducing, for example, whistle-blower protection and effective public sector accountability systems," the statement added.

From Trinidad & Tobago Express, Trinidad and Tobago - September 17, 2005

 

Corruption Reports Heighten Reform Needs

Secretary General, Kofi Annan insists that the United Nations (UN) require a new path. At least 150 Heads of State, including President Paul Biya of Cameroon are expected in New York this week to give their voice to a reform programme that the UN Secretary General, Kofi Annan has continued to press for the organisation. The reform proposal according to Kofi Annan will enable the UN's 191-member countries to have a clearer view of how the body is being managed. In the wake of the Independent Inquiry Committee (IIC) report on the oil-for-food programme which many say accused Annan's son, Kojo Annan and the Secretary General as well; Kofi Annan stresses 'vital importance' of UN reforms. While taking responsibility where he thought he could do better, The Secretary General pointed out that the "the Inquiry findings underscored the vital importance of management reforms".

The proposed reforms according to Kofi Annan, intend to build " a strong and better-resourced oversight structure" that would be fully independent of the secretariat and from political interference by member states. The reform is designed to improve the performance of senior management, to strengthen oversight and accountability, to increase transparency, and to ensure the highest standards of ethics, notably through the creation of new ethics office. The issue of accountability and general management may appear easy to handle but power sharing among the nations of the world that belong to the UN may not be so obvious to treat.

Permanent members of the UN Security Council who have veto powers have so far called the shots over all other member countries of the UN. Africa with the highest representation within the organisation has no permanent seat in the Security Council let alone veto powers. Reversing such an imbalance has so far proved an uphill task as countries such as, China, France, Great Britain, Russia and the United States of America do not readily want to share their privileged position within the UN. Western countries think that even if Africa were to have one or two seats in the Security Council, they should not immediately have veto powers.

If the oil-for-food programme is today threatening to overturn the UN with accusations of corruption, it is because fewer nations have this far had the play a decisive role in the inside transactions of the UN. Explaining his case over the accusations linked to the IIC report, Kofi Annan clearly stated that, Cotecna Inspection Services which employed his son, Kojo was in no way improperly influenced by the Secretary General. In effect, the report points out that the procurement officer, Alexander Yakovlev solicited kickbacks for his role in the programme. The year-long investigation under the Chairman of the United States Federal Reserve Chairman, Paul Volcker also revealed that there was inadequate accountability of the $64-billion programme under which the sanctions-bound regime of Saddam Hussein was allowed to sell oil to buy food, medicines and other essential supplies.

From AllAfrica.com, Africa, by Richard Kwang Kometa of Cameroon Tribune, Yaoundé - September 13, 2005

Bolton Throws a Wrench - Envoy's 750 Proposals to Reshape Reforms May Thwart UN Plans

New York - United Nations Secretary General Kofi Annan has called the summit of world leaders that starts Wednesday a "once in a generation" opportunity to reshape the troubled world body and set its agenda for the 21st Century. But when President Bush and the heads of about 170 other governments gather at UN headquarters, the measures they will be asked to endorse will amount in many cases to general statements of principle that leave the specifics to be ironed out later--perhaps by another generation. One reason, critics say, is that John Bolton, the new U.S. ambassador to the UN, last month introduced about 750 proposed changes to the summit's "outcome document" that spells out how the UN will operate in the future.

Other observers say that many of the proposed changes improved the document but also opened the way for other nations to weigh in with last-minute alterations, forcing marathon negotiations that have produced a watered-down result. Either way, Bush's controversial choice for U.S. ambassador, a fellow Yale graduate who in the past has made no secret of his disdain for the UN, will be under the microscope during the three-day summit, which is being billed as the largest gathering ever of world leaders. "This is a negotiation among 191 nations, and this is the United Nations as it is," Bolton said Tuesday as he sought to downplay expectations of immediate, sweeping reform. "This is only the first step here."

The summit comes at a particularly troubled time for the world body, which was founded 60 years ago in the waning months of World War II. Last week, an investigation led by former Federal Reserve Chairman Paul Volcker issued a damning assessment of the UN's lapses in running the $64billion oil-for-food program. After an 18-month investigation, the committee concluded that the program, which was intended to allow Saddam Hussein's Iraq to sell oil in return for food, medicine and other humanitarian goods, was sloppily managed and riddled with corruption, allowing Hussein to reap an estimated $10 billion in illicit profits. The Volcker committee found no evidence of any personal wrongdoing by Annan but faulted him for not keeping closer tabs on the program. Annan, who became a favorite target of conservative Republicans after he labeled the Iraq war illegal, was not the only one to come in for criticism. The Security Council, where the U.S. holds a permanent seat, was also responsible for the oil-for-food debacle, the Volcker report concluded, because it kept key parts of the program under its control and then turned a blind eye to widespread violations of the trade sanctions that were imposed on Iraq in 1990 after its invasion of Kuwait.

Tighter grip urged - The committee's findings reinforced the need for tighter management within the organization's labyrinthine Secretariat, which administers the UN's programs. Reforming the UN has been one of Annan's top priorities for two years, since the Security Council divided over the invasion of Iraq, with America and Britain favoring the use of force, and France, Russia and China opposing it. In March, Annan unveiled a sweeping package of reform proposals, including enlarging the Security Council from 15 to 24 members to reflect changes in the distribution of world power over the past 60 years. That part of the package quickly ran into trouble as different coalitions of nations butted heads over which countries should be admitted to the council. Annan also called for a comprehensive anti-terrorism treaty and for the creation of two new bodies, a Peacebuilding Council to help countries emerging from conflict and a new Human Rights Council to replace the discredited Human Rights Commission, which has included such countries as Libya and Cuba.

But the oil-for-food investigation, which led Sen. Norm Coleman (R-Minn.) and others to call for Annan's resignation, left him unable to lobby hard for his proposals. "The whole idea of him brokering a bargain relied on him having the moral and political power at precisely the moment when he didn't have moral and political power," said Simon Chesterman, director of the Institute for International Law and Justice at the New York University School of Law. Into this power vacuum stepped Bolton, 56, the son of a D-Day veteran and a homemaker mother, whose conservatism was firmly established by the time he left his native Baltimore for Yale University in the turbulent 1960s. After collecting undergraduate and law degrees from that Ivy League school, he moved to Washington and, in 1981, joined the Reagan administration as a lawyer and administrator in the U.S. Agency for International Development. Colleagues there gave him a grenade marked "Truest Reaganaut."

From Chicago Tribune, United States, by Stevenson Swanson - September 14, 2005

Oil-For-Food Report

The Independent Inquiry Committee investigating the United Nations Oil-for-Food program has issued its fourth report. The Committee found evidence of both mismanagement and corruption in the program. The Oil-for-Food program was started in 1996 to ease the burden on ordinary Iraqis of the economic sanctions imposed when Saddam Hussein defied U-N Security Council resolutions intended to prevent Iraq from acquiring weapons of mass destruction. The program provided Iraq with the opportunity to sell oil and use the revenues to buy food, medicine, and other humanitarian goods.

Former U.S. Federal Reserve Chairman Paul Volcker headed the independent investigation. He said that weaknesses in the administration of the program allowed former Iraqi dictator Saddam Hussein to turn the program to his advantage. "Reports of waste, inefficiency and corruption, some exaggerated, some true, became increasingly common," said Mr. Volcker. "There was large-scale smuggling," he said. "There were illicit financial gains to Iraq. There was clear abuse of administrative rules. . . .And all of that has undermined confidence in the U-N. It's ability to respond to challenges trust upon it in the future," said Mr. Volcker, "has been undermined."

Among those cited in the new Independent Inquiry Committee report is Benon Sevan, former executive director of the U-N Office of the Iraq Program. The report says Mr. Sevan "corruptly benefited" from his role. Alexander Yakovlev, a procurement officer, was accused of soliciting bribes. "There are hard lessons for all of us to learn," said U-N Secretary-General Kofi Annan. "They are lessons about the importance of accountability," he said, "and particularly of having clear lines of responsibility and reporting so that all officials, and all parts of [the U-N] Secretariat, know exactly where their responsibilities lie."

U.S. Ambassador to the United Nations John Bolton said the U-N should also take a closer look at the activities of some governments: "There were bribes. There were kickbacks. There was lax oversight from the Secretariat, and some member states turned a blind eye toward this corruption." "This report unambiguously rejects the notion that business as usual at the United Nations is acceptable," said Mr. Bolton. "We need to reform the U-N," he said. "The credibility of the United Nations depends on it." The preceding was an editorial reflecting the views of the United States Government.

From Voice of America - September 12, 2005

U.N. Treaty to Fight Corruption Begins

United Nations - A global treaty to fight corruption go into force in 90 days, empowering nations to prosecute officials accused of stealing public funds and to override bank secrecy laws to ensure stolen public money can be recovered. Ecuador on Thursday became the 30th country to notify the United Nations that it had ratified the U.N. Convention Against Corruption, the number needed to put the document into effect. The treaty has been signed by 128 nations. The treaty covers a broad range of issues, including bribery by corporate bodies, embezzlement, fraud, theft and extortion. It also provides broader powers to fight money laundering. "This dream has become a reality," the executive director of the U.N. Office of Drugs and Crime, Antonio Maria Costa, said in inviting other countries to join the convention.

"As of today, countries can no longer hide behind banking secrecy. Until yesterday, there was no obligation for a repatriation of (stolen) assets," he said at a news conference. Officials in the past have given the example of over $9 million in bribes deposited by a former Mexican prosecutor in a U.S. bank. After six years of haggling, the United States turned over less than one-tenth of that amount to Mexico in 2003. Costa said he had recently visited Nigeria and concluded that "of the several billions of dollars stolen over just a few years, especially by former President (Gen. Sani) Abacha, only a fraction can be found." He said stolen funds tended to be dispersed among yachts, airplanes and villas, as well as divided up among many bank accounts. He conceded the United Nations could not act as an enforcer of the treaty, which instead provides countries with the means to pursue criminals.

Costa said it would be up to individual nations to decide whether to go after high-level criminals. The treaty allows the screening of officials through financial disclosures and checks on whether their wealth matches their incomes. "It's important not only because it implicates those involved but also it facilitates the recuperation of stolen money," Ecuador's Foreign Minister Antonio Parra said after a signing ceremony that brought the treaty into force. Ecuador itself is known for corrupt politics. In August, the then-president of the state oil company, Petroecuador, Carlos Pareja, said he had discovered more than 1,000 cases of corruption involving contracts under deposed President Lucio Gutierrez.
The ratification of the convention comes a week after investigators criticized alleged corruption within the United Nations, accusing officials of mismanaging the oil-for-food program in Iraq. Officials started work on the treaty in 2001, and the first countries signed on in Merida, Mexico, in 2003.

From Washington Post, United States, by Michelle Faul - September 15, 2005

Development: Poor Victimised By Extortion, Large and Small

United Nations - Antonio Maria Costa, head of the U.N. Office on Drugs and Crime, was a happy man. With Ecuador's ratification of the Convention Against Corruption, his agency has finally come into its own. "The thirtieth ratification of the Convention against Corruption is a victory for millions of ordinary citizens," said Costa, who is Italian and therefore has an idea of what this issue means. Africa was particularly set to benefit from the new rules, he said. "Imagine a situation wherein recovered funds in African states could be redeployed and used for development. It's an ingenious solution to underdevelopment, and a win-win for everyone involved," Costa said.

International non-governmental organisations (NGOs) are urging governments to fight corruption in order to achieve the U.N. Millennium Development Goals (MDGs). The eight MDGs include a 50 percent reduction in poverty and hunger; universal primary education; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; the promotion of gender equality; environmental sustainability; reversal of the spread of HIV/AIDS, malaria and other diseases; and a global partnership for development between the rich and poor. Leaders of more than 170 countries have gathered here this week to assess progress toward the MDGs, although many civil society groups complain that the Summit has been sidetracked by other issues, including security and U.N. reforms.

NGOs here noted that corruption is a global phenomenon and that limiting its reach is the responsibility of poor and wealthy nations alike. "This is a huge problem - not just in developing countries," said Sonia Correa, a research expert with Development Alternatives with Women for a New Area. "Even developed countries like the U.S. or those in Europe are not exempted. We need to change the common sense that this is the business of the Third World countries, not the rich countries." Although fighting corruption and improving governance is highlighted in the Summit's outcome document, activists warned that it would take strong commitment from state leaders to realise the MDGs. "We are glad that the outcome document actually has a quite significant section on governance and corruption," said Salil Shetty, director of the U.N. Millennium Campaign. "Developing countries should focus on improving governance to make sure that resources reach the people."

Transparency International, a global watchdog against corruption, said that there will be no fair world and no abolition of extreme poverty as long as corruption undermines education, health, trade and the environment. "Corruption is a massive drag on efforts to reach the Millennium Development Goals. It means wasted money, time, and ultimately, lives," said Transparency's Chief Executive David Nussbaum in a statement. "Governments, especially those of the G8, need to move beyond paying lip service to the principles of accountability and transparency if they are determined to improve the lives of millions who live in poverty and instability."

The G8, which recently pledged to provide significant debt relief to the world's poorest countries, is made up of Russia plus the Group of Seven (G7) most industrialised nations: Britain, France, Germany, the United States, Japan, Italy and Canada. Research conducted by Transparency International has demonstrated that corruption hampers economic growth, keeps countries from capitalising on internal resources and reduces aid effectiveness, contributing significantly to hunger and malnutrition. Petty bribery hits the poor hardest, ensuring that they stay poor.

The World Bank estimates that the total volume of bribes paid annually is one trillion dollars, nearly twice the gross domestic product of Africa. Often, the blame falls on those who take the bribes rather than those who pay the bribes. Misallocation of education resources means that schools are never built and that education systems remain drastically under-resourced. Corrupt education officials at all levels have often been found to abuse their position as gate-keepers, making good education dependent on capacity to pay bribes.

According to CIET International, 86 percent of parents polled in Nicaragua reported paying mandatory "contributions" to teachers. Of the 47 percent of girls who managed to get into primary school in one Pakistani province, nearly all reported unofficial demands for money. "By and large, public funds and social policy are vulnerable to corruption because the lack of a transparency mechanism," Correa said. Misallocation also means that hospitals are poorly staffed and resourced. Corruption in public healthcare systems even results in fake drugs, and bribes are often a prerequisite for access to healthcare, including maternal health.

Transparency International reports that the average maternity ward patient in Bangalore pays approximately 22 dollars in bribes to receive adequate medical care. In Nigeria, there have been countless deaths due to counterfeit medications that move unhindered from production plants, across national borders and into unsuspecting markets. Corrupt public officials mean that the environmental regulations remain unenforceable, resulting in lost livelihoods, illness and social displacement for millions. Corruption also means greater business risks as it distorts markets, discourages foreign direct investment, and stifles cross-border trade. "Corruption has become very ingrained in society," said Correa. "The whole corruption climate in some countries is contaminating individuals at every level." NGOs, however, acknowledged that the discussion on fighting corruption has become much more relevant in the last few years as many governments have upped their commitment to stamping it out. *This story was produced for the TerraViva Millennium Development Goals Journal.

From Inter Press Service (subscription), World, by L.A. Nguyen - September 15, 2005

Global Experts Discuss Risk Governance

Beijing - More than 350 economists, scientists and management professionals from around the world convened here Tuesday to discuss a global strategy in implementing risk governance policies. The International Risk Governance Council (IRGC) 2005 General Conference is focusing on the prevention of global natural, economic and hygienic risks, establishment of emergency systems in various countries, and information exchanges between different countries.

Chinese delegates to the conference showed China's emergency system, which is still underway, and related research endeavors initiated by the Chinese government. Liu Yanhua, vice minister of science and technology, said at the inaugural ceremony that China is deploying the emergency system, which is targeted at an advanced early-alert mechanism against potential risks endangering national security. Liu said he hopes Chinese risk management experts can cooperate more with the IRGC and China should play a more active role in deciding international policies in risk governance. Considering that more and more global risks are comprehensive, transnational and quickly spreading, the international community needs to have a coordinated strategy in combating such risks, experts said.

From Xinhua, China - September 20, 2005

Preparation of WSIS in Tunis Enters Last Phase with Meeting in Geneva

The final preparatory meeting for the forthcoming Tunis Phase of the World Summit on the Information Society opens today at the Palais de Nations in Geneva with UNESCO observers participating throughout the two week event. The meeting, which is expected to welcome some 1'500 participants from UN agencies, the private sector, civil society and the media, will work to finalize the working documents of the Summit, scheduled to take place in Tunis from November 16-18. Key agenda items include: Internet governance, Financing mechanisms, WSIS follow-up and implementation.

While general agreement has been reached on ICT financing strategies following the work of the Task Force on Financing Mechanisms, set up by UN Secretary-General Kofi Annan following the first phase of WSIS in Geneva, 2003, Internet governance remains a highly contentious issue. In a bid to build global consensus on this complex issue, the multi-stakeholder Working Group on Internet Governance (WGIG), established after WSIS 2003 to investigate and make proposals for action by the Summit's second phase, was charged with arriving at a working definition of Internet governance, identifying relevant public policy issues, and developing a common understanding of the roles and responsibilities of different stakeholders.

The final report of the WGIG, released on 18 July, will serve as the catalyst for ongoing debate on this issue at PrepCom-3. UNESCO has consistently advocated the principles of openness, the free flow of information and freedom of expression that should rule Internet Governance. In general, UNESCO's engagement with WSIS has been creative and constructive. Its distinctive contribution has been the elaboration of the concept of building knowledge societies, qualified by four key principles, namely: freedom of expression; quality education for all; universal access to information and knowledge; and respect for cultural and linguistic diversity.

UNESCO's position has been that, as both a description of present trends and as a characterization of a desirable future, the notion of a single global information society does not capture the full potential of the information and communication revolution for human development. By contrast, the concept of "knowledge societies" stresses plurality and inclusiveness instead of global uniformity. It maintains that the new technologies offer remarkable possibilities for advancing development. With these messages, UNESCO has helped to open up the Summit's agenda and make it more relevant to the concerns of all Member States.

From ONU (Communiqués de presse), NY - September 18, 2005

Worlds Apart: Global Summits Highlight Digital Policy Divide

The International Telecommunications Union (ITU) and World Intellectual Property Organization (WIPO), which focus on global policy and standard setting for telecommunications, patents, copyrights, and trademarks, are situated directly across from each other on a Geneva street in the heart of the Swiss city's United Nations district. As visitors leave the buildings, the road that separates the two agencies forks in several directions.

Over the next two weeks, the ITU and WIPO will serve as ground zero for intense discussions on the future of policies that will greatly impact on the Internet. Negotiators at both meetings will also face a fork in the road. Pressure is mounting to turn in a new direction, away from a U.S.-centric approach toward one that better addresses the developing world's technological needs. This week the ITU is hosting a preparatory conference on the World Summit on the Information Society. While the summit is scheduled for mid-November in Tunisia, this preparatory conference is tasked with laying the groundwork for a global agreement on Internet governance issues.

Although most Internet users pay scant attention to Internet governance, in recent years dissatisfaction has grown with the current system under which the United States retains ultimate control over the Internet's core technical functions. There are several reasons for this dissatisfaction. First, the importance of policy issues associated with Internet governance has become increasingly clear. Many experts engaged in Internet policy are unhappy with the way in which key issues, including privacy protection for domain name owners, the free speech implications of domain name dispute resolution, and the failure to introduce internationalized domain names that would allow Internet users to create domains in their local language, are addressed.

Second, many observers are frustrated by the lack of transparency associated with the Internet Corporation for Assigned Names and Numbers (ICANN), a California non-profit corporation mandated by the U.S. government to lead the Internet governance issue. Critics argue that ICANN's decision-making lacks transparency, that it has ignored commitments to incorporate Internet users into its board governance structure, and that it has bungled crucial issues such as the development of new domain name extensions. Third, and most important, much of the world is no longer comfortable with surrendering de facto control over the domain name system to the U.S. government. That discomfort has led to proposals to internationalize ICANN or to strip from its mandate those activities that have a direct impact on national sovereignty.

Although the U.S. has thus far indicated that it is unwilling to yield control to an international body, negotiators will be seeking a compromise to foster dialogue that may eventually lead to a framework that better addresses the interests of the global community. Across the street, WIPO will be hosting its annual general assembly, a gathering that charts a course for the future work of the organization. The WIPO Development Agenda, introduced by Brazil and Argentina last fall to focus on developing country concerns, will take centre stage. During the past year, the Development Agenda quickly gained momentum, garnering support from developing countries throughout South America, Asia, and Africa. Joseph Stiglitz, a Nobel Prize-winning economist, recently confirmed the developing world's concerns, concluding that "intellectual property is important, but the appropriate intellectual property regime for a developing country is different from that for an advanced industrial country."

Last year's approval of the WIPO Development Agenda set in motion two sets of activities. First, civil society groups began work on an Access to Knowledge Treaty, which could include provisions on access to medicines and globally funded research, open access to scholarly research, as well as exceptions to patent and copyright laws that serve the developing world's interests. Meanwhile, WIPO hosted several meetings to decide whether to continue the Development Agenda. After much discussion, the European Union voiced its agreement with the developing world's concerns, and recommended continuing the agenda as a standalone project. The primary opponent was the United States, which, with support from Japan, argued that existing technical initiatives are sufficient to meet the developing world's needs.

While the ITU and WIPO meetings are distinct, both reflect the developing world's increasing frustration with global rules that have an enormous impact on technological development everywhere yet were crafted primarily with the developed world in mind. With the importance of the Internet and new technologies readily apparent to all, those countries are clearly no longer content to sit on the sidelines as their interests go unrepresented. Moreover, the two events have unfortunately reduced Canada's role to that of a bit player on the global Internet stage. Despite Prime Minister Paul Martin's repeated commitments to the developing world, Canada has quietly backed the United States on both the Internet governance and WIPO Development Agenda issues. That position puts Ottawa at odds with the developing world and fails to recognize that the national interest lies with a globalized approach that benefits countries both the rich and poor. ITU and WIPO negotiators may be facing a fork in the policy road over the next two weeks, but Canada sadly appears to be unsure of which direction to turn.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

From Canada.com, Canada, by Michael Geist - September 22, 2005

Benchmarks to Assess Performance of Governance Institutions

Accra - Governance experts from various institutions in Africa, Netherlands and the United States of America, are meeting in Accra, to develop plans for implementing appropriate benchmarks and frameworks to assess the performance of key governance institutions. The two-day Accra Conference, being jointly organised by the Ghana Centre for Democratic Development (CDD-Ghana) and the Consortium for Development Partnership (CDP), North-Western University, United States, is the first stage of the process in the creation of an African Governance Watch. The African Governance Watch (AFW), a four-year pilot research programme of the CDP, seeks to respond to the challenges of building the institutional capacity for governance in West Africa by developing appropriate benchmarks and frameworks for assessing the performance of key institutions of democratic governance.

Speaking on the first day of the meeting, Prof. Emmanuel Gyimah-Boadi, Executive Director of the CDD-Ghana, said it was inalienable and acceptable fact that good governance had become an important factor for Africa's renewal and growth. Citing reports from a number of institutions, including the World Bank; United Nations agencies; Africa Commission; New Partnership for Africa's Development and the Millennium Challenge Account, Prof Gyimah-Boadi said good governance had been also extolled by the African Union as pre-requisite for development. That, he said, however, required that key governance institutions should be identified, studied to identify their strengths and weaknesses, to develop a framework to replicate success stories in other areas. "If governance is about checking of power, then in Ghana, we have to look at institutions like the Legislature, Executive, the Judiciary, the Commission on Human Rights and Administrative Justice and the Electoral Commission," Prof Gyimah-Boadi said later, in an interview with the Ghana News Agency (GNA). "For every country, there should be principles for the identification of those institutions, and which to prioritise," the CDD-Ghana Executive Director said.

He called for the avoidance of duplication of research projects, but noted, however, that new research projects added new dimensions and information and were slightly different from former ones. He also called for research findings to transcend political leaders and scientists to involve all stakeholders to ensure broader ownership of projects. It was also the duty of all national development stakeholders, such as civil society and the media, and not just the political elite to absorb and utilise research information, Prof Gyimah Boadi said.

