Here we go

It's already starting.  Russia is mad.  There is a necessary question:  why has the US pushed so hard, all of the sudden.  Many accounts claim Mr. Bout was very useful to the US during invasions in the last decade with transporting supplies to the Middle East.  Both Russia and the US have been said to use him to provide arms to various militias that the countries couldn't officially back.  So in a way, Russia's anger is much more understandable than the US's insistence on extradition and penalization.

Mr. Bout is said to have armed the Colombian rebels--not to mention countless other groups around the world.  Did his moral, ethical, and legal transgressions finally get to the point where they outweighed any possible benefit to the US?  Or is the possibility of learning Russian secrets too enticing?

Sitting in my cubical, I clearly don't know the answer.  But frankly watching this unfold has been more exciting than this season of Dexter.  And I've actually been enjoying this season of Dexter!

It's finally happening...

Let's hope that Victor Bout's imminent extradition reveals how this underworld of international weapons trafficking truly worked.  When viewed dispassionately, Mr. Bout's weapons, transport, and trade empire was unbelievably impressive.  The horrors attached aside, learning the inner workings will be fascinating.  Furthermore, a close eye should be kept on how Russia responds, as they seem to have been protective of possible secrets involving Mr. Bout.  Will this effect Russo-Thai relations?  Was there a deal made between the US and Thailand?  Is there actually anything to tell at all?  Tune in next time...

Transparency International

Transparency International has posted its new Corruption Perception Index.  I've heard from both insiders and news articles that these rankings, while widely read and used as fodder, are more subjective than many would hope.  But more data is becoming available that will eventually lead to more objective means for calculating corruption.  Due to new laws in the US and abroad, many of the world's largest companies will be forced to disclose every dime "donated" to governments and their officials.  Until then, however, let's enjoy these rankings, which are constructed based on surveys of experts and international business people.

Enjoy!

Oh, and you all know how I love maps.

When do we trust? When they offer $60 billion.

We've had an uncomfortably comfortable relationship with Saudi Arabia for a long time.  Since WWII, we've had our ups and downs while maintaining peace and attempted cooperation.  Now the Pentagon has approved an arms deal possibly worth up to $60 billion.

I am struggling very hard to paste my opinion here.  Let's just say that it will be imperative to track these sales.  I'd be interested (and terrified) to see where these planes, helicopters, etc, have landed in five or ten years, and what they are being used for.

Quick note of clarification:  Saudi Arabia has shown strong support for US initiates in recent history, and I don't mean to imply corruption or incompetence.  But historically, when $60 billion or some obscene amount worth of US military equipment goes into a turbulent region, people like Victor Bout get giddy.

Trust the Nigerian People Like We Trust Alaskans!

Earlier in the year, while preparing a literature review for a paper on natural resources and economic development, I was lucky enough to read an article by the famed economist Xavier Sala-i-Martin.  I've enjoyed his papers in the past, as he's brilliant and quite a character.  Here is his website, if you want proof.

 Who said economists lead boring lives?

Anyway, the paper in question, linked here, co-authored by Arvind Subramanian (awesome name), is quite unique, as it offers not just rigorous econometric analysis but also some clear, novel, and ambitious policy suggestions. 

The suggestion that hit me is that to avoid corruption, underperformance, and all of the social ills that come along with both, the government of Nigeria should simply distribute all of the oil revenue to its people.  Directly.  Tax them if necessary, but don't keep it.  This is similar to the policy they have in Alaska, where they pay people to live there.  When I was in French camp, the amount was $1000 per person per year.  Apparently, this amount has varied over the years.

The reasons that this is a good idea are many.  The most important one involves keeping a democracy healthy.  If a government is the recipient of massive oil wealth, that means that a large portion of their budget does not come from taxes.  If this country has a very poor population, and an even poorer system of tax collection, the proportion of government budget that comes from taxes turns miniscule.  This means that the government is not dependent on its people in the same way as non-oil rich countries, often resulting in oil-rich countries turning a blind eye to their peoples needs and requests.