From GhanaWeb, Ghana - September 20, 2005

United Nations Anti-corruption Convention Enters into Force December

Dakar, Senegal - The UN Anti-Corruption Convention adopted in 2003 goes into force 14 December 2005, after its ratification by the required number of States, the UN Office on Drugs and Crime (UNODC) announced here Wednesday. Thirty countries, including 15 from Africa, ratified the convention, which some 129 countries have already signed, UNODC said in a dispatch to PANA. UNODC executive director Antonio Maria Costa said "the convention offers to African countries the legal tools necessary to transform their economies and provides member states the useful guidelines for the elaboration of a coherent strategy to fight corruption". He noted that it was "now a collective responsibility" throughout Africa, Asia, Europe, the Americas, "to track down the money embezzled and to eliminate the tax havens that corrupt leaders use to hide their crime".

From AngolaPress, Angola - September 22, 2005

 
 

NHIS: Federal Civil Servants Issued Identity Cards

Minister of Health, Prof. Eyitayo Lambo, yesterday said the first phase of National Health Insurance Scheme (NHIS) commenced yesterday with the issuance of health insurance identity cards to all registered federal civil servants in the country. He made the presentation of the Identity cards to the Head of Service of the Federation, Alhaji Ahmed Yayale, said issuance of the health cover to federal civil servants alone was in compliance with the directive of President Olusegun Obasanjo to take the scheme in phases. He said other sectors in the nation's workforce would benefit from the scheme before the expiration of 2015 MDG dateline for attainment of universal health coverage.

The minister said the issuance of the health insurance identity cards signifies the full implementation of the a cashless health care delivery service in the country. He said the mere possesion of the identity card confers on the owner express access to health care services anywhere in the country. "The formal presentation of National Insurance Scheme identity cards to the Head of Service of the Federation is an epoch-making event, because the possesion of an identity card confers on the owner the automatic access to health care services from the provider of his or her choice," he said.

While saying success of the scheme would depend on partnership by stakeholders, Lambo said the planned deduction of five per cent of basic salary of benefitiaries would not commence until after 2years of takeoff of the scheme.He said NHIS has commenced a nationwide documation study of community based social health insurance scheme,ahead of the take off of 12 pilot project of community based approach in 2006.

From This Day (subscription), Nigeria, by Chuka Odittah in Abuja - September 14, 2005

Civil Service Reform Programme to Be Introduced into Somali Region

The new civil service reform programme will soon be implemented in the Somali Region. Speaking to reporters at his office on Wednesday, the chairman of the Somali Peoples' Democratic Party (SPDP), Ambassador Mohammud Dirir, who is also the Minister of Mines, said in the process of the implementation of the reform documents of the personnel in the various departments of the region will be strictly verified for authencity and posting will be made accordingly. In the event of lack of qualified persons, the Minister said, qualified candidates will be welcomed from other regions.

Speaking about the recent elections in the region, the Minister said the participation of the majority of the people had made the outcome of the election fruitful. He, however, said that three districts out of 51 in the region had decided to exclude themselves from the elections. "We want to have a discussion with them and reach a consensus for we want them to take part in the development programme of the region," he stated.

From Addis Tribune, Ethiopia - September 13, 2005

Public Service Move on Jobs 'No Reversal'

The government's willingness to re-employ any skilled South Africans who have left the public service was not an indictment of the policy of affirmative action, the presidency said yesterday. "It is not a judgment on affirmative action. It does not say affirmative action will stop," said presidential spokesman Murphy Morobe. Deputy President Phumzile MlamboNgcuka said on Wednesday that government was willing to re-employ skilled citizens wishing to return to public service. She was responding in the National Assembly to a question by Democratic Alliance MP Willem Doman about the skills shortages in local government due to transformation and employment equity targets.

Mlambo-Ngcuka said many of those who left were not "chased out", but had simply opted for greener pastures. "You will have to produce proof of people who want to come back, who have been kicked out," she said. "We would certainly be willing to look into those cases because we are indeed looking to reinforce capacity." Approached for a clarification yesterday, Morobe said the deputy president was reaffirming the principle that all were welcome in the public service. She was doing so in response to the repeated claims by the opposition that white people had been "driven out". Her statement did not refer specifically to whites who left because of affirmative action. "She did not state any exclusions. "She did not state race, gender or sexual preference." Morobe said. No department official could be reached for further comment.

From Business Day, South Africa - September 16, 2005

Niger Civil Servants Get First Pay Rise in 25 Years

Niamey - Civil servants in Niger, one of the world's poorest countries, will receive their first pay rise for a quarter of a century next year, putting the lowest ranking workers on a salary of just over $3 a day. The government granted the 10 percent wage increase, the first since 1980, after two months of negotiations with the West African nation's main unions. It also pledged to pay off salary arrears and recruit more young graduates. "We owe this result to the sense of responsibility shown by all the parties involved," civil service and labour minister Siptey Kanda said late on Saturday after signing the agreement.

Niger ranked bottom of the United Nations Human Development Index of 177 countries this year, a report which rates countries on criteria including life expectancy, literacy and income. Many of Niger's people live in mud-brick buildings in the vast tracts of savannah that border the Sahara desert. One child in four dies before the age of 5 and 85 percent of the population lives on less than $2 a day. Drought and a locust invasion last year exacerbated its woes, leaving 3.6 million people hungry as crops failed. French medical charity Medecins Sans Frontieres (MSF) said on Friday children were still starving to death in the country despite a flurry of recent aid efforts triggered by harrowing images of emaciated young people in the world media. The pay increase, which will see the lowest public sector salary rise to 52,250 CFA ($98) a month from 47,500 CFA ($89), will take effect from January 2006.

From Reuters AlertNet, UK - September 18, 2005

Government Pledges Permanent Attention to Civil Servants

Luanda - The poor performance and low education that affect civil servants in Angola should get a permanent attention from everyone, it was said on Tuesday in Luanda by the minister of Public Administration, Employment and Social Security, Antonio Pitra Neto. The minister said so during the opening of the sixth Events of Civil Servants going until Thursday in Luanda. To the minister, many civil servants have a poor performance and low education and are irregularly distributed in the country. According to him, the ongoing forum will produce contributions helping the state`s institutions to take measures that bind them to learning. He further stated that this measure aims at making of it not only a priority, but also a "passion" to holders and personnel of administration posts towards the challenges of the country`s reconstruction and development. To the purpose of regulation, the minister also said, during the session, a project will be forwarded for discussion, with the main aim of institutionalising rules and mechanisms enabling the public organisms to come up with training programmes. The approval of the said project intends to propose the participation in training to become as an important criterion, not only in the process of evaluation, but also of promotion of civil servants, added the minister.

In his address, Pitra Neto highlighted the need for the creation and generalisation of a culture and attitudes turned to training coupled with merit and competence. The government official also called on the participants not to consider training as a residual or exceptional activity for the public services, neither overlook the training opportunities the national institutions may provide for.

In order to boost training in the public services at short and medium term, the minister suggested that a set of measures be put in place, including the creation of legal and institutional mechanisms to relate managing posts to success in specific training. Another measure mentioned by the minister has to do with the need for the introduction or strengthening of the "training-contest" element in the so-called "state careers", as a mechanism of admission in such careers as of diplomacy, judicial magistracy, customs services, fiscal administration and inspection services. He also spoke in favour of the development of information technologies opportunities benefiting the public servants training system.

The 6th Events of Civil Servants are going under the motto "Human Capital and Public Services Quality" and will tackle topics of interest to the development of training programmes for public servants. Three panels will handle the following topics: "Angola`s civil servants training policy", "Impact of training in the quality of public services to customers and public administration" and "Information and communication Technology in the training process".

From AngolaPress, Angola - September 27, 2005

 

Reforms Target Service Delivery

The need to improve the delivery of its service is one of the main reasons for the Civil Service Reform, says Public Service Commission chief executive, Anare Jale. Mr Jale made the comment at the Civil Service and Private Sector Partnership towards service Excellence function at JJ's on Thursday. The function was held to give the members of the public and private sector a chance to foster partnerships and to discuss details of the Service Excellence Awards. Mr Jale said other reasons for the reform included the need to focus resources on capital development and investment promotion. "This could be done by reducing the operational cost of running the machinery of government, driving productivity in our workforce and improving transparency and accountability," he said.

"In its efforts to boost productivity and instill a culture of excellence in the civil service, the Performance Management System and the Service Excellence Awards framework were endorsed and implemented by the Government in 2004 and 2005 respectively," he said. The Service Excellence Awards framework has been modelled on the Fiji Business Excellence Awards and the PSC worked with the Training and Productivity Authority of Fiji in the implementation of the framework in the Civil Service, he said. "Evaluations of all 46 agencies of Government would be conducted to assess the level of commitment and action taken to implement service improvement and quality measures in Government agencies," said Mr Jale. He said the inaugural Service Excellence Awards would be held in October 2006 to recognise agencies that had demonstrated commitment and achievement in the pursuit of quality.

From Fiji Times, Fiji - September 7, 2005

Civil Service Review

The Public Service Commission will present its intention of reviewing the staffing size and functions of the civil service to Cabinet later this month. The review, which is the brainchild of commission chairman Stuart Huggett, is in its final stages. Mr Huggett said the review will be radical and will be the second one within three years and is allowed under the Public Service Act. Mr Huggett said the review was necessary after the performance review process for chief executive officers was criticised for its complex nature. "We were not happy with the evaluation process for the CEOs and we could end up with a much more objective process as it will be done in the review of the service we want to do," Mr Huggett said. Out of the 23 CEOs evaluated, only two will receive bonuses for their performance.

From Fiji Times, Fiji - September 5, 2005

Centre for Shared Services to Save Civil Service Up to $4m in Costs

Some $3m to $4m in savings - that's what the new Centre for Shared Services will bring to the Civil Service when it starts operations in April next year. Civil servants can also look forward to more efficiency when processing their human resource and finance activities. The new Centre for Shared Services, which comes under the Finance Ministry, will be located at the National Development Ministry building at Maxwell Road. It'll provide human resource and finance services to 17 agencies - including those in the Education and Home Affairs Ministries.

So what will it mean for civil servants? HR and finance functions, including staff salaries and benefits, will come under one roof - all to bring down costs through economies of scale, standardisation and streamlining of procedures. The hiring of workers will remain with the ministries. But the Finance Ministry says this does not necessarily mean there'll be one mega centre for shared services for the whole Civil Service. This is because different ministries have different rules and schemes. For instance, the Defence Ministry already has its own shared service centre. So it will not be part of this initiative. The Defence Ministry saved nearly $3m when it implemented the system in 2003.

But will such streamlining result in job cuts? Lim Siong Guan, Permanent Secretary for Finance Ministry, said: "We are not expecting it in this exercise. We are inviting everyone performing these functions in the ministries, departments to come over and join the centre. So whoever accepts the invitation and comes over will be assured of a job." The centre will serve 85 per cent of the Civil Service initially and expand to other ministries in 2007.

From Channel News Asia, Singapore, by Farah Abdul Rahim - September 1, 2005

Proposals for Civil Servants to Retire at 58

The retirement age for 850,000 civil servants may be increased to 58 years by next month. The move is to address a burgeoning pension bill. New civil servants may also have to contribute a percentage of their salary to a pension scheme with government input, similar to the Employees' Provident Fund. The moves come as the Government mulls over the financial implications of a pension bill that has tripled over the last decade. It cost the Government RM4.96 billion last year, a RM3.36 billion increase over the allocation in 1994. The number of pensioners and pension recipients jumped from 305,000 to 513,689 in just a decade from 1994.

The idea behind the higher retirement age is to eventually reduce the pension payout from government coffers in the years to come. Sources said this had been achieved in certain countries. "In Belgium, where men retire at 58, the average retiree costs the pension system 60 per cent more than in Iceland where men work until 69," said a source, who explained that the pension bill became smaller when the retirement age was extended. Malaysia and Brunei are probably the only two countries in the region where civil servants retire at 56. It is 62 in Singapore and 60 in Thailand. Former Prime Minister Tun Dr Mahathir Mohamad raised the retirement age from 55 to 56 in 2001.

The pension contributory scheme would likely be handled by the EPF or Kumpulan Wang Amanah Pencen. "The scheme will be on par with that enjoyed by civil servants under the EPF scheme as well as employees in the private sector," the source said. Now, workers contribute 11 per cent of their basic salary to the EPF every month and employers top it up with another 12 per cent. Workers may contribute more if they wish to do so, an element expected to be extended to government employees. The contributory scheme, arising from a study by the Public Service Department to reduce the pension bill, is expected to follow the Indian model implemented on Jan 1 last year. From that time, all new federal civil servants in India have been required to contribute 10 per cent of their salary, a percentage matched by the Government.

"In most countries, pensions constitute the largest element of social protection expenditure, and in some instances exceed the amount spent on health care," the source said. "Also, in many countries, pension systems are maturing as the number of people drawing benefits rises and entitlements increase, what more with higher life expectancies." A factor taken into consideration is the fact that upon death, money may still go to the family. The continuing pension bill after a pensioner's death was also a factor taken into consideration by the Government. "Imagine paying a retiree a pension for decades and when he dies, his spouse gets it. There are cases where a pensioner has been paid pension for a longer period compared to the years of service he had put in," he said. After their death, a percentage of the pension would also go to children still studying. Another reason for the contributory pension scheme was the fact that the Government had to fork out hundreds of millions of ringgit to retirees whenever there was a salary adjustment for civil servants.

From New Straits Times, Malaysia, by Sarban Singh - September 2, 2005

Future Fund Must be Away from Government: IMF

A fund being created to cover the superannuation payouts of federal public servants should be put even further out of the reach of the government, the International Monetary Fund has said. In a report covering the Australian economy, the fund also canvassed the government's proposed Future Fund and made a series of recommendations on how it could be improved. The fund is being created to cover the unfunded super liabilities of public servants, and is to be funded by future budget surpluses.

However details on the fund, including who will manage it, have yet to be decided. The IMF said although the government had pledged the fund to be independent, it believed more could be done to ensure its independence. This could include the use of an independent committee to nominate the members of the fund board, or legislation that establishes the fund's accountability mechanisms. "It will be important to have a clear commercial objective of the Future Fund, and suitably strong disclosure requirements will enable close scrutiny of Future Fund operations by the public," it found.

The IMF said there were no compelling economic reasons to impose portfolio limits on foreign investments by the fund. It said the fund, expected to reach about $90 billion, was small in comparison to other superannuation funds. "The location of investment of the Future Fund is unlikely to have a significant impact on the exchange rate given that there are already large cross border capital flows from the private fund activities," it said. The fund said the government should consider banning the Future Fund from taking a controlling stake in a domestic company, because of conflict of interest issues. The fund should also have as broad a range of investments as possible, including in nominal domestic debt and foreign equities. "(This should) reduce the impact of macroeconomic shocks on the financial position of the government," it said.

From The Age (subscription), Australia - September 13, 2005

Code of Ethics for Civil Servants and Ministers

A draft of the Public Service Bill, outlining the parameters of the powers and duties of civil servants, is being circulated to sound trade unions. The latter's response has been positive so far. "The publication of the bill shows that the government has the will to discuss with unions before it is introduced in Parliament," declared the president of the Federation des syndicats du service civil (FSSC), Tulsiraj Benydin.

The bill will include a code of conduct for civil servants. It points out that they should remain apolitical and serve the interests of the government of the day and the whole population. The civil service should become the "executive arm of the government". The bill should also promote the values and qualities of the public service. It should help to set up a legal and institutional framework to manage the civil service. It will define the powers, functions and responsibilities of supervising officers and define the duties of civil servants. This code of conduct for civil servants will also state the powers and duties of advisers. A Pay Research Agency is included in the bill.

The public service bill also aims at protecting civil servants' rights. No one will have the right to dismiss, sack or downgrade employees unless the latter are subject to disciplinary measures and legal procedures. Ministers have not been left aside; the bill insists that their political affiliation should not encroach on their status as minister. They will have no right to use the State's resources for party political purposes. With the beginning of the campaign for municipal elections, ministers should already start applying such good intentions.

From Express Outlook, Mauritius - September 21, 2005

Civil Servant Pension Plan is Still Up in the Air

A plan to lower the replacement rate of income for retired public servants is still under consideration and discussion, Examination Yuan President Yao Chia-wen said on Tuesday. The replacement rate of income is the ratio of monthly pension to average monthly salary prior to retirement. Civil Service Minister Chu Wu-hsien has said earlier that the income replacement rate for public servants is between 60 percent and 75 percent in most countries while in Taiwan, it exceeded 100 percent for about one-third of the country's retired public officers.

Yao stressed that the Examination Yuan is planning to reform the pension system, but explained that the entire program is still under discussion and that no formal decision had been reached yet. Yao said that the reform, as well as promotion of the project, is the most important task for the Examination Yuan for the time being. There are three stages to reform, with the first stage being identification of problems or phenomena that could become problems, Yao explained. The second stage is to find out why those problems or phenomenons occur, and the last stage is to find solutions to those problems, he added. Yao likened the process to a doctor first examining a patient to find out the cause of his illness then prescribing the right medicine.

"At present, the problem regarding the income replacement rate among public servants is in the second stage," Yao said. "The Examination Yuan is still looking for the cause of the problem." He further explained that it would take time to advance to stage three because the problem is so complex, involving the law, the pension system and politics. Therefore, the Examination Yuan cannot make rash decisions on the issue, particularly as it has to take social responses into consideration during the problem solving process, Yao said. Chu, meanwhile, noted that over 50 percent of retired public servants, whose income-replacement ratio is over 100 percent, are retired teachers. This is however not the case among most military personnel, except for officers, he added. At present, the replacement rate of income for some retired public servants is over 120 percent, which demonstrates the need for reform of the system, Chu said. According to Yao, the Examination Yuan wants to design a complete and faultless system for public service personnel in the 21st century with reform of all aspects, including, examination, civil service, civil service protection, training and civil service pensions.

From eTaiwan News, Taiwan, by Chang Ling-yin - September 21, 2005

Participatory Government Employs Million-Man Civil Service

The Roh Moo-hyun government employed 936,387 people as of late 2004, the most ever, data from the Ministry of Government Administration and Home Affairs, the National Statistical Office and the Civil Service Commission show. The number exceeded the previous record of 933,899 public servants in 1997 under the Kim Young-sam administration. The number of public officials declined to 870,000 after the 1997 financial crisis, when the government reduced the number of public officials to tackle the financial crunch. But their numbers had swelled to pre-crisis level seven years on.

The increase puts a bigger burden on the public purse. According to materials submitted by the National Assembly Budget Office to parliament on Tuesday, the rise cost W439.6 billion (about US$439 million) more than originally budgeted in 2003 and W466 billion more in 2004. President Roh Moo-hyun is credited with the remark that there is nothing wrong with the large size of the government if public officials work efficiently.

From Chosun Ilbo, South Korea - September 28, 2005

 

Shaking up the Greek Civil Service

Greece's head of government has taken on a big gamble. Braving the political cost, Prime Minister Costas Karamanlis decided to break with longstanding tradition whereby governments treated the Thessaloniki International Fair as a platform from which to announce handouts and social benefits drawing on funds that did not really exist in the first place; "borrowed" is the word.

Opposition parties and a section of the media immediately rushed to slam Karamanlis's stand as opposing the interests of the lower-income groups. And indeed, disillusionment is growing among the less well off in society. Karamanlis has followed the path of truth. And rightly so. It's high time that the pathetic farce of September handouts from the TIF podium came to an end. A country that is plagued by huge deficits and mammoth debt cannot afford to promise welfare policies of the kind advertised by the purported architects of a "powerful Greece." Being sincere on the big problems besetting the country's economy, and avoiding attempts to sweep them under the carpet, has become a prime test of political credibility. These days, only a politician attempting to bamboozle the public would dare announce popular measures.

The New Democracy leader has a clear intention to fix the country's fiscal situation and reform the country's broader public sector. The government must urgently promote reforms as the public is finding the burden too heavy to shoulder. But the proposed reforms will not yield fruit and stronger growth will not come unless the government moves swiftly to shake up the inflexible and sluggish civil service. It's highly unlikely that the public administration can, in its current shape, carry out the government's policies. The success of conservative reforms depends on the degree of effectiveness of the country's civil servants. The government must make sure that its policies are implemented in the most efficient way. That is necessary if the country wants to escape the trap of deep debts and low productivity. It's also necessary if Karamanlis wants to look people stuck in the lower-income strata - the section most strained by the government's reforms - straight in the eye.

From Kathimerini, Greece - September 13, 2005

British Chambers of Commerce Calls for Public Sector Retirement at 65

The British Chambers of Commerce (BCC) has called today's pensions speeches to the TUC conference a 'disappointment' after no pledge was made to raise the public sector pension age to 65. Neither the pensions commissioner, Adair Turner, nor trade and industry secretary, Alan Johnson, said the age of retirement would be raised from 60 to 65, although Johnson did say that the government did want to change the retirement at 60 ethos. "However, this is in the context of preserving high-quality, defined-benefit, index-linked pension schemes, making improvements to other elements of the schemes, preserving current arrangements for existing staff for almost a decade and introducing arrangements which give individuals a choice about when they retire - be it aged 60 or 65, or later," he said. "We can only deliver this within a scheme that is capable of withstanding the demographic changes that are bound to have a radical effect on pension provision." He made allusion to the threat of mass strikes after the government tried to impose a rise in pensions ages for public servants before the general election.

"Public servants have a right to expect proposals to change their pensions arrangements to be discussed and negotiated with their trade unions," he said. "That wasn't happening before - I hope that Brendan [Barber] and his colleagues accept that it's happening now." BCC director genera David Frost said it was vital that the public sector pension age is increased as public sector pensions liabilities are now at nearly £700bn. "This will bring those workers into line with their private sector counterparts," he said. "In addition, failure to take such action would see pensions costs growing even larger, placing yet more strain on business that has to fund this bill." "Government is constantly telling employees in the private sector that they must take greater responsibility for saving towards their retirement. The time has come for public sector workers to grasp this nettle and accept that they must work longer and contribute more to their pensions".

From PersonnelToday.com, UK - September 14, 2005

MEA Calls for 6% Reduction in Public Service Employment

The Malta Employers' Association yesterday called on the government to reduce public sector employment by six per cent over the coming five years in a bid to lower the government's wage bill and to release surplus employment for the private sector. The proposal is one of many detailed yesterday by the MEA in its combined analysis of the government's pre-budgetary For a Better Quality of Life (BOQL) document and its National Reform Programme (NRP).

Addressing the press yesterday, MEA president Arthur Muscat explained: "With today's level of public service employment being exaggeratedly elevated, at 33 per cent of Malta's total gainfully employed population and constituting 65 per cent of government's wage bill, the MEA has proposed that this level be reduced to 27 per cent of those gainfully employed – a figure in line with many of Malta's fellow EU member states." The MEA's paper goes into further detail and states that while visible progress has been made in this regard, in that public sector employment has fallen over the current year, "this remains a high and unsustainable segment". The paper, released yesterday, indicated that "such a shift in employment from the public to the private sector, provided that the economy is competitive enough to absorb such labour in private enterprises, will have a substantial positive impact on the fiscal balance. "The MEA is convinced that this is a realistic target and that the holistic application of the recommendations contained in the BQOL and the NRP will make it achievable if they have the support of the social partners."

Among the advantages of reducing public sector employment, the MEA lists a reduction in the fiscal deficit without resorting to additional taxes, creating a larger labour force for the private sector, the freeing up of Malta's human resources for more productive use, enabling the government to reduce taxation and stimulate growth in the private sector and enabling the government to have a leaner workforce with more resources to give better salaries to a number of underpaid professions such as doctors.

In the absence of a social pact, despite the frantic attempts by the Malta Council for Economic and Social Development (MCESD) last November, the MEA believes that this year's pre-budget BQOL document could very well serve as a suitable alternative. Through this document, the government has set a plan of action for the next five years on the basis of its consultations with the social partners and civil society. Mr Muscat added: "Given that government's pre-budget paper provides for the years 2006 to 2010, the MEA is pleased to note that the document provides for a five-year vision, and that it has addressed several aspects discussed within MCESD in its failed attempt to form a social pact to bring the country forward."

The MEA's paper elaborates further on the issue: "The BQOL, as a pre-budget document, is a positive departure from earlier practices because it has been issued well before budget day, and also because it sets five-year targets and action plans. This allows for better consultation and also projects a national vision for the coming five years, rather than a one-year forecast which, by nature, is very restrictive." According to the association, many of the ideas outlined in the BQOL and the NPR are the fruit of many years of debate and consultation, with the result of defining a clear sense of direction and strategy. "Clearly, the time is ripe to move from discussions to implementation," the paper states. "The country must develop Malta, and not its separate features, as a product. The many valid initiatives outlined are in themselves important features but are still, to date, disjointed efforts that do not collectively present a finished product that can truly brand Malta. "Government policies should focus on filling the gaps in between to combine these features into a distinctive product and also, with the participation of the social partners and civil society, to identify the missing ingredients that will make Malta a feasible and profitable enterprise.

"The MEA is confident that if there is the will to embrace and instigate change, the country stands a better chance of achieving its aspirations." Of the five main areas identified by the NRP – sustainability of public finances, competitiveness, employment, education and the environment – the MEA holds that while all five areas need to be prioritised, it is the area of competitiveness that is most pressing. "It is only through a more competitive economy that the objectives in other areas can be achieved. Otherwise, public finances will deteriorate further, jobs will not be generated, education will not lead to rewarding careers and environmental issues will remain on the back-burner."

In addition to delving into detailed discussions on topics such as the government's economic performance, upgrading workforce skills, Malta's entrepreneurial culture, tertiary education, the digital divide and housing and property, the paper also proposes and details a number of innovative projects the country could capitalise upon. These include the establishment of Malta as a health centre, an international diplomatic centre and an educational centre. Also proposed are the promotion and spread of organic farming in Gozo, the increased generation of alternative energies across the islands' – including offshore wind energy generation – and an annual maritime pageant during the regatta featuring realistic examples of ships representing the Islands' rich maritime history. The MEA's wide-raging paper can be viewed on the association's website at: www.maltaemployers.com.

From Malta Independent on Sunday, Malta, by David Lindsay - Sep 28, 2005

 

Ottawa Confirms Civil-service Overhaul

Ottawa - Government's shifting position on plan prompts complaints from Liberal MPs - Treasury Board President Reg Alcock is confirming that he wants to move forward with a dramatic shuffle of the public service that will eliminate jobs over several years, just a few weeks after cabinet and his own office denied such a move was under serious consideration. The sudden change has at least two Liberal MPs complaining that Mr. Alcock's lack of clarity is causing them headaches in their Gatineau, Que., ridings, where the local economy depends on thousands of public service jobs. "While Alcock is getting great press, while Alcock is presenting himself as the guy who's going to save everything, he is actually creating a heck of a lot of uncertainty and panic within the civil service," said Marcel Proulx, the MP for Hull-Aylmer. He said Mr. Alcock should have announced the plan in full or brought the civil service unions in as partners. Gatineau Liberal MP Francoise Boivin also expressed frustration at the conflicting messages from members of cabinet. "Are they that close to the finished project? If so, there might be a problem along the way because most people don't seem to know what's happening," Ms. Boivin said. "When you get conflicting messages, it brings a red light in my direction."

The Globe and Mail reported last month that senior officials are in the final stages of a plan to streamline public service jobs. The restructuring would involve streamlining what is now four areas to create more "shared service" organizations. An internal study found 41,000 employees are providing administrative services such as IT and human resources support that could be centralized. One of the officials involved in the study said it was too early to say how many jobs the new plan would create. But the official said that it would be fewer than the 41,000 jobs that would be lost. Transport Minister Jean Lapierre dismissed the study last month as "a document lying around somewhere in Treasury Board" and Mr. Alcock's spokeswoman said the minister had not even been briefed on its contents. Yet an interview published during the weekend in the Ottawa Citizen quotes Mr. Alcock saying any suggestion the government isn't moving to shared services is "just silly."

Mr. Alcock confirmed there will be "position reductions" but that they can be achieved over time through attrition because many public servants are approaching retirement age. "The argument in favour of doing this - in terms of staff, costs, efficiency, ability to plan and manage -- are just so powerful that any thought that we wouldn't go there [is] just silly," he has been quoted as saying. Although similar, the move to shared services is separate from a new agency called Service Canada that was announced in the February budget. Service Canada involves a similar streamlining of jobs across federal departments that offer services to the public. Shared services would consolidate jobs that provide services to other public servants. Lise Jolicoeur, a spokeswoman for Mr. Alcock, said the minister was not available to comment, but confirmed his position is that it would be "silly" not to move forward with some form of shared services given the number of new management options available through technology. "It would be silly to think that in some way we wouldn't move in this direction," she said. Michele Demers, president of the Professional Institute of the Public Service of Canada, said she is frustrated by the lack of information being provided to unions. "These people have nothing to tell us because they say the decisions have not been made. Well, what we're telling them is we would like them to talk to us before the decisions are made. "It would be nice to be part of it. If they want buy in, they're not handling it very well."

From Globe and Mail, Canada, by Bill Curry - September 7, 2005

Civil Service Overhaul Has History of Bipartisan Support

Four Presidents Sought Changes - The new administration wanted the government to run more like a business. The president's advisers had plenty of ideas: Get rid of the General Schedule, the 15-grade pay system that links pay to longevity. Free managers from complex personnel rules, and give them more authority to hire, reward and promote talented workers, and to discipline poor performers. Require agencies to develop more meaningful performance evaluations to send a message that promotions and raises depend on them. The president was Bill Clinton. The recommendations came in a 1993 report on the "reinventing government" initiative led by Vice President Al Gore. But the kind of restructuring that Democratic administration envisioned would not win approval in Congress until more than a decade later - under President Bush.

While critics charge that the campaign to overhaul the federal civil service is part of a Republican union-busting agenda, it actually reflects a bipartisan desire to wield more control over the bureaucracy's 1.8 million workers. The changes, especially those that aim to more strongly tie pay to performance, have been sought by both Democratic and GOP administrations over the last quarter-century. "It's kind of like an evolution of something that started a long time ago, and it's moving forward," said John Kamensky, former deputy director of Gore's "reinventing government" initiative. Paul C. Light, a professor of public service at New York University, said management experts in both parties have long itched to revamp the civil service system. "There's a lot of agreement that you need to . . . get out of the complexified, ossified system that we now have," he said.

Struggle to Revamp System - The modern federal civil service dates to the Pendleton Act of 1883, which replaced with a merit-based system the "spoils system" of doling out jobs through political patronage. Although there have been periodic overhauls, the arcane and complex nature of civil service rules has made changing them a tough sell in Congress and not a high priority for most administrations. In eight years of "reinventing government," the Clinton administration never found a way to get major civil service legislation through Capitol Hill, particularly in the face of resistance from federal employee unions. The Sept. 11, 2001, terrorist attacks on New York and on Washington changed everything. They placed the civil service structure at the heart of the debate over whether the federal government was adequately set up to protect the country against terrorism. Pressured by Democrats to create a Department of Homeland Security, Bush eventually embraced the idea but insisted on freedom from many civil service constraints in merging 22 agencies.

The changes underway are the biggest restructuring since the Civil Service Reform Act of 1978. Bush officials argue that the current system fails to tie pay to performance, and inhibits managers' ability to deploy people and resources to where they are most needed. Congress gave Bush authority to rewrite work rules covering more than 800,000 civilian employees at the departments of Defense and Homeland Security. Lawmakers hoped to begin implementing the changes this summer, but a lawsuit by the unions has delayed the process. Meanwhile, the administration has drafted legislation to allow nearly all federal agencies to make similar changes. The new personnel systems at DHS and DOD will replace the General Schedule with broad salary ranges that will enable managers to tailor pay packages to individual employees. The new systems will curtail the power of labor unions by no longer requiring management to negotiate over such matters as where employees will be deployed, the type of work they will do and the equipment they will use. They also will streamline the process for disciplining employees and hearing their appeals of any punishment.

The Bush administration's rhetoric resembles that of Democrat Jimmy Carter, who entered office in 1977 promising to revamp the federal bureaucracy and make it more responsive. In a speech in 1978, Carter described the system as a "tangled web" of complicated rules that had stifled merit and made it nearly impossible for a federal supervisor to fire someone. "You cannot run a farm that way, you cannot run a factory that way and you certainly cannot run a government that way," he said.

Carter's Civil Service Reform Act of 1978 did away with the Civil Service Commission, an entity that critics viewed as a powerful weaver of red tape, and divided its responsibilities chiefly among three agencies: The Merit Systems Protection Board to hear employee appeals; the Federal Labor Relations Authority to deal with labor-management relations; and the Office of Personnel Management to set policies to create a level playing field in hiring and pay for all federal civilian workers.

President Ronald Reagan took his stab at change, too. His Civil Service Simplification Act of 1986 would have consolidated the 15-grade General Schedule into broad pay bands, allowed higher starting salaries for hard-to-recruit jobs and extended merit pay to all federal employees. But the bill went nowhere. "It recommended essentially what's being recommended" by Bush, said James Colvard, deputy director of OPM at the time. "We had absolutely no political agenda. . . What's happened over the years is that the balance of power has swung so far over to the employee side, with management not having enough power to do things, that there needs to be some sort of a balance."

Despite the failures, a piecemeal civil service revolution was quietly underway. The 1978 law had authorized "demonstration projects," which freed selected agencies to test new personnel ideas in limited settings. The best known of these is at the Naval Air Warfare Center Weapons Division at China Lake, Calif., which for 25 years has operated under a pay-for-performance system. Other experiments have taken root at such agencies as the Federal Aviation Administration, the National Institute of Standards and Technology, the Patent and Trademark Office, and the Internal Revenue Service.

Provided Leverage - Bush took office in 2001 and began touting a five-pillar "management agenda" for improving government performance, including "targeted civil service reforms" to help agencies develop talented workers and better achieve their missions. But the idea of overhauling the civil service did not gain traction until after the Sept. 11 attacks. By linking the changes to fighting terrorism, Bush appeared to gain the political leverage his predecessors lacked, said Robert M. Tobias, former head of the National Treasury Employees Union. "If you look at the language of the DHS regulations, it's all about national security," said Tobias, now director of American University's Institute for the Study of Public Policy Implementation.

In April 2003, Defense Secretary Donald H. Rumsfeld went to Capitol Hill to say that the Pentagon needed a more "flexible" workforce to fight terrorism. He got what he asked for. And suddenly overhauling the civil service system government-wide did not look like such a political long shot anymore. "Some question our motives," said Clay Johnson III, deputy director for management at the Office of Management and Budget and the man charged with implementing the changes. "They just don't trust that we could be trying to do something here that would be good for employees. . . . We want the federal government to work better."

So, who wins and who loses? Federal employee unions predict a workforce demoralized by uncertainty over pay and boxed in by a system that curtails bargaining rights. "This is going to . . . really make it a second-class civil service," said John Gage, president of the American Federation of Government Employees. The administration forecasts better-functioning agencies. Analysts say managers will have a much stronger hand, and, more significantly, so will political appointees. "The civil service was invented in the 1880s to put in a balance in government to political corruption," said Frederick Thayer, an emeritus professor at the University of Pittsburgh's Graduate School of Public and International Affairs. "The civil servants were supposed to ask questions, especially if they had some kind of job security. The point now, as I see it, of wiping out civil service is to create a workforce that is so temporary and so job insecure that they dare not question any decisions made by their political superiors. . . . It's a bipartisan thing."

Bob Stone, director of the "reinventing government" initiative under Clinton, said the changes will make the government more responsive to the public, who elect the president, who brings in the political appointees. "When the American people elect a government, for better or worse, they want the government to work," Stone said. "I'm sure there are high-ranking people in the administration who are jumping at the chance to [undermine] the union, but that's not the reason that thousands of managers and supervisors all across the government are salivating for these kinds of changes. They are salivating because they want to do a better job of stopping drugs or equipping soldiers, or a better job of protecting the environment or a better job of providing medical care for veterans."

From Washington Post, United States, by Christopher Lee - September 4, 2005

 
 

'Why E-Government Has Not Taken Off'

Director General of the Nigeria Information Technology Development Agency (NITDA), Prof. Cleopas Angaye has explained why the much-publicized e-govt has not taken off fully despite repeated assurances in the past that it would soon be flagged off by the President. This is even as the Special Assistant to the President on ICT, Emmanuel Arinze spoke of the commitment of the Obasanjo administration to the development and deployment of ICT in the country. Angaye who spoke at a press conference held in the premises of Omatek, the local computer manufacturer, attributed the delay to the need for the integration of the different systems and the inability to put in place the identifier system yet. "It is not in the interest of the project to start off with stand-alone systems" he explained, stressing that the beauty of e-government is the ability of integration of all the systems in one single platform.

He indicated that most of the individual projects put in place by private sector operators like e-customs, e-payment, e-immigration, e-kiosks and many more were ready and working fine but indicated that any e-government project that is put in place without integration would be a waste of time. Angaye also attributed the delay in the take-off to the need to also complete work on the identifier system in which he said the President had deep interest. The identifier system would help with the problem of identifying Nigerians easily and reduce crime to the minimum. With the identifier system in place, it would be possible to capture the data about individual Nigerians on a server somewhere so that all agencies can have access to it at the push of a button.

Arinze also reiterated the commitment of the present government to the development of ICT in the country. He said that it was as a mark of the commitment that the federal government allocated a part of the Federal Secretariat in Lagos to operators in the IT sector as an Software Development Park. He also indicated that the government had just completed the complete networking by Radio and LAN of the seat of government, Aso Rock Villa to be fully IT compliant, stressing that officials in Aso Rock now have a network where they can share documents or use the Internet. He said the government's commitment to ICT was borne out of the realization that IT that gives the country an opportunity to catch-up with the developed world. He however said that the government realizes the need that apart from embracing IT, there was a need for us to adopt standards that would make the nation competitive in the international arena.

Angaye also indicated that in line with the government's policy to encourage the development of the software sector that NITDA had set up a software development Fund. Angaye, himself a software developer, said that contributions to the fund would come from private companies who would be encouraged to contribute to specific projects. Such companies would enjoy some incentives as contained in the ICT policy. Already, funds have begun to flow in into the Development Fund, perhaps giving an indication that it would be a huge success.

The Fund according to the DG, would be ploughed into software research and development in areas of critical need in the economy; human and institutional capacity building, especially in preparation for the burgeoning outsourcing business; made in Nigeria software promotions programs; and administering deployment programs such as in train-the-trainer schemes in Microsoft and open source applications.

From AllAfrica.com, Africa, by Godfrey Ikhemuemhe of Vanguard, Lagos - September 14, 2005

State Set to Introduce E-Governance

Government is set to introduce e-government through enhanced information and communication technologies (ICTs) to enable quick and fruitful discussions between Government and its citizens, the Minister of Science and Technology Development Cde Olivia Muchena has said. She was speaking at the launch of the e-period phase, the second part of the national ICTs project carried out to determine the country's e-readiness in Harare last Friday. "The Government is working on an e-government and e-governance strategy to assess its readiness to offer its services electronically and pave way for discussions between government and its citizens," she said. She said Parliament was working on a pilot project to establish Parliamentary Constituency Information Centres (PCICS) in various constituencies throughout the country from which people could access socio-economic data about their constituencies.

However, the minister said for the programme to be successful, citizens had to be made literate in the use of information communication technologies. "For effective implementation of e-government programmes, both Government and citizens must be e-literate and have access to, and confidence in, using ICTs," Muchena said. She said the Government was embarking on several initiatives aimed at increasing access to electronic education, especially in schools. "There is need to train teachers on the use of ICTs as tools for teaching and learning for both students and life-long learners. "We are discussing with the Ministry of Education to ensure that all teachers become computer literate and computer studies are introduced into the curricula from pre-school level to universities," she said.

ICTs, Muchena said, could assist all sectors of society and contribute to the country's economic turnaround programme.
She noted that ICTs had become a powerful tool for economic development and networking through them was a strategic resource that the Government, private sector and civic society could utilise in decision-making, improving service delivery and the quality of service in all sectors of the economy. ICTs refer to technologies that are used in collecting, documenting, storing, editing and passing on information in various mediums from one point to the other. President Mugabe recently initiated a programme to computerise high schools in the country and the initial phase benefited two rural schools in each province with each receiving 10 computers and two printers. - New Ziana

From AllAfrica.com, Africa, by The Herald, Harare - September 26, 2005

E-Government Plans on Track, Says Kibaki

President Kibaki has announced that Kenyans will soon enjoy enhanced service delivery by public servants after the implementation of the e-government plan. The President said his Government has initiated a range of policy measures and so far, the e-government policy is being implemented. "E-government will enhance communication between government and its people who are the consumers of its services," said Kibaki in Isiolo on Tuesday. He said the use of Information Technology will further improve management and manner of operation.

The Head of State also said telephone services will be expanded following the signing of an agreement between Kenya and China. He said the deal, Implementation of Rural Telecommunication Development Programme, was sealed during his recent visit to China. The president said plans to implement the strategy which will see electronic provision of service to the public by government officers are already underway. "The e-government will not only ensure that there is effective and smooth delivery of services but, also that the Government activities are transparent," he said. He said IT was poised to exploit unexplored potential, create more job opportunities for the youth and increase investments.

The President, at the same time, said that the Communications Commission of Kenya (CCK) had established a new, more unified structure in which major internet providers have the mandate to have their own gateways. Under the new system, the President said, Internet providers can now be licensed to have international gateways which improve their effectiveness and competitiveness. Additional mobile phone service providers, he added, will be licensed as there was a very huge potential of residents in rural areas. He promised to support the integration of e-education in schools, saying it will not only bridge the digital gap but also empower learners to acquire skills to make them more competitive in the job market. He said that the Government will also construct boarding schools in arid areas.

From Standard, Kenya, by Amos Kareithi and Ali Abdi - September 28, 2005

 

E-governance Plan to be Implemented in All Municipalities

The Union Ministry of Urban Development is poised to introduce a scheme of e-governance in municipalities all over the country. The scheme is designed to use information technology to deliver public services in a much more convenient, customer-oriented, cost-effective manner. According to the Union Government sources, the plan is being implemented as a "mission mode project" with a view to brining about better interaction between urban local bodies and citizens and other groups, including non-governmental organisations and the private sector.

The Union Ministry of Urban Development with the help of the Union Ministry of Communication and Information Technology has made a lot of headway in standardising the required hardware and software, and the State Governments are being approached for their concurrence in implementing the scheme. While the management of services will remain with the urban local bodies, helped by the State Governments, the Union Ministry of Urban Development wants to take up what is described as "handholding" operations for a period of two to three years till the staff is trained in the operation and maintenance of the hardware. The Lok Sabha Committee on Urban Development paid a visit to Coimbatore and inspected the computerised facilitation centre of the Coimbatore Municipal Corporation. The committee found the computerised property tax collection to be a very efficient method.

The Union Ministry or Urban Development has proposed that the computerisation programme be carried out within a specific timeframe. It has been suggested that the Ministry should persuade the State Governments and Union Territories to set up computerised facilitation centres in all the municipalities to bring in transparency in financial and administration matters and reduce malpractice and delay.

From digital opportunity channel, India - September 8, 2005

Oracle Establishes E-Governance Centre

The centre will help accelerate IT projects among government organisations and government-linked companies in Malaysia. Computerworld Malaysia - Oracle Malaysia has established the Oracle E-Governance Centre of Excellence to accelerate IT projects among government organisations and government-linked companies in the country. The centre will drive successful adoption of IT strategies and projects, share global best practices, as well as build on the existing knowledge base of the Malaysian public sector. Oracle plans to invest RM10 million over a period of three years in the centre, which is located in Century Square, Cyberjaya. Initial investment covers the setting-up of the centre facilities, network infrastructure, software licence fees and human resources deployed at the centre. Further investments will be made in areas such as training and development programmes, partner-led activities and services to enhance e-governance solutions and projects.

The centre demonstrates Oracle's intention to play a pivotal role in Malaysia's e-governance and human capital building initiatives. "Through the Oracle E-Governance Centre of Excellence, our goal is to enable government agencies to benefit from Oracle's extensive global experience in e-governance projects. Public sector organisations can accelerate the roll-out of infocomms and technology projects to benefit businesses and citizens," said VR Srivatsan, managing director, Oracle Malaysia. "The centre will host permanent and programme-based demonstrations of e-governance -solutions and proof-of-concepts. Other key activities include customer visits, hands-on workshops, partner-led events and partner education."

A team of highly skilled public sector IT industry experts will be responsible for managing the centre. They will advise public sector organisations and visitors on best practices and also assist with the development of e-governance strategies and solutions. The facility will also house Oracle sales, marketing and technical staff who are servicing the public sector.

The solutions showcase includes technology and applications for key areas of e-governance, such as Citizen Services Delivery, Funds Management and Control, Law Enforcement and the development of the rural community. Some of Oracle's industry-leading technology solutions for government include grid computing, citizen data hub, healthcare, bioinformatics and disaster recovery management. Visitors will gain first-hand experience on how to implement, use and manage an integrated stack of Oracle solutions. These solutions will be built on the Open Source Software (OSS) platform, in line with the government's push for the adoption of OSS in the country. Operational immediately, the initial focus of the centre is on the development of solutions and proof-of-concepts for its public sector customers. The centre will play a role as an incubator for state government IT projects.

From Computerworld Malaysia, Malaysia - September 9, 2005

President Announces New E-governance Initiative

New Delhi - In another major initiative on electronic governance, the various wings of the government can now communicate with the president's office electronically instead of the age-old practice of cumbersome files and memos. India's technocrat-president A.P.J. Abdul Kalam himself announced this new plan to government auditors at a conference here Tuesday and said a new software was being tried for this purpose, along with an e-governance grid. "We have involved our integrated finance and audit professionals to work out the system," Kalam told the conference, adding the new initiative can help projects like the ambitious rural employment guarantee scheme become a success. "I visualise that interactions and communications between the various organs of the government with President's Office will take place through this e-governance grid."

Kalam said his office had taken up the exercise to automate the transactions of Rashtrapati Bhavan, the presidential palace, and introduce a e-governance some two years ago. "We have a fully functional and automated system for information and workflow of varying levels of secrecy," he said. "For example secret communication from any department to the president's office to very simple day to day letters and messages from the citizens and financial transactions."

Citing the example of his own office, the president exhorted the auditors to evolve similar e-governance solutions to simplify their work, and make it more transparent and efficient. Kalam advised audit teams to work with those dealing with specific programmes or projects in the country and take suitable proactive corrective action while implementing the Rural Employment Guarantee Scheme 2005. "This will ensure that a minimum of 90 percent of the funds reach the intended beneficiary," he said, while calling for an online audit system for the scheme and others like it of national importance. The president also asked the Comptroller and Auditor General (CAG) to consider the creation and maintenance of a centralised national asset register for public awareness.

From NewKerala.com, India - september 20, 2005

Forging E-Government Documents Proves Child's Play

E-government documents and private-sector certificates available online are child's play to fake, the Chosun Ilbo confirmed Tuesday. The Chosun witnessed an Internet security firm forge documents of the National Tax Service and the Human Resources Development Service, a university graduation certificate and a TOEIC score report within minutes. Following the lead of the Ministry of Government Administration and Home Affairs, the Supreme Court has now also stopped issuing official documents via the Internet. Almost all documents issued online from government and civil institutions can be manipulated or forged, security experts say.

Until last week at least 78 major documents were issued online by district and municipal governments, the Supreme Court, the Ministry of Government Administration, and the National Tax Service. A comprehensive effort will be needed to make all of them forgery-proof. The security firm used a program easily obtained on the Internet to alter the name, social security number and the amount of tax imposed before printing out a National Tax Service document. It took less than half an hour to erase the first "2" from the income of W2.316 million (US$23,160) entered on the online document, and print it out as W3.16 million. The TOEIC score transcript issued online by the International Communication Foundation was manipulated with equal ease. The program used was not designed for the purpose of falsifying documents, but it is so easy to master that anyone can apply it for illegal purposes.