Another reason why this is important is it requires the government to collect taxes from people using a known tax rate.  This leaves less room for corruption, as the government's budget should be much easier to calculate.  Additionally, people will receive money (happy!) and then be taxed (sad...).  When government takes money away from its people through taxes, people want to make sure that it was for a good reason.  In this way, there will be much more public pressure for government to spend the oil wealth (first distributed to the public and then taxed) properly than if they bypassed the people altogether.

While there are more reasons why this would be an awesome idea, I'll just end with this simple one.  If you're a Nigerian, and you realize that not only could you get some of this oil money in which your government is bathing but it's also economically and politically the right thing to do, wouldn't you push for this?  I'm not a Nigerian, but if I were, I would.  And therefore it's the job of the Nigerian media to push for this kind of political-economic reform.  Push!!!

Venezuelan Gerrymandering

So the results are in, and Hugo Chavez is scared.  The opposition won 52 percent of the vote, which allows them a whopping two thirds of the delegates.  Now, for those of you math inclined, you might realize that in a functional system, 52 percent of a vote should result in 52 percent of the seats.  But this is Venezuela, so the opposition should be thankful that they got 40 percent.  It's enough to stop rule by decree, at least in theory, as that would necessitate the Chavistas controlling 66% of the Asamblea Nacional.  But more importantly, it shows a real possibility that Chavez could be challenged in the presidential election two years from now.

The above math is a result of a crazy amount of gerrymandering, where the districts are not proportionally represented in the least.  But it should be noted that even proportional gerrymandering can seem ludicrous.  Here is a picture of the district representation from my home state of Maryland.  Look at the red district.  At least it's proportional?

I miss Augustus

I miss Augustus.  He was definitely the best guinea pig.  Ever.  Accept it.  But this one's pretty darn cute as well.

My apologies to those who favored the short-lived Lavender.

Will they be ready? Will it matter?

When I was in Delhi, the talk of the town . . . was indecipherable to me as all those who told me, "Everyone speaks English in India" clearly had no knowledge of the situation or just didn’t like me very much.  But when I could understand people, they often pointed to the construction going on at the city’s center.  “They still aren’t done!”  “I wonder if they will finish building the stadium in time.”  “Even if they do, I wouldn’t want to go in it!”  Things in Delhi are a mess.

So can it be any wonder that many are delaying their arrival?  It looks like the Queen of England wasn’t just being rude when she canceled over a month ago.  And now, New Zealand is postponing its arrival as Prime Minister Manmohan Singh calls a crisis meeting.  For me sitting on the sidelines, it’s kind of like watching a train wreck in very slow motion (was that a mixed metaphor?). 

The real question, of course, is will this act as any sort of wake-up call?  And for whom?  South African sure put India to shame.

One step closer to downloading consciousness!

Nothing to do with either of the promised topics, but this is a pet passion of mine.  So enjoy!

We may not be able to measure utils, but maybe we can measure consciousness...

My Friend Suffers at the Hands of Corruption

My good friend in Morocco wants to become a teacher, serving her fellow Moroccans.  Unfortunately, despite her studious nature, stellar academic performance, and passion for the profession, she lacks one necessary trait:  she is not comfortable paying a bribe to pass the teaching test.  Is this a prerequisite for all teachers in Morocco, or did she just run up against a bad egg?  I shutter to think what it means if the only teachers in Morocco are those who lacked the moral fortitude to stand up to a corrupt system.

This is going to sound silly, but stay with me.

What if all negotiations were done with a different sort of drink.  Instead of coffee in all of the mugs around the grand oak table, all cups would be filled in this way.

How could you try and screw over a country, a business, a group, or even your adversary at the other side of the table while looking down into these mugs?

At the very least, it would clearly reveal anyone lacking a soul.

Would you bank in Kabul?

Now the head of Nato is complaining that Hamid Karzai isn't doing enough to combat graft.  With all of the stuff that's going on there, it's almost surprising that corruption is SO BAD that it keeps dominating the discussion.  This article highlights an interesting aspect of the need to fight corruption.  Corruption doesn't just disrupt every single process within a country, it also eats away at international public support.  When corruption is rampant, we all throw up our hands and say, "What's the use?"  Unfortunately, it seems like many of the top officials might not know how to answer that question.