Government agencies may have been aware of the threat when they started setting up e-government in 2003. An official who took part in building the system for the Ministry of Government Administration said the possibility of forgery was detected during the process, and tight checks were devised to counter it. But Internet security experts say there is a big flaw in the system, and a full-scale overhaul is urgently needed.

From Chosun Ilbo, South Korea - September 27, 2005

American E-Gov Stalls

Countries in Asia have climbed the ranks to dominate the global top five e-government initiatives, while the U.S. is not really progressing beyond where it's already been. While progress in e-government remains steady in the United States, countries in Asia have climbed the ranks to dominate the global top five.

For the fifth year in a row, researchers at Brown University evaluated 198 nations around the world to assess progress in digital-government initiatives. While the top three countries are the same as last year--Taiwan, Singapore and the United States, in that order - the ones on their tail changed a bit. Hong Kong climbed to fourth place from eleventh last year, and China overtook Canada to finish in the top five. The study also showed that 19 percent of government agencies around the world are offering online services, compared to 21 percent in 2004. "Several Asian countries have made e-government a top priority and are investing significant financial resources in that area," says Darrell West, director of the Taubman Center for Public Policy at Brown University and research lead for the study. "They are producing results and, in some cases, starting to surpass the United States."

The report offers kudos to the United States' FirstGov portal, which provides citizens with a collection of information and services and to user-friendly, highly accessible agency Web sites. But despite that, the United States seems to be losing momentum, the report maintains. "The United States is slipping on electronic government because important budget resources are being diverted to homeland security," West says. "This is leaving less money for investment in other areas, including digital government."

From InformationWeek, NY, by Jill R. Aitoro of VARBusiness - September 26, 2005

Sweden to Assist India with E-governance Project

Chennai - Sweden will provide expertise to India for e-governance projects in 100,000 villages. An eight-member Swedish delegation held detailed talks with Union Minister for IT and Communications Dayanidhi Maran here. A memorandum of understanding (MoU) is likely to be signed between the two countries in a day or two, the minister told reports here Tuesday. The Swedish team was led by Ulrica Messing, visiting minister for communication and regional policy. Sweden will provide technological assistance for e-governance and telemedicine projects in India. The projects will also cover small and medium businesses that need technological assistance, he said. India has sought its e-governance model from Sweden, the minister disclosed.

"Sweden has a head-start in e-governance and can provide India useful tips on running such systems," Maran said. India is planning to set up over 100,000 knowledge resource centres or village IT hubs where villagers can access birth and death certificates, land records and other government documents/records in minutes. The minister also said that the IT department was keen on moving out the sector from the major hubs like in Pune, Hyderabad and Bangalore to other cities. "I am showcasing Chennai as one of the favoured destinations for the IT and ITES (IT enabled services) sectors," Maran added. The Swedish minister, said India had great talent in the industrial and IT sectors and "Sweden will definitely try to increase trade and commerce with India over the coming years".

From NewKerala.com, India - 27 September 2005

E-document Forgery Raises Concern

Supreme Court closes down online registry service - The Supreme Court, which handles citizens' property registration documents, has temporarily closed down its online registry services from yesterday morning in response to indications that government transcripts can be easily altered and forged online. The transcripts susceptible to hacking are 21 civil registration documents that can be applied for and issued online from the government internet registry offices. Such documents include resident, census, land, property and military registrations.

Recent findings have established that it has been possible to alter the ownership title, registration date, and size of a property on real estate registration documents through a simple procedure. Creating a counterfeit document online required only the ability to use a word processing program and download the proper hacking program. Anyone can download a registration document from the internet server, save the file to the PC as a word file using a hacking program easily downloadable from the Internet, and edit it freely before printing it out. The final product would show no difference from the original document except for its forged content.

The suspension of online registration services not only causes inconvenience to all citizens who must now visit each government or municipal office for the registrations, but also raises serious concerns about the reliability of government administration occurring over the Internet and the authenticity of 2.57 million personal identification and property records that have been issued online over the past two years. "The registration transcripts [vulnerable to hacking] are closely related to citizens' property rights, so we are temporarily suspending the internet services in order to search for loopholes and reinforce the security," said a Supreme Court official.

The Ministry of Government Administration and Home Affairs has commenced an overall inspection on the e-government (G4C) project in order to thoroughly examine all security-related issues that may occur in executing an e-government. "We will prepare prevention and countermeasures for the counterfeit and forgery of civilian documents online, and if someone is found responsible for the loophole in the system, he or she will be severely rebuked," said an official of the Home Affairs ministry. In a parliamentary inspection session last week, Kwon Oh-eul, a representative of the Grand National Party demonstrated that there were loopholes in the government's internet registry system by showing that his secretary was able to change his social security number in a registration document and print it out, within minutes. Following the parliamentary inspection, the Home Affairs Ministry closed down its internet services last Friday, followed by the Supreme Court action suspending its internet issuing services yesterday.

All financial agencies are advised to check the authenticity of civilian registration documents by comparing the submitted documents to the online version available on the Internet database of the registry. The loopholes in the online registry system have prompted severe concerns over how the government intends to successfully implement its E-government project, which proposes to carry out all of its administration and civil application procedures through an integrated online system by 2007 at an estimated cost of 80 billion won. The vulnerabilities of the system also has people questioning whether the e-government project started two years ago in November has been a failure. This is a big blow to the Korean government which was ranked fifth in the world for its 'e-readiness index' by the United Nations last year.

From Korea Herald (subscription), South Korea, by Kwon Ji-young - September 27, 2005

 

European Union Commissioner Outlines E-inclusion Plans

The European Information Society Commissioner has outlined plans for three new major initiatives to accelerate a Europe-wide e-inclusion drive. Addressing the i2010 conference in London,Viviane Reding said the "flagship" projects would give "critical mass to our work in three and important and visible areas where ICT has a positive impact on citizens". Reding was setting out to government and business leaders the central pillars of the Commission's new i2010 strategy, its ambitious five-year information society programme for growth and employment.

The first flagship, she said, aimed to enable Europe's aging population to grow older with independence and dignity. It will build upon research initiatives on e-health, e-accessibility and assistive living, as well as inform future work priorities. The second will look at using technologies to develop safer, smarter and cleaner cars. 'Digital libraries' will be the third flagship, drawing together work to bring European culture online. "My hope", said Reding, "is to make Europe's rich literary and audiovisual heritage available to all and to give a spur to enterprises that can create value by reusing these vast resources." Her immediate priority for the i2010 programme is to create the regulatory framework for a common 'European information space' which will stimulate the availability of online content. In her keynote address, the commissioner sa

DTI minister Alun Michael warned delegates that Europe could not afford to be complacent about its future in the global knowledge economy. "The i2010 Strategy is our blueprint to make Europe the most competitive and knowledge-based economy in the world by 2010", he said. "We need to ensure that the i2010 Strategy truly delivers the economic and social benefits of the digital revolution for the citizens of Europe in the 21st Century. "Achieving this is not just for the Commission or for governments. It is up to all of us in Europe to take the i2010 Strategy forward." The UK Government hosted the conference as one of the official events of its current EU Presidency. Another event will be held in London next month focusing on e-accessibility issues, followed by a Ministerial e-Government conference in November.

From Register, UK - September 8, 2005

E-government and Its Limits

The third and final debate of Parliament's series on the digital society, on Tuesday afternoon, took a closer look at the possibilities and limits of e-government and the various approaches used by different governments to making on-line services available to their citizens. Ivor Tallo of the e-Governance Academy Foundation in Estonia explained how the Estonian government had made an all-out effort to create a paperless administration and to make life as easy as possible for its citizens. Ministerial cabinet decisions appear on the Internet minutes after they have been taken, while citizens can deal directly with the administration's "back office" without having to go through an intermediate civil servant. Estonians also have the possibility of paying for public transport and parking with their mobile phones, receiving their exam results by text message and registering a company on-line. "We were a young nation and didn't know this wasn't possible to do; so we just did it", Mr Tallo smiled.

The Irish administration took a different approach and decided to put in place the infrastructure rather than to try and offer applications itself. Oliver Ryan of the Irish government agency Reach explained that offering public services on-line is more difficult to do than offering commercial services, as the government is unwilling to close down other channels of communication which may be the only ones available to some people, such as a local office. He pointed out that commercial enterprises can afford to lose some of their customers on the way, but that government has an obligation to offer its services to all customers.

William Davies, a Senior Research Fellow at the Institute for Public Policy Research, added that he was not convinced that everyone needed the Internet, as other communication means such as mobile phones and digital television can fulfill many requirements as well. He pointed out that the Internet is a highly textual tool and therefore not convenient for everyone; some people would still have to rely on oral communication. Moreover, Davies said, face-to-face contacts are valuable in their own right and government should retain a human face.

Alejo Vidal-Quadras, vice-president of the European Parliament responsible for communication, agreed in the sense that the Internet appeared to be used as a means to participate in political life mostly by those who already take part in that. In that respect, he referred to a British study which showed that only a minority of people were in favour of electronic voting in elections. However, he pointed out, on-line public services are becoming more and more popular and the EU institutions are striving to improve public accessibility and accountability through the Internet while guaranteeing its safety.

Olivier Da Lage of Radio France International, who led the debate, summarised by saying that e-business quite clearly cannot be compared to e-government, as the latter has a responsibility to all its citizens and needs to keep open old channels of communication. This also meant, he said, that e-government is not a cost-saving operation. This opinion was shared by Mr Davies, who pointed out that the UK government is spending billions of pounds to put all its services on-line, while the take-up is disappointing. He therefore recommended that governments take customer satisfaction as their starting point instead of dumping all their information and services on the Internet.

From noticias.info, Spain - September 14, 2005

Mainstreaming E-government: Mainstreaming Efficiency

The IDeA e-champions network annual conference and exhibition 2005 - "mainstreaming e-government: mainstreaming efficiency" - took place on 20 September 2005, attended by more than 300 e-champions representing local authorities from England and Wales. With both Government funding drawing to a close and all local services expected to be available online by December 2005, the event provided an opportunity for reflection, critical debate and celebration of the "journey of continuous improvement' that is the e-government agenda.

Chairman David Walker, Editor of Guardian Public Magazine, opened the event with an introduction of David Myers, Director of the Shared Services Transformation Team at the Cabinet Office. Myers spoke of his role as 'runner' to encourage an increase in dialogue and sharing e-government solutions across government, emphasising the importance of the three 'e's for success - efficiency, effectiveness and empowerment. A common theme at the conference, he stressed the need for government to be "fit for purpose" and demonstrate maturity in "shaping the market early, so the public sector gets what it wants out of it".

Lucy de Groot, Executive Director of the IDeA, took up this mantle calling on local authorities to "sieze, lead and steer" the agenda, driving change much deeper into the back office and much deeper into councils - achieving a "local government better regulated, and itself to deliver better regulation". Charting both the milestones of the e-government programme and the positive impact of the IDeA in aiding the development process, De Groot spoke of the success of the 1,500 strong membership of the e-champions programme. This had provided the opportunity to widen the impact of e-government, now centred on a zero-based approach to spending. With councils already achieving £1.9 billion in gains from the efficiency agenda, "the substantial investment in e-government has resulted in real service improvements in efficiency, an accelerator on the whole process".

Another common theme of the conference included the importance of take-up to the success of e-government. Professor Helen Margetts, from the University of Oxford's Internet Institute highlighted both the cultural barriers of a lack of incentivisation and digital divides that prohibit much-needed take-up of e-services. "e-Government not used is expensive government". The report "e-Government: Reaching socially excluded groups?" by IECR (Internet and Electronic Commerce Research Ltd) and Citizens Online, sponsored by the IDeA, was launched at the event and gives an overview of current local authorities' digital inclusion initiatives.

Concluding the conference, Julian Bowrey, Divisional Manager, Local e-Government Division at the ODPM (Office of the Deputy Prime Minister) also stressed the importance of take-up. Echoing sentiments earlier in the conference, he stressed take-up was dependent upon e-enabled services being "fit for purpose" and creating products worth marketing. In an upbeat conclusion to the conference, Bowrey called for a celebration to mark the expected target of achieving 100 per cent of government services online. The responsibility for the continued improvement and success of e-government now rests, ultimately, with local authorities - "over to you".

Notes: Keynote speakers included: David Myers, Director of the Shared Services Transformation Team at the Cabinet Office, Julian Bowrey, Divisional Manager, Local e-Government Division at the ODPM, Lucy de Groot, Executive Director of the IDeA, Councillor Paul Bettison LGA e-champion and Leader of Bracknell Forest Council and Professor Helen Margetts, Professor of Society and the Internet at the Oxford Internet Institute, University of Oxford. With e-government experts Diether Schonfelder, Head of e-Government from the City of Hamburg and Johan Van Der Waal Adviser to the board of VIAG (the Dutch Association of ICT Managers in Local Government).

From eGov monitor, UK - September 26, 2005

E-government is Making Progress in Germany

Yesterday, the German finance ministry launched an Internet portal that allows the electronic filing of income tax declarations. The project, named "Elster" (an acronym for electronic tax return), will initially be available in five states, but is planned to be available in the whole country by 1 January 2006. This service is aimed at citizens as well as companies, which now can submit tax returns and annual VAT returns electronically. Comment: Only a couple of weeks ago (see EuroView Daily, September 16), we pointed out that Germany was only 18th in Capgemini's 2005 ranking of how well 28 European States delivered on basic e-government services. In contrast to the fiscus project, which aimed at creating a common application suite for all tax offices, the Elster project has been running successfully for six years, although the official launch was much later. The difference here is that Elster is developing something new from scratch, whereas fiscus failed to overcome IT structures that have been implemented in each individual state for decades.

A total of over 29m tax returns have been transmitted to date with Elster; for 2003 alone, there were more than 10m. Topping the list were wages tax returns. With further developments planned - Elster will incorporate further tax-relevant data, such as capital yields taxes, capital-formation benefits, and the necessary annexes to the tax declaration (balance sheets, profit and loss statements) - we see this as a good step towards snatching a better position in next year's e-government ranking.

From Ovum, UK, by Cornelia Wels-Maug - September 29, 2005

 

U.S. Tells Nations Hands Off Internet

Geneva - The United States said at the outset of global talks on information technology yesterday that it will fight attempts to put the United Nations or any international group in charge of the Internet. "We want to make sure the private sector leads and the Internet continues to be a reservoir of great innovation, and that governments continue to focus on enabling the growth of the Internet, and not of controlling its use," Ambassador David A. Gross told The Washington Times in an interview.

Major developing nations spearheaded by China, Brazil, South Africa, Iran, Saudi Arabia, and a number of industrialized countries including Norway, Switzerland and Russia would like to see the United States relinquish its historic control of the Internet. "This situation is very undemocratic, unfair and unreasonable," said Sha Zukang, the ambassador from China, which this week imposed new rules that allow only "healthy and civilized" news to be read by the mainland's 100 million Web users. China's government will determine which news is healthy and which news is not. The question of Internet governance is the most politically charged issue in preparatory talks here for the second World Information Society Summit to be held in Tunis, Tunisia, in November. Mr. Gross, U.S. coordinator for international communications and information policy, said the role of the U.S. government is "to ensure stability and reliability of the Internet. "We will take no action that would undermine that stability," he said.

The U.S.-based ICANN - or Internet Corp. for Assigned Names and Numbers - is a nonprofit corporation that administers the Internet's domain name system. Massod Khan, Pakistan's ambassador and chairman of the Internet governance segment of the talks, said the issues are difficult and added "there is a will to engage, but we have to wait for the outcome." Paul Twomey, president of ICANN, said his organization does not want to see "the Internet's technological future politicized." Britain, which speaks at the talks on behalf of the European Union, also said that governments "should not seek involvement in day-to-day operational issues, nor should they interfere in technical decision making processes."

From Washington Times, DC, by John Zarocostas - September 27, 2005

Government Web Sites Continue Trend of Gradual Improvement in E-Government American Customer Satisfaction Index (ACSI)

Social Security Administration Enters the Top Ten With Three New Sites, According to ACSI Partner ForeSee Results - The federal government continues to show a gradual upward trend in online citizen satisfaction, as the aggregate satisfaction score improved quarter over quarter and year over year for the third year in a row. According to the latest findings of the ACSI special report on federal government's online performance, the e-government sector is gaining on several fronts but still faces considerable challenges

The Index aggregate satisfaction score increased 1.2% for the quarter to 73.5 - which represents a 3.2% improvement from September 2004 and shows that online government maintains an upward trend even as citizens' standards continue to rise. This increase parallels the year-over-year increase of 4.7% in the ACSI's annual e-business measure released last month. The ACSI e-business index measures portals, search engines and news and information sites, categories that are comparable to most government sites in the Index. A total of 13 federal websites achieved satisfaction scores of 80 or above this quarter - a superior score for either private or public sector - while four sites were rated below a 60.

"It's encouraging to see these high-scoring government websites taking the lead in sectors that are still relatively immature from an Internet development perspective," said Dr. Claes Fornell, Director of the National Quality Research Center at the University of Michigan and founder of the ACSI. "Health care and benefits administration are two key sectors where delivering higher levels of customer satisfaction online can help temper upward pressure on costs by attracting consumers to the cost-effective web channel for information and customer support." ACSI satisfaction 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.

"E-Government has been making incremental improvements on a consistent basis, and over time these incremental improvements continue to add up," said Larry Freed, president and CEO of ForeSee Results and author of the report. "Online government is nearly keeping pace with the private sector, but government is doing it with much more limited resources. Measuring customer satisfaction is the first step in identifying where improvements are needed, but some government sites may not have sufficient budget to make changes that will result in customer satisfaction increases."

The Social Security Administration (SSA) broke into the e-Government top ten with the addition of three new sites to the Index. The sites - SSA's Help With Medicare Prescription Drug Costs, Internet Social Security Benefits Application, and Social Security Business Services Online- each do a good job of meeting the specific needs of its user base. This is very good news for the senior population, who are an important audience for the SSA. According to The Media Audit, seniors make up the fastest growing demographic on the Internet. The SSA's overall strategy of measuring specific sites targeted at distinct audience groups has proven successful. The agency runs multiple ACSI surveys, both at the high level portal site and on targeted sub-sites and on-line applications including the sites that have scored so highly in the latest Index.

Also this quarter, the ACSI E-Government Index introduced a new metric, likelihood to use the website as a primary resource. This metric of future behavior shows how likely users are to consider the e-government site as their primary resource for information compared to other ways they would obtain the information. Depending on the type of site, the competition could be another channel offered by the same agency (e.g. contacting the IRS via telephone) or an alternate resource (e.g. receiving medical information from your doctor or WebMD, even though the same information may be available on MedlinePlus).

The Primary Resource metric offers government agencies another measure to gauge success of their web sites in terms that impact the agencies' bottom line. As citizens turn to government web sites as their first choice to find what they need, it decreases the demand for call center and in-person interaction with the agencies. Participation in the ACSI E-Government Index grew 16 percent this quarter for a total of 81 sites. "Participation in the ACSI e-Government Index keeps growing, and that's good news for citizens and for government," said Anne Kelly, CEO of the Federal Consulting Group. "Citizens benefit from improved service reflected in rising satisfaction scores, and federal agencies offer citizens a convenient and cost-effective channel to provide feedback to agencies, which can improve efficiency and their cost structure."

From CRM Today - September 21, 2005

 

World Information Technology Forum Declaration to Be Presented to Unesco

At the World Information Technology Forum (WITFOR) conference in Gaborone,capital city of Botswana, the "Gaborone Declaration" proposal was adopted, which will be presented to the UNESCO general assembly. The proposal focuses on how technology can be used to enhance development and eradicate poverty in developing countries.Presenting the project proposal, chairperson of the Programme Committee, Professor Dewald Roode told participants from more than 80 countries that it discusses critical issues of development such as the application of information communication and technology (ICT) in fighting poverty, the prevalence of HIV/AIDS, access to education, the environment, as well as social, ethical and legal consequences of Information Technology (IT).

The conference under the theme: "ICT for accelerated development" addressed ways of utilising ITC for accelerated development in line with the UN Millennium Development Goals (MDGs). On the role of ICT towards enhancing education, Roode underscored the importance of teachers in the dissemination of ICT knowledge.He noted that, if adequately utilised, ICTs would enhance the competence of teachers in the developing world through establishing innovative learning and knowledge communities.

Roode explained that if ICT is used to extend health care to remote and underdeveloped areas, it would strengthen health information systems within the developing world by building research networks to share best practice between developing and developed countries. Roode also underscored the importance of ICT as an instrument for environmental protection and the sustainable use of natural resources.In terms of governance, ICT can also be used to encourage e-governance and e-democracy initiatives, Roode said. WITFOR participants represented NGOs, governments, business communities, IGOs and academia.

From digital opportunity channel, India - September 6, 2005

Singapore, Kuwait Sign Second MoU on E-Government

Singapore - Singapore and Kuwait signed on Tuesday the second Memorandum of Understanding for further collaboration on E-Government. The MoU was signed by the Singaporean Minister of Information, Communications and the Arts Dr. Lee Boon Yang and Kuwait's Minister of Communications and Minister of Health Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah. Sheikh Ahmad said in a speech during the signing ceremony that the aim of his visit and the delegation was not only to participate in the ceremony but also to extend and expand this collaboration by signing a second MoU. He added that the delegation also aims at exploring ways and means of collaboration in other fields such as healthcare which Kuwait is very keen in.

He pointed out that the first MoU between Kuwait and Singapore regarding E-Government was signed on September 15 of last year and was the first translation of the agreement establishing economic and technical collaboration between the two countries in different fields of development. He said the first MoU, which concluded on time, was a result of a visit to Singapore by His Highness The Prime Minister of Kuwait Sheikh Sabah Al-Ahmed Al-Sabah's. Sheikh Ahmad said that teams of experts from both countries had exchanged visits to conduct data collection and information gathering needed to draft report on the blueprint for e-government implementation in Kuwait as well as recommendations for Kuwait Information Development Authority (KIDA) to be established in Kuwait to manage all e-government affairs and IT projects.

"Yesterday, we received the reports which translate a real evidence of a collaboration that only became successful as a result of combined efforts undertaken by our respective countries. "Today, one year later, we are here signing the second MoU to continue and expand this collaboration to implement the blueprint and establishment of KIDA to drive Kuwait e-gov initiative", Sheikh Ahmad added. He said that he was honored to meet during this visit with the Health Minister as well as Minister of Information, Communications and the Arts as well visiting a number of reputed hospitals where the delegation was informed of the various services offered to citizens. (end) tg.

From Kuwait News Agency, Kuwait - September 13, 2005

 
 

World Bank Aid Terms Criticized

Four members of Britain's Parliament yesterday accused donors of contributing to poor delivery of services to the public.
The International Monetary Fund (IMF) and the World Bank's insistence that aid should be tied to the trimming of the civil service was killing Kenya's economy and leading to low quality service, said the MPs. "We are concerned that the IMF and the World Bank's conditions for a small civil service is unrealistic, going by the number of citizens who seek Government services on daily and hourly basis," said MP Andrew George. Mr George, who is UK's shadow secretary of state for international development, singled out medical staff as the most affected.

Third world countries should be let free to run their governments according to the needs of their people, he said. Mr George and colleagues John Barret (Liberal Democratic Party) and MPs Julie Morgan (Labour Party) and Nick Herbert (Conservative Party), are in the country to inspect projects funded by their government. The team was speaking at the Kisii district hospital, where they learnt that a nurse attends to 50 patients in a day. The MPs were shocked by the long queues of people who waited for several hours to see a doctor. "The situation is more or less the same at all public health centres in the province due to an acute shortage of medical staff," said the Nyanza provincial medical officer of health, Dr James Gesami. The Government intends to reduce its workers by about 21,000. The trimming was necessary to meet the numbers set by donors, said Public Service minister William ole Ntimama.

The four MPs are in the country to assess how money from the global fund was being used to fight TB, malaria and HIV/Aids.
The rate of HIV infection in the region was on the decline, said Dr Gesami, attributing it to sustained campaigns by NGOs, among them Marlin International. The MPs who toured several projects run by Marlin said they were satisfied with the expenditure and promised to root for more funds for Kenya. "We are absolutely satisfied that the little that was allocated to the Kenyan Government and more so this region, has had positive results," said Ms Morgan. The MPs called for closer supervision of TB patients for faster assistance.

From AllAfrica.com, Africa, by Beauttah Omanga of The Nation, Nairobi - September 7, 2005

MEJN Intensifies Public Finance Monitoring

Officials from an economic think-tank, Malawi Economic Justice Network (MEJN) said that they have intensified the use of two important guiding tools to monitor public resources and how they are being spent by government. The Acting Executive Director of MEJN, Mavuto Bamusi told The Chronicle on Friday that they are using the Public Expenditure Tracking Survey (PETS) and the Service Delivery Satisfaction Survey (SDSS) as their guiding tools. He said that PETS is more to do with monitoring the actual usage of the public funds and see if they are really reaching the intended beneficiaries. On the other hand, SDSS looks at the qualitative monitoring of the budget and also checking people's perception on the government's delivery of its services.

Bamusi, who has just taken over the leadership of MEJN from Collins Magalasi, who is expected to take up a new job with Actionaid, said the two guiding tools are being used full throttle. He added that the impact is very significant because government is obliged to operate in line with the Pro-Poor Expenditures (PPE). The acting director said that with the two guiding tools, they are in a position to follow up with relevant ministries on how they are using public finances.

In a related development, MEJN last week organized an international Youth Budget Workshop, which drew participants from Zambia, Zimbabwe and South Africa. Bamusi said that it is important for the youth to be conversant with budget process and implementation. "The youth should not be surprised by the budget," he said, adding that the workshop looked at four areas in the budget process. These, he said are budget formulation, enactment, execution and monitoring. He also said that the aim of the workshop, specifically intended for the youth was to "demystify the budget" so that the youth should also take part. "The workshop will raise a level of awareness on the youth to begin to have a greater sense of understanding on the budget," he said. Most of the youths who participated in the workshop told The Chronicle, that it was an eye opener, in that they learnt some of the things they did not understand in the first place.

From AllAfrica.com, Africa, by Chikondi Chiyembekeza of The Chronicle Newspaper,Lilongwe - September 7, 2005

Group to Accelerate Management Reform

The United States Government through its Agency for International Development (USAID), Development Cooperation Ireland (DCI), and the Netherlands Minister for Development Cooperation have joined hands with the Government of Ethiopia (GFDRE) to support fiscal decentralization in Ethiopia. The donors and the GFDRE have collectively pledged 13.6 million dollars to support roll-out of the highly successful Decentralization Support Activity (DSA), implemented by Harvard University, to all regions of Ethiopia, as well as the administrative zones of Addis Ababa and Dire Dawa.

Harvard University's technical assistance has been instrumental in helping to enhance governmental transparency and accountability in Ethiopia. DSA supports the GFDRE's Expenditure Management and Control (EMC) sub-program of the Civil Service Reform program, which is managed by the Ministry of Finance and Economic Development (MOFED). The Budget Information System (BIS) and the Budget Disbursement and Accounts (BDA) System, implemented with Harvard/DSA's assistance, have also helped the Ministry of Finance and Economic Development (MOFED) produce the national budget in a timely manner. This year, the budget was ready six weeks ahead of deadline. When implemented nationally, the BIS/BDA system will enable speedy consolidation of the national budget and accounts, efficient tracking of sector expenditures, and improve fiscal transparency nation-wide.

Since 1997, the United States Government through USAID has been supporting public financial reform and fiscal decentralization in Ethiopia through Harvard University's DSA. Support for regional public finance management reform was piloted beginning in 2000 in the Southern Nations, Nationalities, and Peoples Region (SNNPR), which at the time was the most up-to-date in its accounts. In December 2002, Development Cooperation Ireland (DCI) joined USAID in supporting the DSA, enabling rollout of the budget reform to Tigray and Amhara regions and deepening the reform in SNNPR. The Netherlands Minister for Cooperation is also now joining in supporting DSA, enabling national rollout of the budget, accounts, and budget planning reforms.

From Addis Tribune, Ethiopia - September 13, 2005

Government Snubs Teachers

Cabinet has "disowned" what it has termed an "erroneous" and "illegal" move to re-grade the job categories of teachers.
Shortly after a nationwide protest of teachers for better salaries, Minister of Information and Broadcasting Netumbo Nandi-Ndaitwah made a press announcement in Windhoek, saying Cabinet would not even contemplate implementing the new grading system according to which 191 new teachers have been paid since last year, because it represented a major policy shift from the current pay policy of the Public Service of Namibia. On the other hand, Namibia National Teachers' Union (Nantu) Secretary General Miriam Hamutenya brushed off the Minister's remarks, saying negotiations on implementing the disputed structure "are progressing very well". "We don't take it seriously [the Minister's announcement].

Teachers won't be silenced by that," said Hamutenya when approached by The Namibian. Hamutenya maintained that Nandi-Ndaitwah was merely repeating what Education Minister Nangolo Mbumba said a month ago, on instruction from Cabinet. Nandi-Ndaitwah said officials within the Office of the Prime Minister and the Ministry of Education had exceeded their authority by authorising the implementation of the re-grading measures. Steps were being taken to identify those involved and they would face disciplinary action, Nandi-Ndaitwah warned. "Since neither Cabinet endorsement nor Treasury approval was sought and obtained before the implementation of the policy proposal on the revised appointment requirements, it is therefore obvious that action taken so far was illegal," the Information and Broadcasting Minister said. Nandi-Ndaitwah made the announcement in the presence of Education Permanent Secretary Vitalis Ankama and Deputy Secretary to Cabinet Steve Katjiuanjo, through whose offices documentation approving the implementation of the structure had passed.

Documents in The Namibian's possession indicate that the much-talked-about new pay structure also passed through the Office of the President and even that of National Intelligence. On December 18 2003, the Office of the Prime Minister, on recommendation of the Public Service Commission, wrote to the Ministry of Education, informing it that it had approved the revised appointment of teachers and that it would be implemented from January 1 2004. When Government failed to implement the decision, Nantu went back to them and in February this year a joint statement was issued by the teachers' union and the Ministry of Education, in which Government blamed a heavy administrative workload for the delay and called for patience from teachers. The Ministry promised to implement the measure once the funds were made available in the budget. Last month it backtracked on the promise and cancelled this agreement with Nantu.

Hamutenya said the union would not accept Government's claim that the implementation of the revised structure was illegal, claiming that more than 40 other job categories in other sectors of the Public Service had already been adjusted under the same decision. "That's not our business. We are just demanding our rights," Hamutenya told The Namibian. Government said yesterday that it could not condone the violation of the Public Service and the State Finance Acts, as it would create a precedent for future violations. Civil servants, Nandi-Ndaitwah said, would further be encouraged to continue breaching legal frameworks.

The Minister could not say how many people had been involved in the bungled implementation plan but said that Government viewed the situation as a "serious matter" and it could not be left unaddressed. Implementing the disputed structure, Nandi-Ndaitwah said, would exacerbate tension among various categories of teachers because only 6 000 of the country's more than 18 500 teachers would receive a salary hike. Government further feared an "exodus of teachers" from primary to secondary levels in search of higher salaries because the revised structure discriminates on this basis.

"Such a re-grading system will create serious imbalances within the whole civil service in terms of salary levels with negative consequences," said Nandi-Ndaitwah. Although accusing Nantu of negotiating in bad faith for going "to the public to canvass support on the issue", Government said it did not dispute the rights of teachers and their union to claim benefits, but that this had to be done through agreed channels. "It is regrettable that Nantu has resorted to public demonstrations and seeking public support, while at the same time Nantu and the GRN have been involved in discussions to try and find an amicable solution to the dispute," said Nandi-Ndaitwah.

Hamutenya said the teachers' protest action was merely to demand their rights and express their anger at Government's reluctance to increase their salaries. Nandi-Ndaitwah said Nantu's protest action was ill-timed, given that President Hifikepunye Pohamba was currently in New York at the UN summit "representing the interest of Namibia." In response, Hamutenya said Government was "politicising" the issue and that the march was planned on August 23, when the President was still in the country. She said Government was concerned about Nantu's threat to strike if they did not get their way and terming the move "blackmail". Government and the recognised trade unions are set to start negotiating soon for improved service conditions for their members. Over the last three years, teachers have received an 18 per cent salary increase, as have all public servants.

From Namibian, Namibia , by Lindsay Dentlinger and Christof Maletsky - September 14, 2005

 

Turkish Finance Minister Pledges More Privatization Efforts

Istanbul - Turkish Minister of Finance Kemal Unakitan has indicated today that Turkey has been talking about privatization for the past 20 years. "The privatization Turkey did in the past 20 years is worth 8bn dollars. In 2005, the total value of privatization will exceed 20bn dollars," said Unakitan. Unakitan was the main speaker in a panel organized at the second day of the International Islamic Finance Forum in Istanbul. "Our government will continue privatization efforts. We still have a lot to privatize - seaports and airports, Erdemir Iron facility, Tekel cigarettes, Turkish Airlines, Petkim, National Lottery, energy distribution companies and energy producing facilities. We will continue privatization until the economic burden of certain facilities on the Turkish government is relieved," told Unakitan. Unakitan stressed that his government waits more foreign investment in the upcoming weeks and months. "Foreigners can start their own companies in two days in Turkey. We are providing many incentives to foreign investors," affirmed Unakitan. Minister Unakitan noted that the Turkish government makes no discrimination among local or foreign businesses. "Foreign entrepreneurs can bring their own employees. They can buy property anywhere in Turkey. All legal matters could be resolved in international courts," mentioned Unakitan. Unakitan added that several Turkish banks will also be privatized soon.

From Black Enterprise, NY - September 27, 2004

 

Government Seeks to Bring Inflation Below 11% - Finance Minister

Moscow - Bringing inflation below 11% has been a major objective for the government this year, the finance minister told the parliamentary hearing on the draft 2006 federal budget Wednesday. "Even 11% is a high figure," Alexei Kudrin said. "Such a high inflation is a sign we have managed the financial system poorly." "Reducing inflation would be a structural measure and a landmark event for our economy. This is the task set by the president and supported by parliament," Kudrin said. He said "monetary factors account for 80%-90% of overall inflation." Kudrin said the growing natural monopoly and public utility tariffs would decline in 2006. "Natural gas prices are expected to rise by 23% in 2005, whereas in 2006, they will grow 11%," he said. In 2006, inflation will be at 7%-7.8% and in 2007 it is expected to drop to 6%-7.5%. In 2008, the figure will be 4%-5.5%, according to the government forecast.

From RIA Novosti, Russia - September 14, 2005

CIS Member-countries' Finance Control Heads Meet in Kishinyov

Astana - The 6th session of the Council of Supreme Finance Control Bodies (SFCB) heads of CIS member-countries will start today in Kishinev. According to Moldavia Audit Chamber data, the delegations from Russia, Ukraine, Azerbaijan, Armenia, Byelorussia, Georgia, Kazakhstan, Kyrgyzstan and Tajikistan will take part in the work of the session. The representatives of the Supreme Finance Control Bodies of Bulgaria, Hungary, Latvia, Lithuania, Poland and Estonia were also invited to the forum. The realization of resolution, adopted at the last session of the Council in Astana, and questions, connected with Supreme Finance Control Bodies' role in provision of preservation of state finance will be considered at the meeting.

The resolutions on SFCB of CIS member-countries role in provision of receipt of the funds to national budgets and realization of the developed suggestions and recommendations on enhancement of efficiency of budget funds usage and state property are to be signed at the meeting. The Council of Supreme Finance Control Bodies heads of CIS member-countries was founded in 2000 to strengthen the collaboration and activity coordination in the sphere of public finance control and exchange of working experience. The Provision on Interstate Council of SFCB of CIS member-countries was passed at the CIS member-countries heads session, taken place in Kazan on August 26. The Council was officially acknowledged the interstate body of CIS cooperation.

From Kazinform, Kazakhstan - September 12, 2005

Budget Deficit: Eurostat Adjusts Figures, EU Angry, Finance Ministry Accepts

The statistical arm of the European Union, Eurostat, has revised its forecast for Hungary's budget deficit and predicted it to balloon to 7.2% of gross domestic product (GDP) for 2005, compared with the target of 4.7%. Eurostat reported on Monday (September 26) that Hungary's public sector deficit was 5.4% of GDP in 2004, the second-largest in the European Union after Greece's 6.6%. "The increase of government deficit in 2004 is mainly due to the recording of the 13th month salary of government employees in 2004," said Eurostat.

According to Reuters, senior financial officials have said the EU is to call for "new measures by Hungary" to reduce its budget deficit. The Economic and Finance Committee (EFC), the body which makes preparations for meetings of EU finance ministers (ECOFIN), is expected to discuss on Friday (September 30) the latest developments in Hungary's deficit, officials, who declined to be identified, told Reuters. The Eurostat report added that the predicted deficit increase is due to Ft547bn ($2.66bn) in additional shortfall. According to economic Website Portfolio, it should also have included the Ft180bn ($8.77m) motorway property transfer, making the picture even worse, but did not. The government has always insisted that it would achieve the target, with the caveat "3.6% plus motorways." Originally, the government's plan had been to put motorway spending off-budget, accounting for the costs as a public-private partnership. "If 2006 budget deficit targets were threatened, the government would take appropriate steps," said Economy Minister Janos Koka, adding that motorway construction will continue.

According to the International Monetary Fund (IMF), the budget and current deficit are key factors for the country's economy and, therefore, Hungary will fail to introduce the Euro by the target date of 2010. The report recommended Hungary free-float its currency and abandon its current practice of setting a +/- 15% intervention band on the Forint, which would help curb the foreign exchange lending boom of recent years. Government spokesperson Andras Batiz told Portfolio, that the 2005 budget deficit would indeed need to be revised upward and that the government would put measures in place to deal with any potential effects on the fiscal gap for 2006.

On Monday afternoon, Hungary's Finance Ministry issued a statement saying it accepted Eurostat's modification of Hungary's 2004 public finance deficit to 5.4% of GDP. "Eurostat voiced reservations over the data provided by some member states, but Hungary did not feature among them. It follows that the statistical office of the European Union considers the Hungarian data reliable," said the ministry's statement. The ministry confirmed that the report did not specifically mention Eurostat's position in the ongoing debate of whether Hungary would be asked to account for the costs of motorway building within its budget this year, a decision which would raise the 2005 public finance deficit considerably. Amelia Torres, a specialist, "We will be reassessing Hungary's efforts to lower the budget deficit," she told a news briefing in Brussels.

The EU is expected to call for new measures by Hungary to curb its budget deficit as EU data shows a substantial overshoot. "The issue goes through the normal decision-making procedure of the European Commission and some time at the end of October the Economic and Finance Committee and the EU finance ministers... will make new recommendations (for cutting the deficit)," one official told Reuters. It is believed the EU bodies are unlikely to propose fines against Hungary. "They will not fall on Hungary in the first step, but they will become increasingly angry," said the official.

From Budapest Sun, Hungary - September 28, 2005

State and Entity Finance Ministers, Central Bank and World Bank Agree on Need to Accelerate Economic Reforms


Sarajevo - State and entity Finance Ministers, Ljerka Maric, Svetlana Cenic and Dragan Vrankic, Central Bank governor Kemal Kozaric and the World Bank Country Manager in BiH Dirk Reinermann, agreed on Thursday about the need to accelerate key economic reforms in the country, WB said. During the meeting held in the World Bank office in Sarajevo, World Bank Country Manager Dirk Reinermann congratulated BH officials on strong economic growth performance of 6.2% real growth in 2004. While unemployment remains high, this is a very welcome development. However, Reinermann also expressed the World Bank Management concern that, while progress has been made in some areas, structural economic reforms across the board have slowed down in both Entities and at the State level. "These structural reforms remain essential for sustained economic development of BH in the coming years and the slow progress is putting the available World Bank financial package of USD 120 million at risk," Reinermann said.

The World Bank in Bosnia and Herzegovina currently has three major adjustment projects under implementation – Business Adjustment Project (BAC); Economic Management Structural Adjustment Credit (EMSAC) and the Second Social Sector Structural Adjustment Credit (SOSAC II) – as well as one new adjustment project – Programmatic Development Policy Credit (PDPC) – in preparation. Total volume of this assistance package is USD 120 million. In addition the World Bank has 13 investment projects under implementation worth additional USD 250 million. These projects were not discussed at Thursday's meeting.

The four structural reform projects provide assistance for several key areas, including: reform of governance and public finance, higher education, improvements in the investment climate, privatization and strengthening of the social safety net. Because of that, at the conclusion of the meeting, the three Finance Ministers, Governor Kozaric and Dirk Reinermann agreed that the outstanding reforms now need to be accelerated. In addition, in line with agreements reached during the Annual Meetings in Washington DC last weekend between BH Premier Adnan Terzic and World Bank Senior Management, it was also agreed that a joint meeting between BH leadership and senior World Bank management will be held in mid October. That meeting would be an opportunity to discuss the plans of the authorities in the area of economic structural reforms and how the World Bank can best support these reforms.

This is a more detailed status of these key projects and reforms: Business Enabling Environment Structural Adjustment Credit (BAC) – The BAC has already been extended four times. The second tranche of about USD 25 million, remains undibursed: Progress has been made lately under BAC by passing business inspections and registration laws. These laws however are still awaiting the signature of both Entity Presidents so that they can be gazetted and implemented. These are two critical reforms for the business sector, for job creation and for the fight against corruption in BH.

Economic Management Structural Adjustment Credit (EMSAC) – The second tranche in the amount of USD 24 million remains undisbursed. Under EMSAC, all conditions but the one related to budget formulation and execution have been met. Some progress has been made in the area of public procurement and external audit at State and Entity levels. On internal audit however no progress has been made. This is also a critical piece of legislation for EU accession and for the fight against corruption. The draft law on public wages at the State level is not yet in line with international good practice and is currently at odds with EMSAC commitments. The RS has a drafted public wage law, but it must now be reviewed to ensure fiscal sustainability. Lastly under EMSAC, the internal consultations on higher education reform between State and Entities seem to have stalled and the COM has not yet considered how it wants to proceed to meet this EMSAC benchmark, which is also outlined in the BH's Medium-term Development Strategy (PRSP). EMSAC expires at the end of 2005.

Second Social Sector Structural Adjustment Credit (SOSAC II) – This Credit worth USD 51 million is still not effective despite two extensions of the effectiveness deadline. SOSAC II is the single largest project and supports the strengthening of the social safety net in BH. Despite the fact that this project was negotiated with all three governments some 1.5 years ago, it is still not effective and no funds have been disbursed. While the RS is broadly on track, the Federation government has made no progress on the remaining reforms it has committed itself to, and we are concerned that we are starting to witness backsliding in some areas.

In particular, the Federation has increased spending to war veterans and has added a Law on Medal Holders the exact cost of which remains unclear. Additional beneficiaries are being added - 9 years after the end of the war - and no beneficiary has yet been excluded because of faulty disability assessments. This will further expand the share of expenditure going to veterans in a non-transparent and non-targeted fashion beyond the already very high 30% of FBH expenditure. If continued in 2006, this would leave no room for improved assistance to the poor, in particular families with children, and other deserving beneficiaries such as civil victims of war. Little progress has been made towards introducing a system to support these groups. Also, despite a commitment under SOSAC II not to do so, the Federation Employment Institute continues to give credits to enterprises through the Federation Investment Bank rather than to utilize these funds in support of effective active labor market policies to fight unemployment. Lastly under SOSAC II, the dialogue on pension reform, including the settlement of inter-entity pensions, seems to have stalled altogether.

Programmatic Adjustment Operation (PDPC) - Under PDPC - a new USD 21 million project currently under preparation - both Entities have made some progress with regard to the number of completed privatizations, tenders for privatizations and bankruptcies in the past months. This is a highly welcome development which will boost growth and job creation. However, the preparations for the required amendments to the draft FBH Law on Management Companies and Investment Funds, the FBH Privatization Agency Law and the RS Law on Privatization need to be accelerated. In sum, very much remains to be done to ensure this credit, WB said.

From FENA, Bosnia and Herzegovina - September 29, 2005

 

Finance Minister Insists Lebanon Firm on Reform

In an attempt to keep international confidence in the Lebanese economy untarnished despite the political instability that is shaking the country, Finance Minister Jihad Azour performed a tour de force to show Lebanon is still on the right track of economic orthodoxy before the IMF and the World Bank's annual meetings. Azour said during his meetings with representatives of international organizations and financial institutions that the Lebanese government is determined to push forward the reform process. Azour highlighted the importance of political, security and economic stability in Lebanon and urged the international community to help establish such stability. He also said investment was still attractive despite the circumstances the country has been recently witnessing, adding that the Lebanese government was in the process of developing legislations that would encourage privatization. Azour said the government would play a strategic role in implementing economic and administrative reforms understanding that privatization does not mean transferring monopoly from the public sector to the private sector. He explained that such reform process required local and international support. Azour said the countries that participated in the New York conference did not link any assistance to Lebanon to specific conditions.

Last week, Hizbullah charged the United States was demanding the full implementation of Resolution 1559, which calls for Hizbullah's disarmament, as a precondition for global financial assistance and Speaker Nabih Berri vetoed reforms based on privatizing major public sector ventures. Azour said privatization efforts aim at improving the productivity of several sectors in favor of the people and their government, not at their expense. He said Lebanon has a real opportunity to assert its role in the region due to its human resources and the respect it enjoys in international financial and economic circles. Azour started attending the annual meetings of the IMF and WB and is expected to hold talks with his Arab and foreign counterparts and top officials in international banks and organizations to brief them about the New York meeting in preparation for the donors' conference that will be held in Beirut before the end of the year.

From International Herald Tribune, France, by Rita Boustani of The Daily Star Middle East - September 26, 2005

 

Tax Bases Shattered, Gulf Region Faces Debt Crisis

By destroying houses, businesses and peoples' lives, Hurricane Katrina also destroyed the tax base of the gulf region. Without homes, New Orleans cannot collect property taxes. Without tourists, it cannot collect hotel taxes. And without restaurants and stores, it cannot collect sales taxes. And with so much in the gulf region shattered, the taxes and other revenue streams that once stood behind its municipal bonds are no longer there. As a result, state treasurers and local financial officials from Louisiana, Mississippi and Alabama have concluded that they will need federal aid to help pay billions of dollars in debt as well as finance the area's reconstruction.

So far, they have no formal plan, said John Kennedy, Louisiana's treasurer, but they are considering proposals for the federal government to make payments on existing bonds and cover short-term municipal operating costs. In addition, they are talking about issuing recovery bonds, similar to the $8 billion tax-exempt Liberty Bond program enacted by Congress after 9/11 - only on a far larger scale. "We are expecting, hoping and will be asking for federal assistance," Mr. Kennedy said. "We are trying to determine what kind of federal relief we can expect. The municipalities that cannot make their bond payments are going to need help. We are hoping for substantial federal aid."

Last week, the National Association of Bond Lawyers wrote to the White House to propose a Hurricane Katrina Indebtedness Guarantee and Financing Act. That measure would provide cash advances to municipalities unable to pay bondholders and would offer federal guarantees on future debt. These advances would have to be paid back in 10 years. The group also called for creation of a Liberty Bond-type program. "When a city such as New Orleans may be shut down for nine months," said Monty G. Humble, chairman of the association, "you know that access to capital may be an issue. These areas are so devastated." State economic development officials from the region are heading to Washington today with a $52 billion plan involving tax credits and other development incentives to keep businesses from leaving. They are hoping that $30 billion will be directed to Louisiana, $15 billion to Mississippi and $7 billion to Alabama.

In the annals of municipal finance - with its share of bankruptcies, defaults and financially distressed cities - nothing comes close. Previous hurricanes, floods and earthquakes have had a more limited impact, affecting mainly residential areas and not damaging the business underpinnings of a city the size of New Orleans and the coastal areas around Biloxi and Gulfport, Miss. "We have nothing to compare this to," said Dwight Denison, associate professor of public finance at the University of Kentucky. "You've never wiped out an entire tax base. And when you wipe out a tax base, you have nothing to tax."

Municipal bond insurers say their exposure in the region is $14 billion. Standard & Poor's, one of the main bond rating agencies, has put $8 billion in municipal debt from the area on its Creditwatch list, signaling possible trouble ahead, while Moody's Investor Service put $9.4 billion in debt on its Watchlist. Already, late last week, a $36.3 million bond deal for the Orleans Levee District was canceled because the bond insurer, MBIA Inc., backed out. "In the past you got a shock, like 9/11 or a natural disaster, and it can impair an issuer for a while, but they recover relatively quickly," said Donald Lipkin, a managing director in the municipal finance department at Bear Stearns, a New York brokerage firm. "Here, because of the level of impairment, there is a good chance some credits may not pay on a timely basis." Municipal issuers in the affected areas say bondholders have nothing to worry about - for the moment. Enough money has been set aside, in nearly all cases, to cover debt service payments at least through the end of the year. The looming question is what happens when the money runs out.

New Orleans has over $2 billion in municipal bonds outstanding, from $650 million in general obligation bonds backed by property taxes to bonds used to pay for work on schools, levees, sewers, and transportation. There are more bonds for hospitals, schools and other public but nongovernmental entities no longer functioning. Even in the best of times, New Orleans had it tough. Its bonds are rated just above junk and some entities have borrowed just to keep going. The Orleans Parish School Board, for instance, recently sold $50 million in revenue anticipation notes as it ran short of cash. The school district already had $600 million in bonds outstanding. The city also has $500 million in debt for the New Orleans Ernest N. Morial Convention Center, where many sought refuge after the hurricane. That debt is backed by a share of hotel, food and sightseeing tour taxes. "For the city, all the long-term debt is fine for a year," said Peter Kessenich, managing director at Public Financial Management in Atlanta, the city's bond adviser. "Beyond that, you will be sending tax bills to people who don't live there or to houses that are not worth much."

After 9/11, the city of New York issued $1 billion in one-year notes to cover immediate financial needs. But these were backed by personal income and sales taxes from a New York City still standing and an economy still functioning. Investors gobbled up those bonds, in part as a show of support. Liberty Bonds, issued a year later, allowed businesses in lower Manhattan to borrow in the municipal market, where interest rates are lower than for corporate debt. Mr. Kennedy, the Louisiana treasurer, insisted that his state had sufficient reserves and taxing power to meet all current and future state-level debt obligations and that bankruptcy was not an option. "It's not even in the realm of possibility," he said. Even so, Mr. Kennedy acknowledged that many local municipalities might not make their debt payments once their reserves run out. As soon as he was able to return to his office after the hurricane, Mr. Kennedy started weekly meetings of local officials, bond underwriters, lawyers and trustees from the affected areas to discuss the many issues. More than 25 percent of the personal income taxes in the state come from the New Orleans area, and much of that income will no longer exist. As a result, the state government could be hard pressed to help cash-strapped municipalities. Mr. Kennedy is also holding weekly conference calls with bond rating agencies and institutional investors to keep them abreast of the situation.

In Mississippi, where Gulfport and Biloxi have been hit hard, the state treasurer, Tate Reeves, has been holding similar meetings and is sending out a positive message. "We don't anticipate any interruption in debt-service payments," Mr. Reeves said. "For some local issuers, making debt-service payments will be a challenge, no question. But I anticipate no defaults from public issuers in Mississippi." Both Standard and Poor's and Moody's have put $3 billion of Mississippi debt on watch lists. Mr. Reeves said he thought his state would bounce back faster than many might expect, pointing out that power was already being restored in the coastal areas. Defaults in the municipal finance market are rare and bankruptcies even rarer. Even during the Depression, 4,770 issues defaulted on $2.85 billion in debt, but most eventually paid it back. In 1994, Orange County in California went into bankruptcy (and paid back all the debt after a two-year delay) and in the late 1970's, Cleveland filed for bankruptcy. Bond insurers have never had to make debt-service payments because of a natural disaster, but that may change. Drawing on insurance is a last step, and municipalities must pay insurers back for any money used.

Bond insurers will definitely have to step up to the table," said Bart Hildreth, a public finance professor at Wichita State University. It is also almost unheard of for the federal government to be asked to pick up debt-service costs for local municipalities. In the 1975 fiscal crisis in New York City, Washington guaranteed bonds issued by the city, but never had to pay anything and actually made money on the deal. At the moment, most attention is on the immediate crisis. But the White House is aware of the coming financial challenge. "As we move forward, we will be taking a closer look at the broader needs," said Scott Milburn, a spokesman for the Office of Management and Budget. "Municipal bonds falls into that category."

From New York Times, United States, by Leslie Wayne - September 12, 2005

Nevis Island Administration Praised for Debt Management Initiative

Charlestown - A finance management advisor of the Barbados based Caribbean Regional Technical Assistance Centre (CARTAC) has praised the Nevis Island Administration (NIA) for an initiative to reform its capital expenditure. He said once the reforms were fully implemented Nevis would be among the leaders in the region with debt management and that the taxpayers would receive better value for their money. Mr. Graeme Hansen, Public Finance Management Advisor of CARTAC made the comment on Friday, during a one-day retreat for the Public Sector Investment Programme Committee at the Four Seasons Resort on Friday.

The retreat was held to familiarise committee members with the importance of the Public Sector Investment Programme (PSIP and how the system works. "The reforms are about getting things right in the first place, they are about doing the planning and the analysis before you press the button to go with a project. "I am not saying this has not already happened in Nevis but this is a way of pulling it within a framework, the public investment programme framework, which will increase the chances of project success, it will increase the chance that the public gets best value for its tax payers' dollar. It will also increase transparency. "What it means is government when it makes its decision will have the advice of the Public Sector Investment Development Committee and the consideration of all aspects of the proposals. I congratulate the NIA on their initiative in pursuing this reform and I am sure it is going to work out in a very good way for the NIA and the Nevis island community," Hansen said.

The retreat hosted by the Ministry of Finance through the Department of Statistics and Economic Planning, was attended by top managers and stakeholders in the Nevis Island Administration (NIA) who form the PSIP executive steering committee. During a brief opening ceremony, Ms. Berneece Herbert, Director of Statistics and Economic Planning, in an overview of the investment programme noting that PSIP comprises of investment projects undertaken by government and public sector organisations in areas including education, health, tourism, agriculture and infrastructure for transportation, water supply and power. According to Ms Herbert, traditionally PSIP systems are used by governments within the region as a macro-economic tool to promote and manage growth and development, adding that it is often used as a benchmark to access the economic development and performance of the respective country. It is also used as a tool for aid coordination and is also used to assist governments to secure external funding.

The PSIP consists of details of expenditure and commitment of all investment projects undertaken by a government Ms Herbert said and that the significance of the programme is its importance as an instrument of economic management, ensuring that macro-economic and sector strategies are translated into tangible projects and programmes and also to define clearly the priority in which those resources should be used. Ms Herbert said the PSIP is also a way of managing the use of a country's resources and in that regard the system has achieved some measure of success within the Organisation of East Caribbean States (OECS). However, there was a view in the region that the existing PSIP systems are not sufficiently operated and managed and as such has implications for the effective use of a country's limited financial resources. She explained that recommendations were made to the NIA to take decisive steps towards the management of its public sector investment programme. As a result the last six months has seen CARTEC assisting the NIA through her department in using best management practices to design a system for the management of the PSIPC in Nevis. "Nevis' PSIPC, once properly designed, organised and implemented can make a meaningful contribution to the development of Nevis' economy," Ms Herbert said.

During brief remarks, Ms. Hazel Brandy Budget Director explained that by end of the day's proceedings participants would be more aware of the importance of PSIP in an effort to prioritise projects in such a way that it reduces the strain on government's limited resources. According to Ms. Brandy, debt management continues to be a major issue for most governments in the region and it was for that reason that the NIA procured the services of the Caribbean Regional Technical Assistance Centre (CARTAC) to assist with the development of a proper management programme. She said there has been a marked increase in the amount of money being spent on capital projects which mandated a major management shift. "We are also aware that capital projects are the major driving force behind debt and that is why it is so important that we monitor and manage such projects as closely as possible in order to curb the rapid increase in debt." Ms. Brandy noted the Ministry of Finance in Nevis views the process as a serious one and encouraged the participants to give the day's events the level of professionalism and seriousness that it required.

From Caribbean Net News, Cayman Islands - September 14, 2005

 

Global Fund Probe to be Public

The commission of inquiry into the mismanagement of the Global Fund on AIDS, tuberculosis and malaria (GFATM) will be conducted through public hearings, the chairman of the probe, Justice James Ogoola, said yesterday. Ogoola said witnesses would have a right to legal representation. "All hearings of the commission will be public. We shall minimise camera hearings. There is nothing to hide," Ogoola said. He said the two-month probe would be conducted in three phases: collection of information, which is in progress, the public hearings and writing the report. Ogoola urged those with relevant information to take it to the commission office on the 13th floor, Crested Towers in Kampala, where the probe will sit. "The commission has started receiving information from individuals, which will be analysed before public hearings start," Ogoola said. "This is your commission. This is our problem. Let us all work together and think together through this problem. Together we will know the truth; and the truth shall set us all free," said Ogoola, while introducing the members of the commission to the press at the Ministry of Finance boardroom.

The Global Fund based in Geneva, Switzerland, last month suspended disbursements to Uganda following a PriceWaterHouseCoopers audit report that cited "serious mismanagement" of funds by the health ministry's Project Management Unit (PMU). President Yoweri Museveni appointed the commission to probe and make recommendations for the criminal prosecution of those found guilty. It will also recommend the recovery of GFATM money from those found to have misappropriated it. Commission members present yesterday were Lydia Obonyo-Jabwor, Gerald Mbalire Kasanya, Dr. Margaret Mungerera and Angela Kiryabwire Kanyima. Those absent were Bank of Uganda Governor Emmanuel Tumusiime Mutebile, the commission secretary, Andrew Kasirye and lead counsel Phillip Karugaba.

Ogoola said the commission would read all reports on the allegations including those from over 300 NGOs who benefited from the funds before determining who to testify. He said his team would climb every mountain in hot pursuit of the truth. He described as "mind-boggling," the amount involved. He said stealing AIDS funds was like stealing from a dead man's coffin. "To steal money intended for the medication, food and welfare of these patients, is to steal from them their last glimmer of hope; to pull the only rag from under their feeble feet; and to snuff out their only remaining physical and psychological support system," said Ogoola.

Asked if his commission was not another whitewash by the Government and if its report may never be made public like his 2001 judicial probe into bank closures, Ogoola said, "We are concerned that the public should see the fruits of commissions. "In this one I insisted that there be an upfront undertaking that the report will be published. The appointing authority graciously assured me (that the report will be published)," Ogoola said. He also cited Clause 8 of the commission's terms of reference, which says the report shall be published after it has been submitted to the President. Ogoola's commission will also investigate the basis for recruitment of PMU officials and their competence. It will also find out whether Stanbic and dfcu banks applied exchange rates that were below market rates in conversion of Global Fund foreign exchange transfers.

From New Vision, Uganda, by Jude Etyang - September 14, 2005

Nigeria, Switzerland Hail Return Of Stolen Funds, Say Safe Havens No Longer Exist

Nigeria, Switzerland and the World Bank on Tuesday hailed the return of millions of dollars stolen by a late military dictator and said the move signaled there is no safe haven for looted funds, reports The Associated Press. Nigeria and Switzerland have agreed on a process to return to Nigeria $458 million stolen by the Gen. Sani Abacha who looted oil-rich Nigeria of more than $2.2 billion from when he seized power in 1993 until his death in 1998. The hunt for the money began in earnest after a restored democracy elected Olusegun Obasanjo president in 1999. The Swiss government already has transferred $290 million of this amount and the balance will come when Abacha possessions are transferred into liquid assets. "We appreciate the willingness of the Swiss government to act on this issue," said Nigerian Finance Minister Ngozi Okonjo-Iweala. "It is just a first step. We are committed to ensuring that all the funds stolen from Nigeria are returned."

Okonjo-Iweala said Nigeria was searching for funds Abacha may have sent to other countries but did not name them. She said Obasanjo was determined to fight corruption and he will pursue this effort wherever it goes. Swiss Secretary of State for Economic Affairs Jean-Daniel Gerber said his country was "the first and so far the only country where a court of law ordered the transfer of Abacha funds back to Nigeria." He said repatriating illegally acquired funds is an important tool in the fight against corruption because it closes safe havens for such finds and fosters greater accountability.

Reuters further writes that at a news conference to announce the return of the remaining money to Nigeria, World Bank President Wolfowitz said "Corruption is not just the problem of developing countries. Developed countries have a responsibility too and part of that responsibility is to make it as hard as possible for corrupt generals to hide the money that they steal." The news agency further writes that Wolfowitz, since visiting Nigeria in July, intervened personally to press the Swiss to release Abacha's loot, saying he was encouraged by Obasanjo's steps to root out corruption, improve transparency and implement economic reforms. "This landmark agreement sends a signal around the world that there is no safe harbor for stolen funds," Wolfowitz said.

Nigeria's finance minister, flanking Wolfowitz, said it should be made easier for African governments to get back stolen funds, because many countries holding the loot hid behind legal systems that slowed the process. "This sets a very good example of what should be done," Okonjo-Iweala told the news conference. "It has taken some time for us to get at these funds and finally we did. It sends a strong message to those who will take out corrupt money that there is nowhere for this money to hide," said Okonjo-Iweala.

Aargauer Zeitung (Switzerland) further writes Wolfowitz said the return of the funds was an "important precedent." This was a "pioneering agreement," and he hoped the Swiss example would teach a lesson. The fight against corruption had to take a high priority in development politics, he said. Gerber added that Switzerland was determined to deny money with criminal background a safe haven. The country had taken legislative measures to protect the Swiss banking place from misuse, he said. According to special legislation, the Swiss Federal Council can cease foreign deposits, if they stem from "an evident criminal source."

Agence France Presse further notes that Nigeria insisted that the $458 million being recovered will not disappear into corruption. Campaigners in both Switzerland and Nigeria, however, have raised doubts about where the money will end up. They have highlighted corruption fears raised by the recent arrest by British anti-fraud police of Diepreye Alamieyeseigha, governor of Nigeria's Bayelsa State. "Experience from Nigeria and elsewhere shows that in the absence of thorough analysis of public expenditure management, cynicism will remain," Paul King of the Nigerian Stolen Wealth Campaign told the news agency. Sketchy documents provided by Okonjo-Iweala to the campaign detailing her budget plans "certainly do not instill confidence in the public statements the minister makes that the funds will be used as publicly stated," King said. But Okonjo-Iweala said the government of Obasanjo had proved its anti-corruption credentials beyond doubt, pointing to its agreement to take part in a World Bank-monitored review of oil revenues. "

Xinhua (China) writes Gerber further noted that "The involvement of the World Bank as a third party with excellent technical expertise in public finance management can be very helpful…as it creates confidence among key stakeholders about effective use of the repatriated funds." Nigeria and the World Bank have agreed to work together under a public expenditure management and financial accountability review to ensure the repatriated funds are channeled to support key sectors, such as education, health, HIV/AIDS and basic infrastructure, the statement said. To this end, the Swiss government is providing support for carrying out the review through a grant accorded to the World Bank to help finance the study, it added. This story is also reported by BBC News Online (UK); Le Temps, La Tribune de Geneve, Neue Zurcher Zeitung, Tages Anzeiger (Switzerland);Cameroon Tribune, and All Africa.

From noticias.info, Spain - September 28, 2005

 
 

Firm Gets Presidential Nod on Enterprise e-Governance Solution

Government may finally be moving towards the enthronement of adequate local content delivery through the Public Private Partnership window, by encouraging Indigenous software developers. In a recent presentation of Enterprise e-Governance Operations Solutions, in Abuja, the President was said to be impressed with the performance of the product which was presented to a to a cross section of Presidential Advisers, Ministers, Permanent Secretaries and other top government officials. The event was the last Presidential retreat held at the Banquet Hall of the Villa.

According to Chris Uwaje, the Chief Architect of the EGOS Software Solution and CEO of Connect Technologies, who made the presentation, "EGOS is the core engine for Government to Government (G2G) Application. The Application software is 100 percent indigenous effort, based on 26 months Research, Design and Development Cycle. The solution is an ERP Groupware, fulfilling the major functions of an Enterprise Resource Planning for government entities. As the world transits into the information age, new conditions are being created for future economic (industrial) success. We innovated the Nigerian response - within the context of governance – to sustain 21st century rapid development competitiveness and bridge our 'digital (knowledge) divide'. He said the Enterprise E-Governance Operations Solutions (EGOS) was designed to enhance the capability of government to organise, manage and deliver resource information for executive, legislative, judiciary, task allocation and workflow administration and management, and all levels of governance.

The G2G portfolio's primary goal is to enable federal, state and local governments to more easily work together to better serve citizens within key lines of business. To achieve this goal the Federal government, Uwaje stated, must make it easier for states and localities to meet reporting requirements, while promoting the use of performance measurements. According to him, state and local governments will see significant administrative savings and will be able to improve program delivery because the data necessary to measure performance will be more accurate and timely. Improving the way that information is shared among all levels of government has numerous benefits. He said the solution is a secured IP-based Intranet portal that will improve the disaster management process by simplifying and unifying the interaction between Federal, state, and local government operations. He further stated that now, e-Government operations has taken centre state on the declaration of the Millennium Agenda for Peace by the United Nations.

Uwaje noted that a US survey released in April 2003 by the Council for Excellence in Government observed that 75 percent of e-Government users think e-Government has made it easier to get information, and 67 percent like doing transactions with government online. Nielsen//NetRatings, the global standard for Internet audience measurement and analysis, reports that more than one-third of all Internet users visited a federal government website in February 2003, and about half of all businesses went online in January 2003 to interact with the Federal government. He further stated that the US Congress recognized the importance of e-Government through the passage of the e-Government Act of 2002, signed into law by the President on December 17, 2002. He said the Administration sees this Act as a valuable contribution to drive forward the current work that is improving government through electronic means. It codifies and expands the e-Government leadership role of OMB through the establishment of an Office of e-Government and Information Technology headed by an administrator appointed by the president.

Uwaje said Connect Technologies Limited was fully prepared to start a pilot run of the program for the nation. He also said that the solution has been subjected to a wide range of peer-review – based on global standard and best practice models. The response from IT professionals both at home and abroad acknowledge the effort put into the work and commended Connect Technologies, for engaging and leading the global IT competitiveness on e-Governance for Nigeria.

The overall e-Government strategy will address the following areas: - Driving results and productivity growth: IT and management reform investments that create an order of magnitude improvement in value to the citizen, especially in the areas of information reasoning, security information sharing and knowledge enhancement flow; - Maximizing and Controlling procurement costs: Consolidating redundant and overlapping investments, enterprise licensing, fixing cost overruns, and competing away excess IT and related services charges;
- Implementing the E-Government Laws: Including government-wide architecture governance and web-based strategies for improving access to high quality information and services; - Improving cyber security: Desktop, data, applications, networks, threat and vulnerability-focused, business continuity, and privacy protection; and others.

From This Day (subscription), Nigeria - September 7, 2005

Official Says House to Review Privatization Law

The Privatization Commission has said that the current Privatization Act is to be scrutinized and sent to parliament for review. The commission's information, education and communications officer [Chimwemwe Matonga], in an interview, said the development comes amid calls from different quarters of the society to have the Act reviewed. He said that privatization of companies should be taken as a government programme under economic reform and the commission as just an agency trusted to do the privatization process. He says there are a lot of development projects that the government has implemented using the money gained from privatization of companies. He cited examples such as building of different schools and settling debts. Apart from the projects, he further said that privatized companies are becoming successful because of the employment of new ideas in the running of companies but also new machines that have been invested in these companies.

Chancellor Kaferapanjira, executive director of the Malawi Confederation of Chambers of Commerce and Industry, concurred with Matonga by saying that privatization of companies improves efficiency in the running of companies. But he stressed that people should be given enough money for them to prepare for a new life if they happen to lose their job. Recently, there has been a call from different quarters of the society including the Consumers Association of Malawi [Cama] to have the Privatization Act reviewed. According to the Cama director, John Kapito, privatization of companies should be done after looking at the merits and demerits and the people should be heard. He said the Privatization Act was done in a hurry by our parliament because of the external forces like that of the International Monetary Fund.


From Black Enterprise, NY - September 17, 2005

 

Filipino Water Activists Challenge UN to Denounce Privatization

The Water for the People Network, a broad alliance of non-government organizations (NGOs) and grassroots-based groups in the Philippines campaigning for people's control over water services and resources, challenges the United Nations (UN) to issue a strong statement against the privatization of water services due to its disastrous impact on the human right to access and use water as the multilateral body prepares for a high-level review of the Millennium Development Goals (MDGs) on September 14-16 in New York. Among the specific targets identified in the MDGs is to reduce by half the proportion of people without sustainable access to safe drinking water and basic sanitation. Worldwide, more than 1 billion people are forced to use unsafe sources of drinking water while 2.6 billion people lack basic sanitation, according to a 2004 study released by the World Health Organization (WHO) and the UN Children's Fund (UNICEF).

In the Philippines, the WHO and UNICEF reported that out of a national population of 78.6 million in 2002, 11.8 million people are excluded from drinking water coverage while 21.2 million people are excluded from sanitation coverage. The MDGs suffers from a problem that is much deeper than the apparent lack of commitment of industrialized countries to meet the MDGs and the slow progress that makes the 2015 UN deadline unrealizable. The more fundamental problem of the MDGs and the most serious threat to the UN campaign to alleviate the social and economic condition of the world's poor is the promotion of the MDGs of the same neoliberal policies such as privatization that have, in the first place, aggravated chronic global poverty and severe inequity.

Privatization grossly violates the people's human right to water because it distorts the provision of water supply and sanitation as a basic service and regards water just like any other commodity that corporations can exploit and profit from. This distortion results in prohibitive user fees and other charges that poor households could not afford. In Metro Manila, for example, the average tariff before the Metropolitan Waterworks and Sewerage System (MWSS) was privatized in August 1997 was PhP8.78 per cubic meter. By January 2005, the private concessionaires Manila Water and Maynilad were charging their costumers PhP16.17 and PhP30.19 per cubic meter, respectively. Worse, of the 13 million Metro Manila residents as of 2003, only 9.1 million have water supply and less than 2 million have sewerage connection. But in spite the plethora of empirical evidence showing that water privatization has not only further marginalized the poor in terms of access to water supply and sanitation but also did not improve the quality of water services, the UN has never issued a categorical denunciation of this neoliberal policy being imposed on many countries by international financial institutions (IFIs) led by the World Bank.

From 1990 to 2004, a total of almost US$42 billion has been invested in the water supply and sanitation sector with private sector participation, based on World Bank data. The Philippines ranked second only to Argentina in terms of cumulative investment with US$5.9 billion or around 14% of the total. Recent developments show that the march towards water privatization in the Philippines will not only continue but will even gain pace. The implementation of President Gloria Arroyo's Executive Order (EO) No. 279, issued in February 2004, is reorganizing and reorienting the Local Water Utilities Administration (LWUA) to facilitate the corporatization and privatization of water districts around the country. For the controversial Maynilad, the Arroyo government did not only refuse to kick out the notorious French transnational corporation (TNC) Suez but is even inviting other foreign companies to take the place of the Lopez family in the failed MWSS west zone concession. Unless such policies are reversed, we believe that the campaign to provide water for all, especially for the poor, will never be realized. The UN should renounce water privatization and rethink the MDGs to truly reflect the human rights aspiration of the people to have clean, affordable, and efficient water services.

From Cyber Dyaryo, Philippines - September 14, 2005

Public-private partnerships: US Will Continue Assisting Pakistan

Karachi - Ryan C Crocker, US ambassador to Pakistan, on Friday pledged to continue assisting Pakistan in developing public-private partnerships as an essential component of an overall $1.5 billion assistance package for the country. This amount is to be spent in five years whereas the total assistance for other than gem and jewellery, marble and granite and dairy development industries is double this amount, Crocker said at a press conference with officials from the Small and Medium Enterprise Development Authority (SMEDA) and non-government organisations (NGOs).

Crocker said the assistance was mainly for education, health, economic development and governance including reforms in the national and provincial assemblies. He said that political parties would be trained to organise themselves at the grass-root level. The US envoy said the aim of the project was to identify the needs of the gem and jewellery, dairy development and marble and granite industries and to transform them into more economically viable and competitive businesses at the world level. He said that Pakistani stone was of good quality, but needed improvement in cutting and polishing. The marble and granite strategy working group is in dialogue with the public sector to develop a policy framework to increase investment in technology and infrastructure in ornamental stone quarrying.

Lisa Chiles, United States Agency for International Development (USAID) director, said the agency would help Pakistani industrialists visit the world market and evolve a strategy for their economic development. She said that industrialists must know why Pakistani marble was not getting the price Indian or Italian marble was, in the world market. Lisa said that the working groups would help cut the wastage and improve the quality of products. She said that a support fund had been created with $10 million each from the USAID and the government of Pakistan as the industry couldn't invest in these projects individually.

SMEDA chief Sultan Tiwana said that working groups in their respective industries had identified certain needs and projects that would be funded from the support fund on a long-term basis. Giving details of the assistance package, the US consul general said that $200 million of $1.5 billion assistance package would go to the government of Pakistan for health, education and training etc, while the remaining sum would be spent on other projects to be identified by the government.


From Daily Times, Pakistan - September 17, 2005

Koizumi Plans Far-reaching Privatisation

Emboldened by a huge majority in the Japanese parliament, Junichiro Koizumi yesterday outlined plans for sweeping privatisation and devolution of power as he was formally re-elected prime minister. Riding high in the opinion polls - 62 per cent of voters expressed support for his policies - Mr Koizumi clearly believes he has a mandate to carry out dramatic changes. "I have promised structural reforms and I now want to put those plans solidly into action," he told a press conference after the two houses of the Japanese parliament approved his reappointment in the wake of his landslide election victory earlier this month. "I want to enact the postal privatisation bills in a special session of parliament. Then we will press forward on our principles to privatise that which can be privatised and decentralise tasks that can be carried out by local authorities."

Mr Koizumi has repeatedly stated that he will not seek re-election as party president when his term of office runs out next September, so his final year may see even more activity than the one preceding the historic 11 September vote. As well as confirming Mr Koizumi as prime minister, the parliament reappointed his entire cabinet. Their initial task is to help push the postal privatisation agenda, which could be enacted as early as next month. Once that is completed, Mr Koizumi has indicated that he will shuffle his cabinet to bring in younger faces in preparation for the handover to his successor as leader of both the party and the country in 12 months. Analysts agree that with the opposition in disarray, little stands in his way. "All the new politicians that Mr Koizumi has introduced - the 'assassins' who were given the task of ousting those that rebelled against his plans - will simply work as robots as most of them have very little experience of politics, which will mean that he will have centralised control," said Makoto Watanabe, a lecturer in media and communications at Hokkaido University.

Mr Koizumi's party has 296 seats in the 480-seat House of Representatives, the second-largest majority the party has enjoyed since its foundation 50 years ago. Even before election day, rumours were circulating in Tokyo's political heartland that, not content with forcing through postal service privatisation, Mr Koizumi might be planning a spectacular "sacrifice" on his way out of office. Raising consumption tax - the equivalent of VAT - would inevitably be an unpopular move, but with a huge national debt it is something that the Japanese government has considered. The suggestion is that Mr Koizumi may grasp that particular nettle in order to spare his successor the wrath of the electorate.

From Scotsman, United Kingdom, by Julian Ryall - September 21, 2005

Chinese Chamber Proposes Commission to Oversee Privatisation

The Association of Chinese Chamber of Commerce and Industry Malaysia (ACCCIM) has proposed that an independent commission be set up to oversee the implementation of future privatisation projects in the country. "There should be an independent body to review and monitor the privatisation concept, especially at the stage of awarding the contracts," ACCCIM infrastructure and privatisation committee chairman Goh Bok Yen said. "This independent commission should comprise representatives of the non-governmental organisations, and consumers, especially those with the background on privatisation," Goh said at a press conference to announce ACCCIM's survey on privatisation in Kuala Lumpur yesterday. He said one of the questions in the survey would seek the respondent's stance on the need for an independent commission for privatisation projects.

He said the independent commission will be charged with powers of participating in the awarding process, supervising, reviewing and making regular recommendations to the Government. Treasurer and adviser to the infrastructure and privatisation committee Hong Lee Pee said ACCCIM wants to collect public views and comments on privatisation through this survey. He said the findings would be submitted to the relevant government ministries, agencies, departments and even the Cabinet. He said members of the public can obtain the questionnaires by e-mail at www.acccim.org.my to participate in the survey which will run until November 15.

From Business Times - Malaysia, Malaysia, by Kamarul Yunus - September 28, 2005

 

Privatisation to Be Completed Early 2007

Serbian Minister of Economy Predrag Bubalo said that Serbia's privatisation of socially-owned capital will be completed towards the end of next year and the beginning of 2007. Bubalo pointed out at the Serbian parliament's Privatisation Committee session that a substantial acceleration of the privatisation process is anticipated during September, and in the first half of 2006. He said that the Serbian Privatisation Agency has sold 297 companies in public auctions in seven months, out of the 300 planned for one year, and added that the anticipated number has risen to 360 companies, but that about 400 companies, according to all projections, will be sold by the end of the year.

The Minister said that about 30 companies will be sold in an invitation for bids this year, and assessed that the this year's financial results are much better than those of last year. Speaking about the Serbian Privatisation Agency's work, Bubalo said that its work should be measured by the number of prepared and organised auctions and invitations for bids, considering that 99 percent of the agency's work is done before a company goes through an invitation for bids or an auction, and not by the number of privatised companies, since the sale of companies does not depend on the agency. The Minister also said that both the Ministry of Economy and the Serbian Privatisation Agency are working to halve the number of companies.

From Reporter.gr (subscription), Greece - September 5, 2005

Managed Services in Public and Private Sectors: a TIF Seminar

Ireland's outsourcing market is maturing fast, marked by major new deals like BT Ireland's agreement on voice and data services for Bank of Ireland. Attendees will hear details of this and other real-world implementations at a September TIF seminar. For organisations considering entering or altering a current outsourcing relationship, the "Managed Services in Public and Private Sectors" seminar offers an important opportunity to explore the practical issues involved. The managed services market in Ireland is expected to be worth EUR400 million during 2005, according to research figures from iReach, representing a rise of 9 percent over last year. Hosted by the Telecommunications and Internet Federation's Outsourcing Services Industry Group (TIF) and sponsored by BT Ireland, the breakfast seminar will provide important insights into this growing market.

Key speakers include representatives from Bank of Ireland and Eastern Health Shared Services, two organisations who have agreed significant managed services deals for voice and data services. Introducing the morning event is Maurice Mortell, CEO of Data Electronics Group and chair of the TIF outsourcing group. He explains that, while public and private sector bodies may have different reasons for exploring outsource relationships, both are encouraged by the positive managed services experiences that are now emerging. "Many organisations are coming to realise something that's always been our view, which is that IT should be a service, not an asset," he said. "Why put massive investment into IT capacity that isn't your core business? Strong testimonials are now coming back from customers who are doing managed services and are happy with these relationships. There's also better understanding now about what's the best way to get into a managed services relationship, to make sure it works for both parties."

Partners, not buyers and sellers - Modern managed services relationships are a very different animal from the traditional outsourcing agreements of years ago. Historically, outsource relationships for services like IT infrastructure and support were not flexible arrangements. The focus for both parties was on price, and there was little scope to change the terms of the deal after signing, even if those changes would benefit the client. In later years of the agreement, the relationship could often break down over the issue of cost, leaving both parties dissatisfied.

Today, outsource relationships are more like partnerships than simple buyer-seller arrangements: both parties take the long view, and work together to see how technology can help the organisation deliver on its long-term strategy. "If a client has a 5 year or 7 year plan, they need to share that with their managed services partner," said Gary Cobain, General Manager for BT Solutions at BT Ireland. He explains that the service provider is also encouraged and expected to bring its wider expertise to bear. BT, for example, would have extensive experience in delivering managed services for financial services clients globally, and in relationships like that with the Bank of Ireland, BT Ireland draws on this knowledge. "Companies providing managed services today are looking to go beyond the service level agreement," he explains. "It's a long-term relationship and the values and cultural fit of both organisations need to be considered."

The September forum promises to give attendees the chance to explore these and other key issues that can influence the success or failure of a managed services relationship. Tommy McCabe, Director of TIF, notes that there is marked buoyancy now in Ireland's outsourcing market, and both service providers and customers stand to benefit. "What was very much a fledging market a year or two ago has matured significantly," he notes. "This is evident in the continued increase in outsourcing tenders observed in the public and private sector, as well as a greater understanding in the market of what outsourcing is. As an industry, though, we must continue to work on market education, particularly at a board level, informing the decision makers of the benefits of outsourcing and indeed how to start the outsourcing process." The "Managed Services in Public and Private Sectors" breakfast seminar will be held from 7.30am to 9.45am on 22 September in the Clontarf Castle Hotel in Dublin. For more information ring or e-mail Carolyn Duomeni, tel. 01 605 1528, or book online at the Events section of www.tif.ie.

From ElectricNews.net, Ireland - September 15, 2005

Successes and Headaches Alike for Greece in Privatization Drive

While the Greek government can bask in the warm glow of healthy incoming numbers for the 2005 tourism season, in which an 11.5 percent increase is expected, it also is having to deal with headaches such as a recent EU decision against the "ailing" Olympic Airways, which ruled that the Greek national air carrier "…must repay several hundred million euros in illegal aid - a decision that could cripple the company."

According to Business Day on 14 September, Brussels is claiming the more than €500 million in aid Olympic has received since 2002 constitutes an "unfair advantage" over the competition. Even worse, "...the European Commission recalled Olympic still has to repay some €160m in earlier funds that have been ruled incompatible with fair competition." There are widespread fears that the company could sink under the inability to repay the still unknown aid totals - something which is causing significant unrest amongst the workers and labor unions. Partly because of Olympic's artificially boosted-up position, internal and international ticket prices have remained stubbornly similar. But the prevalence of package tours - which cater to foreign tourists with an all-inclusive package of lodging, meals and transportation via charter flights - also challenge the industry. In fact, it is often possible for tourists to buy simply the flight and not the entire tour, meaning the cost of getting from London or Berlin to Athens is cheaper than a ticket for even some internal Greek flights.

A further issue pointed out in a statistical study which traces a decline in air travel between 199 and 2003 is fear, presumable of terrorism: "...the transportation market saw negative growth both in value and volume terms, mainly due to the fear of travelling by air. Sea transportation gained value share over air transport and accounted for 32% of value sales in 2003, compared with 68% for the air transport." Another problem is that many of Greece's internal air routes are economically unfeasible out of season, when there are no foreign visitors to head to the smaller and more remote islands. Yet according to Business Day, leading competitor Aegean Airlines is set to order "...eight A320 airplanes from Airbus for €338m, with an option for 12 more Airbus passenger jets." Finally, the domestic airlines have also reacted slowly to new competition from budget airlines from EU countries, most notably Britain's EasyJet, founded in 1995 by the Greek shipping mogul, Stelios Haji-Ioannou.

As could be expected, the trade unions representing Olympic's 8,000 employees were displeased. At protests in Athens and Thessaloniki, workers demanded that the embattled airline remain operational and under state control, and representatives warned of the "disruption" that would be caused were it to disappear. According to Christos Polyzogopoulos, chief of umbrella union GSEE, "Greece must have a national carrier ...the government will have a huge responsibility if the airline is forced to closed." However, on September 14 it was also reported that the Karamanlis government will probably shut down the 48 year-old symbol of Greek aviation. A senior government official told Kathimerini that "...the New Democracy government is not prepared to allow further burden on Greek citizens without there being any hope for Olympic." Were the government to announce a closure plan, however, employees vowed to shut down every Greek airport in protest.

In reaction to these protests, the government hastily announced it will press on with privatization - if they can find any interested investor, that is - while meanwhile buying time with the time-honored practice of reverse litigation in Brussels. Yet the news from state-owned tourism sector enterprises is not all bad. On September 2, Kathimerini reported that the government plans to sell off some of its 'decaying' state-owned tourism enterprises. Among the actions the newspaper anticipated were the sale of 77 percent of a casino in Corfu, and the leasing of a golf course in Rhodes, a marina in Faliron (Athens) and several run-down hotels. While many of the last are not operating currently, the casino is a profitable venture that could wind up being a cash windfall for the government.

Aside from the Corfu Casino, the specific properties are Afandou Golf Course on Rhodes and the SEF marina near Athens, as well as the Xenia hotels of Vitina, Skiathos, Thasos and Tsagarada, reports the AP. Finally, though it is not tourism-related, the state plans to sell off a former sea-salt plant near Athens. The effort is primarily due to pressure on the country to reduce its public debt, and continue the privatization trend begun in July, when Greece opened a tender for long-term leases in the case of three unused facilities from the Olympic Games. "...Greece has pledged to reduce its budget deficit to below 3 percent of gross domestic product, as required by EU budget rules, by the end of 2006," says the article. "In 2004, the budget deficit was more than 6 percent of GDP."

And, also according to the AP, "Greece raised euro835 million (US$1.03 billion) through the sale of a 10 percent stake in the country's largest telecoms operator... Around 85 percent of the shares were sold to foreign institutional investors and 15 percent to Greek institutional investors." These successes come as some consolation in light of the precarious future and acrimonious present of the state's national air carrier.

From Balkanalysis.com, AZ - September 16, 2005

Concluding Statement of the IMF Mission

In the following you find the uncut version of the International Monetary Fund's concluding statement, describing the preliminary findings of IMF staff at the conclusion of certain missions (official staff visits, in most cases to member countries).

Though the private sector has demonstrated flexibility and resourcefulness, fiscal policy weaknesses are raising risk levels - procrastination is no longer a policy option. Over the last decade, the economy has dealt successfully with global competition, engineering a commendable shift to a more high-tech production structure. However, Hungary has moved from being a "star" performer to one of the slower growing economies among the new EU member states. Significant policy weaknesses have emerged in recent years - in particular, the lack of predictability of the fiscal budget and the persistence of high fiscal and current account deficits. A benign international financial environment has ensured the financing of these deficits. But Hungary's domestic currency risk premium remains high relative to other countries in the region. With the 2005 fiscal deficit target to be imminently missed and the substantial challenges for 2006, the risks have increased.

Short-run macro developments have been welcome, though vulnerabilities remain. Following weak performance in the previous three quarters, growth finally picked up in the second quarter this year. Export growth remained solid. The composition of growth has become more balanced. Inflation reached historical lows. Downside risks to GDP growth arise from the increase in the price of oil, continued slow growth in the euro area, and the planned increases in the minimum wage. We expect growth to be 3.4 percent in 2005, increasing to 3.6 percent in 2006. The current account deficit, projected at about 8 percent of GDP in 2005, could be larger if accession-related procedural changes led to a underreporting of imports. The financing of this deficit will be helped by the increased availability of EU funds, but remains crucially dependent on continued investor confidence in Hungarian economic prospects. And with almost all new net domestic lending to the private sector occurring in foreign currencies, the macroeconomic risks from an exchange rate correction have increased. The strong financial system, however, can withstand such a correction.

Three factors highlight the continued erosion of fiscal discipline. First, revisions reveal that the fiscal consolidation in 2004 was smaller than originally thought. Second, reflecting the difficult political environment, even the modest momentum for fiscal reform in 2004 was not continued in 2005, and the focus, unfortunately, shifted towards accounting measures to achieve budgetary targets. This shift was reinforced in June to deal with the slippages in the earlier part of the year. Despite that, the government's 2005 fiscal deficit target under the Convergence Program will not be met, especially in light of Eurostat's recent rejection of the underlying accounting approach to reach that goal. Containing the fiscal stimulus, which is not directly influenced by the Eurostat decision, will depend crucially on the realization of the unusually large projected surplus in December. Third, the announced 2006 budget plans, which propose a 1½ percent of GDP expenditure consolidation, do not appear to come to grips with the seriousness of the problem, either in the extent of the consolidation needed or in the quality of the adjustment proposed.

Even if politically difficult, an appropriately ambitious and consciously transparent budget framework must be reestablished. With the fiscal challenge set to increase next year, debt dynamics could turn adverse. To prevent this unfortunate outcome, urgent action is needed, accompanied by the setting of a realistic fiscal deficit trajectory for the Convergence Program and euro adoption. Transparency and candid communication, based on realistic targets, will help avoid destabilizing surprises, while improving budgetary controls.

A new strategy for durable and credible consolidation in 2006 requires sizable expenditure cuts, in part to make room for the planned tax reduction. Bold steps are necessary to limit and rationalize public expenditures, in the areas of public employment, health, education, pensions, the housing subsidy scheme, and subsidies to enterprises. While the proposed tax reduction initiative can be a spur to investment and growth, it could be ill-timed if it is not accompanied by expenditure reduction to achieve revenue neutrality. Further tax reform possibilities should be based on a comprehensive assessment to ensure long-term gains - reforms driven by short-term political competition could prove counterproductive. Broadening the tax base by reducing exemptions should be a priority. In this context, a tax expenditure budget, which assesses revenue losses due to all current tax exemptions, is an important first step.

Greater transparency and accountability are needed to increase fiscal control. We welcome the Eurostat decision uncovering the recourse to accounting measures for reducing the deficit, which was becoming endemic. Greater transparency in fiscal reporting is required in light of the still large divergence between cash and accrual budgets. Also of concern is the limited effectiveness of internal controls to contain the deficit. Independent review of budget projections through, for example, the State Audit Office, can enhance accountability, if the remit of this office were appropriately extended. A full accounting of the various Public Private Partnerships, with a ready basis to determine their operational status and the government's direct and contingent liabilities, has now become essential. A system is urgently needed for predicting and managing expenditures that do not have nominal caps. Similarly, when reserves are set aside to manage budgetary contingencies, they should be freed only in line with clear expenditure priorities.

This is an opportune moment to consider a move to a floating exchange rate regime. The authorities have remained committed to the exchange rate band even in adverse circumstances - and remain so committed. However, a risk management perspective suggests that this is a good time to consider a move towards exchange rate flexibility. First, with favorable market conditions and strong investor confidence in Hungary, the forint has held steady in a narrow range for the past 18 months, with no evident pressure either upwards or downwards. A move towards exchange rate flexibility now, in times of calm global markets, would be desirable. While short-term upward or downward pressures may ensue, exit from the current position of strength is likely to limit prolonged destabilization. Instead, if global imbalances unwind, Hungary could get caught in the tailwinds of that adjustment, as currencies and interest rates are realigned. These external developments would interact with domestic vulnerabilities in important and potentially unpredictable ways. Second, with the decline in inflation, the current exchange rate band is no longer relevant as a monetary policy anchor; if anything, its presence interferes with the operation of the inflation targeting anchor. Moreover, the possibility of euro adoption by 2010 appears remote and, hence, the ERM-II like framework will not be relevant for some years. Finally, the perception of greater exchange rate volatility will help stem unhedged foreign currency borrowing.

Overall, the stance of interest rate policy seems appropriate. Since the VAT-induced decline in the 2006 inflation rate is expected to be temporary, further interest rate reductions should be guided by inflation projections for 2007. The authorities recognize this - as reflected also in their adoption of a medium-term framework that targets inflation 5 to 8 quarters ahead. However, market commentary has been more aggressively projecting interest rate cuts to match the temporary decline in inflation in 2006. While disinflation may continue, this cannot be presumed. Further interest rate reductions should be based on the medium-term evolution of inflation projections and expectations.

***
The Hungarian economy has many real strengths. Consistent and predictable policies will enhance these strengths. Decisions taken now will determine if the full potential is realized. The mission wishes the authorities well in their endeavors and thanks them and many others for their warm hospitality and candid discussions.

From Portfolio.hu, Hungary - September 22, 2005

The Specific Programmes under the Seventh Framework Programme for Research and Technological Development

The Co-operation programme is designed to establish European leadership in key scientific and technological areas by supporting cooperation between universities, industry, research centres and public authorities across the European Union as well as the rest of the world. The Commission is proposing an amount of €44432 million[1], about 60% of total proposed FP7 expenditure. The programme focuses on nine themes, corresponding to the major fields of progress in knowledge and technology where excellent research must be strengthened to address European social, economic, environmental and industrial challenges. These are:

Health, where the objective is to improve the health of European citizens and increase the competitiveness of European health-related industries and businesses, while addressing global health issues including emerging epidemics. Emphasis will be put on "translational research" (turning basic discoveries into clinical applications), the development and validation of new therapies, methods for health promotion and disease prevention, diagnostic tools and technologies and efficient health care systems. The amount proposed in this area is €7350 million.

Food, Agriculture and Biotechnology, where the objective is to build a European knowledge-based bio-economy by bringing together science, industry and other stakeholders. The aim will be to exploit new and emerging research opportunities that address social and economic challenges: the growing demand for safer, healthier and higher quality food, taking into account animal welfare and rural contexts; the sustainable production and use of renewable bio-resources; the increasing risk of epizootic an zoonotic diseases and good-related disorders; threats to the sustainability and security of agricultural and fisheries production resulting in particular from climate change. The amount proposed in this area is €2170 million.

Information and Communication Technologies, where the objective is to improve the competitiveness of European industry and enable Europe to master and shape the future developments of Information and Communication Technologies (ICT) to meet the demands of both society and economy. Activities will strengthen Europe's scientific and technology base and ensure its global leadership in ICT, help drive and stimulate innovation through ICT use and ensure that ICT progress is rapidly transformed into benefits for Europe's citizens, businesses, industry and governments. The amount proposed in this area is €11197 million.

Nanosciences, Nanotechnologies, Materials and new Production Technologies, where the objective is to improve the competitiveness of European industry, ensure its transformation from resource-intensive to knowledge-intensive, by generating breakthrough knowledge for new applications at the crossroads between different technologies and disciplines and concentrate its capabilities on high-added-value products and technologies to meet customer requirements, as well as environmental, health and other societal expectations. The amount proposed in this area is €4270 million.

Energy, where the objective is to transform the current fossil-fuel energy system into a more sustainable one based on a diverse portfolio of energy sources and carriers combined with enhanced energy efficiency, to address the pressing challenges of security of supply and climate change. The amount proposed in this area is €2590 million.

Environment, including Climate Change, where the objective is to promote sustainable management of the natural and human environment and its resources by advancing understanding of the interaction of the bio-sphere, ecosystems and human activities and developing new technologies, tool and services to address global environmental issues in an integrated way. Emphasis will be put on prediction of climate, ecological, earth and ocean systems changes, on tools and technologies for monitoring, prevention and mitigation of environmental pressures and risks, including to health and the sustainability of the natural and man-made environment. The amount proposed in this area is €2240 million.

Transport, including Aeronautics, seeking to develop integrated, "greener", "smarter" and safer pan-European transport systems for the benefit of the citizen and society, respecting the environment and natural resources, and securing and developing the competitiveness and leading role of European industry in the global market. The amount proposed in this area is €5250 million.

Socio-economic sciences and the Humanities, generating in-depth, shared understanding of complex and inter-related socio-economic challenges facing Europe, such as growth, employment and competitiveness, social cohesion, sustainability, quality of life, education, cultural issues and global interdependence, in particular with a view to providing an improved knowledge case for policies in the fields concerned. The amount proposed in this area is €700 million.

Security and space, where the objectives are two-fold. On the one hand to develop the technologies and knowledge to ensure the security of citizens from threats such as terrorism and crime, as well as from the impact and consequences of unintended incidents such as natural disasters or industrial accidents, while on the other to support a European Space Programme, focussing on applications such as Global Monitoring for Environmental Sustainability with benefits for citizens and industry. The amount proposed in this area is €3500 million.

The Co-operation programme will focus on collaborative research, that is, fostering the creation of excellent research projects and networks able to attract researchers and investment from across Europe and the entire world. This collaborative research will primarily take the form of collaborative projects, networks of excellence, coordination and support actions. In addition the Co-operation Programme proposes two new instruments to support research and development in Europe:

Joint Technology Initiatives, which will, in a limited number of cases, support the creation of long-term private/public partnerships. These JTIs will mainly result from the work of European Technology Platforms, to combine private sector, national and European financing. The criteria for selection of JTIs include: demonstrated added value of intervention at European level; a clear objective; financial and other resources committed by industry; clear impact on growth and competitiveness; contribution to broader policy objectives; capacity to attract other funding; inability of other existing instruments to achieve the objective.

Risk Sharing Finance Facility, which will take the form of a grant to the European Investment Bank, which will be use to cover part of the risks associated with loans to research and development actions, which is inherently riskier than some other economic activities.

The Co-operation programme is designed to make it easier than in the past to focus on priority scientific areas which cut across several themes: an example could be marine sciences and technology (food and environment). The programme is also designed with enough flexibility to allow it to meet emerging needs that cannot be foreseen now, for example arising from scientific or technological breakthroughs. It will allow research on topics identified by researchers to develop new scientific and technological opportunities, assess new discoveries or newly-observed phenomena, and focus on specific objectives in emerging fields of science and technology that promise major advances. It will also have the flexibility to respond to new policy needs that arise during the course of the programme, such as new epidemics, emerging concerns in food safety, or responses to natural disasters.

The Ideas Programme - The Ideas programme will establish a European Research Council (ERC), a pan-European mechanism to support the truly creative scientists, engineers and scholars, whose curiosity and thirst for knowledge are most likely to make the unpredictable and spectacular discoveries that can change the course of human understanding and open up new vistas for technological progress and solving enduring social and environmental problems. The key principles for the operation of the ERC will be scientific autonomy and excellence. The ERC, with a proposed budget of €10483 million, will consist of a Scientific Council, composed of 22 eminent scientists from across Europe and from many different disciplines. The Scientific Council will be supported by an implementation structure, responsible for all aspects of administrative implementation and carrying out the work programme. This structure will implement the evaluation procedures, peer review and selection processes according to the principles established by the Scientific Council and will ensure the financial and scientific management of grants.

The People Programme - European science can only be as good as the people carrying it out. It is for this reason that the European Commission proposes allocating a significant amount of the Seventh Framework Programme – €6300 million– to measures that will develop Europe's researchers both qualitatively and quantitatively, which will be known as 'Marie Curie Actions'. It will build on the significant positive experience of previous such programmes. Actions supported by the People programme will include: initial training of researchers, through a networking mechanism focused on the first four years of their careers; life-long training and career development, through individual fellowships, co-funding regional, national or international programmes; creating closer links between industry and academia, through secondments, hosting programmes, workshops and conferences.

There will also be a significant international dimension, with outgoing international fellowships, return and reintegration grants for European researchers, incoming international fellowships and international partnerships. The People programme will be supported by actions that seek to remove obstacles to moving within the EU and enhance the career perspectives of researchers.

The Capacities Programme - The Capacities Programme aims to develop the resources available to Europe's research community, so that it can operate in the best possible conditions. Measures to achieve this include: - Development of research infrastructures (large-scale research facilities such as super-computers, libraries, networked databases, testing facilities, observatories), so that European scientists remains at the forefront of advances in research. (€3500m); - Strengthening the innovative capacity of small- and medium-sized enterprises and their ability to benefit from research, by helping them outsource research, increase their own research efforts, extend their networks, make better use of research results and acquire necessary technological know-how. (€1680m); - Development of Regions of Knowledge, to strengthen the research potential of the regions by bringing together regional authorities, universities, research centres, enterprises and other interested parties. (€140m); - Unlocking the research potential of the EU's convergence and outermost regions, to stimulate their greater participation in EU research activities. Such measures could include twinning, networks for exchanging know-how and expertise, secondments, acquisition of research equipment, awareness raising activities. (€490m); - Bringing science and society closer together, to counter the lack of public participation in the setting of priorities, and the perceived isolation of the scientific world from everyday realities of life. Objectives include strengthening and improving the European science system, including access to research results and the link between science and policy-making, promoting better understanding of issues that have an impact on society's perception of science, such as ethics, law, culture, improving the gender dimension of research, attracting more young people into science, and supporting the effective two-way communication between scientists and the general public. (€490m).

In broader terms, support can be given under this programme to the coordination of Member States' research policies, in particular with a view to putting into practice the EU's growth and competitiveness agenda. Joint Research Centre - The European Commission's Directorate-General Joint Research Centre will receive funding amounting to €1617 million from the Seventh Framework Programme to provide customer-driven scientific and technical support to the EU policy-making process, helping in the implementation and monitoring of existing policies and responding to new policy demands. The JRC's major customers are Commission services (policy DGs), other European institutions such as the European Parliament, EU agencies and Member States.

The JRC will organise its work along four main themes: * Prosperity in a knowledge-intensive society; * Solidarity and the responsible management of resources; * Security and Freedom; * Europe as a World Partner. Euratom activities - For reasons stemming from the legal set-up of the EU, all nuclear research and training activities are funded under two separate Specific Programmes, under the Euratom treaty. These activities will be carried out by both the Joint Research Centre and the research community in general and concern nuclear waste management, environmental impact and basic knowledge; nuclear safety and nuclear security, fusion energy research and research on nuclear fission and radiation protection. The total amount proposed for such activities is €2800.

Common themes and issues - The Commission will be responsible for ensuring the coherence of these Specific Programmes. There are a number of aspects that will reinforce the operation of all the Specific Programmes as part of an integrated European programme of research. Joint calls for proposals, where actions have strong relevance to different parts of the Co-operation, People and Capacities programmes, or across different themes within the Co-operation programme. International co-operation will be a specific theme of the Capacities programme, with an allocated €315m, but it will form a part of all programmes, and all will have dedicated actions in this field.

The ethical framework for the Specific Programmes is an issue of great importance for the European Commission. All Specific Programmes contain clauses making clear the necessaity to operate with respect for fundamental ethical principles and existing international law and conventions in this area. Human cloning for reproductive pruposes, research activity to modify the genetic heritage of human beings, the creation of human embryos for the purpose of research or stem cell procurement are explicitly ruled out. No research can be financed by the Framework Programme in a particular country that is contrary to the laws of that country. Further more projects that raise any ethical questions are submitted to a rigorous 4 stage process before being funded (national ethical review, European scientific review, European ethical review and consideration by a Committee of Member States). A fuller explanation of the ethical implications of the Commission's proposals can be found in MEMO/05/121.

SME participation will be a major priority of the new programme. In addition to the specific actions in the Capacities programme, SME research interests are included throughout the Co-operation programme and will be identified in more detail in the work programmes and calls for proposals. The People programme will have a special emphasis on involving personnel from SMEs. The streamlining of the programmes and the funding instruments should also boost the participation of SMEs. Dissemination and knowledge transfer: efforts to improve the take-up of research results are a key feature of all the Specific Programmes, with emphasis on transfer of knowledge across national borders, different disciplines, and between academia and industry.

Simplification - making the programmes more accessible and user-friendly - is a major priority for the Commission. The most improvements can be made at the level of the rules of participation, which will be proposed by the Commission later this autumn. But a number of improvements are already possible at the level of Specific Programmes, such as: improved efficiency through the management of administrative tasks by an outside agency; streamlining of the funding schemes available to participants, principles established for evaluation criteria; streamlined systems for the approval of projects; clearer programme architecture.

[1] All figures in this document are expressed in 2004 prices. The figures in the texts adopted by the Commission are adjusted for inflation over the seven year period.

From noticias.info, Spain - September 21, 2005

 

Brazil Public-private Projects Get Green Light

Brasilia - Brazil has removed the final obstacle to public-private investment projects meant to pump billions of dollars into the country's rickety infrastructure and remove barriers to long-term growth. The government on Thursday approved rules for a long-awaited guarantee fund to back the projects that pool public and private cash. Creation of the fund means the government can move ahead on feasibility studies and negotiations with firms interested in public-private partnerships or PPPs.

The PPP scheme's 4.2 billion reais ($1.8 billion) guarantee fund, managed by state-run Banco do Brasil (BBAS3.SA: Quote, Profile, Research), backs the government's financial commitments in projects. The fund could be expanded to 6 billion reais, based on demand, said Vice Treasury Secretary Tarcisio Godoy. Brazil has had to limit its infrastructure spending to slim high public debt. Low infrastructure spending has increased the cost of shipping goods and reduced the competitiveness of exports - especially the farm goods driving Brazilian growth.

The partnerships are one way to boost investment without easing fiscal controls favoured by investors. Five PPP projects are currently under study, including a rail link between northern and southern Brazil and highway improvements in the north eastern state of Bahia. Brazil has traditionally lost investment among the so-called BRIC emerging powers, which also include Russia, India and China, due to clumsy and unclear regulations. Brazil's government hopes the PPP scheme will remove the fear of foreign firms to invest in South America's largest economy and spur up to $13 billion in direct foreign investment over the next four years.

From Reuters - September 16, 2005

Fair Returns, Job Creation, Not "Just Charity" Is Path To Success For Business In Developing Economies, Says First-Ever Survey Of Fortune 500s, NGOs and Media

Mixed Awareness and understanding of the Millennium Development Goals among many companies and how the MDGs relate to business. Africa Least Likely To Attract Investment, Most In Need Of It, Report Says. In an in-depth survey, fielded by Edelman, the Corporate Social Responsibility Initiative of Harvard's Kennedy School of Government, and Prince of Wales International Business Leaders Forum, of a sample of Fortune 500 companies, global NGOs, investors and the media, about the roles and responsibilities for business in international development, companies and NGOs agreed that corruption in poor countries is the greatest obstacle to companies deciding to enter these markets. There was also general consensus on the need for innovative partnerships when doing business in developing countries, however there were differing perspectives on other key questions of priorities, roles and desired outcomes.

Key findings of the survey, Business and International Development: Opportunities, Responsibilities and Expectations, include: *Companies and NGOs agree on lead role for government: poor countries to reduce corruption; rich countries should address trade policies and not just focus on aid; *Companies acknowledge the value of partnership in developing markets; they recognize that NGOs contribute technical and on-the-ground expertise; less understanding and awareness among companies about the specific role and contribution that multi-lateral institutions offer; *Mixed awareness among companies of Millennium Development Goals; companies using different language from NGOs and multi-laterals regarding international development; *Companies rank Africa lowest among all regions for opportunity to: "advance international development and produce returns for companies"; East Asia ranked highest; *Unilever, P and G, BP, Nike, Citigroup cited multiple times by businesses, NGOs and media as leaders in international development; All respondent agree that business' greatest contribution to developing countries is job and enterprise creation, not charity; *Both companies and NGOs agree that media coverage on business and international development slants negative; *NGOs more inclined to trust companies that point to profit motive - as opposed to "corporate citizenship" - as key driver in decision making in poor countries; *Free local press cited as key factor in establishing stable markets in which companies want to invest.

Edelman CEO, Richard Edelman, observed, "We are constantly counseling companies to engage NGOs and other stakeholders, about their own activities and impacts. These survey results demonstrate that the international development community - NGOs and multi-laterals - need to re-double their own efforts to engage business about the Millennium Development Goals and related issues with both an approach and language that companies are going to understand and respond to." Jane Nelson, director of the Corporate Social Responsibility Initiative at Harvard's Kennedy School of Government, noted, "Over the last ten to fifteen years, leading companies have learned the value of engaging and partnering with stakeholders around various aspects of their sustainability and ethical business strategies. It is encouraging to see that companies - and NGOs - also recognize the critical role that partnerships can play around leveraging business' role in developing countries."

Adrian Hodges, Managing Director of the Prince of Wales International Business Leaders Forum, added, "The research findings indicate that thanks to the growing ranks of responsible companies and responsible NGOs, we are moving away from an era too often dominated by the focus on 'what business should not do' to a period which recognizes 'what business can do'. This shift in mood will have the most impact if companies are given appropriate incentives to invest in different business models and new markets, and if civil society and public sector partners are willing to come to forward to form partnerships for common goals. "

Full Report - The Corporate Social Responsibility Initiative at the Kennedy School of Government (KSG) is a multi-disciplinary and multi-stakeholder program that seeks to study and enhance the public role of the private enterprise. It focuses on exploring the intersection between corporate responsibility, corporate governance and strategy, public policy, and the media. The initiative aims to bridge the gap between theory and practice, encourage innovation, build leadership skills and support constructive dialogue and collaboration between different sectors.

The Prince of Wales International Business Leaders Forum (IBLF) is a not-for-profit organization established in 1990 to promote responsible business leadership and partnerships for international development. With a membership of over 80 member companies from around the world, IBLF works in over 50 countries mobilizing visionary leadership and engaging the capabilities of companies in creating innovative and sustainable development solutions. Edelman is the only independent global communications and public relations firm, with 1,900 professionals in 43 offices worldwide. Advertising Age recently profiled Edelman as one of their "Best Agencies in 2004" and The Holmes Report named Edelman the 2004 International Agency of the Year.

From AllAfrica.com, Africa, by Edelman (New York) - September 16, 2005

Blocking the Wave of Privatisation of Water

Montevideo - The nations of South America must urgently take steps to guarantee that water is legally considered a social, not an economic resource, and to block the advance of transnational corporations, which are increasingly gaining control over public utilities in the developing South, warned the French foundation France Libertes.

Danielle Mitterrand, the founder of France Libertes and the widow of former French President Francois Mitterrand (1981-1995), headed up a delegation of the foundation that ended a tour to South America Friday. The aim of the tour was to promote the concept of water as a public good, and to speak out against the privatisation of water and sanitation companies. "The foundation was initially involved only in the defence of human rights, including legal, economic and social rights, but we gradually came to realise that the right to water is essential, and that water was going to become one of the most pressing problems in the world," said Catherine Legna, projects director in France Libertes. "In our view, the commodification of water is simply unacceptable," she told IPS. "Products can be bought and sold, but the buying and selling of resources that are indispensable to life itself, like water, is intolerable."

The delegation's first stop was Brazil, where the foundation's representatives signed agreements with the leftist government of Luiz Inacio Lula da Silva, in which Brazilian authorities committed themselves to blocking any attempt at privatising the management of that country's water. France Libertes will also serve as a link between municipal governments in Brazil and the French public enterprises Eaux de Paris and Ville de Grenoble, to share experiences in the "social management" of water. The foundation also promised legal advice to municipal authorities in Brazil in cases in which multinational companies running water utilities have failed to live up to the terms of their contracts.

The activists later headed to Bolivia, on the invitation of social movements in the western city of El Alto, a sprawling working class suburb located next to La Paz. Through massive street protests, the civil society groups forced the government to cancel its contract last January with the French corporation Suez-Lyonnaise des Eaux, which was running the water company. The social movements in El Alto, which has a largely indigenous population of 800,000, accused the French firm of infringing the contract and of charging unjustifiably high rates. The company was also accused of failing to keep its promise to invest 800 million dollars in the construction of a water treatment plant, of dumping waste into Lake Titicaca, and of leaving many people with no access to water. "Bolivia is one of the countries in the most dire situations, but it is also the country that has the strongest social movement, because it is based on the deep indigenous roots of the Bolivian people," said Legna. "They have a strong sense of solidarity and awareness of the concept of using the water for the public good," she added.

France Libertes will play the role of intermediary in order for the public water company in the central city of Cochabamba to receive advice from the French cities of Paris and Grenoble. "We believe it makes the most sense for the city governments, which know what it means to administer these resources, to directly contact each other," said Legna. Activists point out that in the past few years, a large part of the planet's clean water has fallen under the control of transnational corporations. They also warn that in just a few years time, a handful of corporations will control almost 75 percent of all water for human consumption in the world, as an increasing number of governments privatise water and sewage services. The main concessionaires are the French Vivendi-Generale des Eaux and Suez-Lyonnaise des Eaux, which control 40 percent of the market and provide services to some 110 million people in more than 100 countries. Suez reported net earnings of 2.42 billion dollars in 2004, 2.8 percent up from the previous year.

Governments argue that their main motivation in handing over drinking water distribution and treatment and sanitation services to the private sector is to improve public services. But instead of alleviating the problem of limited public access to clean water, the private corporations have inflated rates, and corrupt corporate practices have led to severe crises in cities and entire countries in some cases, say the activists. One-fourth of the world's population has no access to clean water, which leads to the deaths of at least 34,000 people a year. The U.N. has warned that unless drastic measures are taken, within the next 20 years, 1.8 billion people will live in countries or regions that suffer severe water shortages.

Mitterrand visited Buenos Aires shortly after Suez decided to pull out of Aguas Argentinas, a company that was privatised in the 1990s and which serves 10 million people in Greater Buenos Aires. The French company decided to leave Argentina due to resistance by the administration of Nestor Kirchner to allow an increase in rates, which were frozen during the South American country's economic meltdown in late 2001. Mitterrand said in Buenos Aires that in her view, Suez "failed to live up to its agreement" with the Argentine government. She also said public services should always be provided by the State, and not by mixed or private systems, "which do not work."

The delegation decided to end its South American tour in Uruguay "as a symbol, to tell the world that an example was set here," said Legna. "The case of Uruguay is unique in the world, and that's why we came. Not to give advice, but to exchange experiences," she stressed. In a referendum last year, 64.7 percent of Uruguayan voters came out in favour of introducing a constitutional amendment which states that "water is a natural resource essential to life" and that access to piped water and sanitation services are "fundamental human rights". The constitutional reform also defined water as a public good and guaranteed civil society participation at every level of management of the country's water resources.

In addition, the new clause established that piped water will be supplied "exclusively and directly by state-owned legal entities", and that concessions to private firms would be cancelled. That raised questions regarding the contracts that had been granted to the Spanish companies Uragua and Aguas de la Costa, which were already operating in the southeastern province of Maldonado. However, the leftist government of Tabare Vazquez, which took office last year, issued a decree allowing the companies to continue operating in Maldonado on the understanding that the constitutional reform was not retroactive. But in the end, the government cancelled Uragua's concession for breach of contract and for failing to invest in the promised sanitation works. In Uruguay, Mitterrand met Vice President Rodolfo Nin Novoa and Montevideo Mayor Ricardo Ehrlich to express her concern about the government decree. "We said all of the private companies providing water services should leave," she said in a press conference held after the meeting.

From Inter Press Service (subscription), World, by Raul Pierri - September 23, 2005

 

WEF Seeks Greater Business Role in Fighting Poverty

The World Economic Forum (WEF) on Wednesday called on the United Nations (UN) and its member governments to recognize the key role that partnerships with business can play in delivering education, health and water sanitation services in poor regions of the world. The report comes as leaders gather in New York to assess slow progress in meeting the Millennium Development Goals (MDGs), amidst growing calls for reforms at the UN. Business partnerships can harness new resources for poverty alleviation and public service provision in poor countries, according to the WEF's Financing for Development Initiative. Entitled "Building on the Monterrey Consensus: The Growing Role of Public-Private Partnerships in Mobilizing Resources for Development", the report was produced in co-operation with the United Nations Department of Economic and Social Affairs (UNDESA) and the Swiss Agency for Development and Cooperation (SDC).

The report examines the status and future promise of public-private partnerships (PPPs), which are formed when a private company joins with a government, international agency or non-profit group to work on a specific project. It summarizes a year-long process of consultation with over 200 public-private partnership practitioners and experts from governments, businesses, NGOs, philanthropic foundations and academia.

Partnering with the private sector can tap new resources and expertise that are greatly needed in development programmes, according to the report. Based on successful experiments with PPPs in recent years, it states that the very concept of development appears set for a transformation. Resources leveraged by the private sector can help narrow the US$50-100bn gap in financing for achieving the MDGs. In addition to providing direct investment, the report estimates that private companies are donating billions of dollars every year to support development programs in low-income countries. These donations, both cash and in kind, represent a growing source of support for development projects, adds the report.

Applying private-sector expertise to development may have even greater value than financing, the report suggests. The capacity of business to manage large-scale operations efficiently and develop innovative solutions to tough problems can be applied to projects and also transferred to governments through partnership efforts. Yet most successful PPPs are still in the pilot stage. To scale up successful PPP models, the report recommends a number of actions that are needed:

- Political leaders should help strengthen public awareness and support for PPPs; - The public sector should strengthen its capacity to engage in PPPs and improve procurement rules to encourage private-sector participation in projects while avoiding conflicts of interest
- Improving national policies and institutions is key to the success of PPPs; - Voluntary guidelines and information on best practices can provide much-needed models for PPP implementation; - Partnership brokering and facilitation is needed to help partners develop, negotiate and enact PPP arrangements; - All sides should work to bridge the cultural gap between the public and private sectors; personal leadership in building such bridges is critical; - Improved financing instruments are needed to facilitate private-sector engagement. These include loans, grants, risk finance, commercial capital and subsidies

Richard Samans, Managing Director of the Global Institute for Partnership and Governance at WEF, said, "This report adds to the growing evidence that public-private partnerships are a promising tool that deserves to be taken more seriously by everyone who has an interest in expanding growth and opportunity in developing countries. It builds upon our own growing experience in facilitating partnerships involving our member companies in the areas of health, education, water, energy, information technology and disaster relief."

From India Infoline.com, India - September 14, 2005

Global Push for Water Privatisation Threatens UN Poverty Targets

Efforts to meet the Millennium Development Goals (MDGs) to reduce global poverty are being hampered by the support for water privatisation from rich country governments and international institutions according to a report published on the eve of the UN World Summit by the World Development Movement (WDM). The paper shows how the provision of clean water is crucial to the MDGs on child mortality, combating HIV/AIDS, malaria and other diseases and promoting gender equality as well as the specific MDG target of halving the proportion of people in developing countries without access to safe drinking water by 2015. WDM condemns rich country governments, especially the UK Government, and international institutions such as the World Bank and IMF for pushing privatisation as the solution to the water crisis at the expense of alternative approaches such as community led provision or reform of the state sector.

As debates rage at the UN in New York over whether existing poverty pledges are even mentioned in the text of the declaration to be signed by world leaders later this week, WDM expressed concern that the focus has moved away from debates over the policies necessary to meet the MDGs. Head of Policy Peter Hardstaff said today: "There is a real danger that in the face of attacks from the US, even mentioning the Millennium Development Goals will be seen as a success without any real debate on whether the policies being promoted by rich governments and global institutions such as the IMF are actually hindering progress towards those goals. The push for water privatisation as a solution to the water crisis is failing poor countries, we urgently need a new strategy."

"The provision of clean water is crucial to a number of the MDGs. In country after country water privatisation has failed to provide either the investment promised or has led to price rises which force the poor to use other dirty water sources. Despite this it is still being forced on poor countries as a condition of debt relief and backed by tens of millions of pounds of UK taxpayers money spent on dubious advice and PR from free-market business consultants." Far from having an ideological position against water privatisation, WDM argues there are strong economic and structural reasons why the policy is failing. WDM points to the recent high profile collapse of a flagship water privatisation in Dar es Salaam, Tanzania as typical of water privatisation being forced on a developing country and private sector failing to deliver the investment necessary.

According to the Tanzanian government, the private water company, City Water, delivered under half the required investment of US$8.5 million during the first two years of operation. Privatisation was a condition of Tanzania receiving debt relief from the IMF and World Bank and was supported by a PR campaign (including a privatisation pop song) paid for by £270,000 of UK aid money. WDM says the UK's position is essentially unchanged from when former Secretary of State for International Development Clare Short stated that: "Privatisation is the only way to get the investment that countries need in things like banking, tourism, telecommunications and services such as water".

From Harold Doan and Associates (press release), CA - September 13, 2005