Maps of the world--Corruption vs. Democracy

I love maps.  More than simply allowing you to know where things are, they're an excellent way of visualizing data.  For example, here is Transparency International's Corruption Perception Index. Now, let's look at the Economist Intelligence Unit's Democracy Index. There is a strong correlation between the two.  Something that immediately popped out at me was India.  It's a democracy.  The EIU classifies it as the 35th most democratic regime in the world.  That being said, it is very corrupt.  It ties for 84th least corrupt on TI's rankings of country corruption.

The interested reader should read more about how TI measures corruption and how EIU defines democracy.

I am not drawing any conclusions.  Really I'm not.  Seriously.  This is far too complex an issue.  I just enjoy seeing Morocco ranked 89th in terms of corruption while seeing it classified as an autocracy--it's the 120th most democratic regime, according to EIU.  Singapore (2rd least corrupt) and Hong Kong (12th least corrupt) are perennially ranked as two of the least corrupt countries in the world.  Yet neither, particularly Singapore, boast a democracy.  EIU ranks them as the 82nd and 84th most democratic regimes in the world, giving them the designation of a hybrid regime.  Yet this is just a failing of terminology.  EIU looks at the following four attributes of a country to determine its status:

"Whether national elections are free and fair"

"The security of voters"

"The influence of foreign powers on government"

"The capability of the civil servants to implement policies"

The two city-states, while enjoying the power to elect local representatives, do not have the power to vote for their leaders.  Still, EIU ranks them as far more democratic than the "democracy" of Afghanistan, which ranks 136th.  In this regard, I couldn't agree with EIU more.  For we could easily ask, elections aside, did the people of Afghanistan elect Hamid Karzai?

Russian Police

The Russian Police are out of control.  This report is simply scary with the following statistic quite telling: 


"Out of the 5,000 crimes committed by police in 2009 (up 11 percent on 2008), more than 3,000 were linked to corruption and abuse of power, according to official statistics."


As I said in a previous post, "The fish rots from the head down."  Regardless of whether or not the top Russians themselves are actually corrupt (...), they sure seem to express little concern for their underlings' actions.  They are secure in their power and wealth, and this article implies a situation where top officials simply not concerning themselves with a system rife with corruption.  In this case, it looks like the only hope of tackling these problems are an extremely active and courageous media, as well as outside pressure:


"The European Court of Human Rights in Strasbourg regularly condemns Russia for police torture and draws attention to the slow investigations, the tardy opening of criminal cases and the mild sentences handed out to offenders, leading to a feeling of impunity among police officers."


We can hope.

Zambia

Zambia's economy has collapsed and it's healthcare system is in shambles.  That's why when I found this article from June, not even the baby animal blog could cheer me up.

Let's take a look at the issues facing Zambia as well as some of its history.  Time to dig into my notes from earlier this year when our office was looking into Zambia's situation.

Zambia faced a dearth of educated citizens to run the country after independence in 1964.  Its infrastructure was in ruins or non-existent, and its economy, dependent on foreign expertise, was overly dependent on copper.  When the price of copper plummeted from 1980, Zambia’s economy went into a tailspin, not seeing signs of recovery until the copper regained its historical real price in 2006.  During this two and a half decade depression, the economy contracted by a third.  Zambia took loans from foreign countries, the World Bank, and the International Monetary Fund with hopes of a rebound in the price of copper.  As the depressed price lasted through the 1990s, Zambia experienced some of the highest levels of foreign debt per capita in the world, even after some level of debt relief. 

In 1975, neighboring Angola and Mozambique gained independence and plunged into bloody civil wars.  Zambia experienced waves of refugees fleeing some of the harshest violence the continent had seen.  Concurrently, Zambia supported South Africa’s ANC movement.  But this resulted in frequent raids from South Africa on ANC training camps located in Zambia. 

Against this chaotic backdrop, we see the Zambian people struggling to improve their healthcare and education systems.  Loss of teachers due to HIV/AIDS and a lack of proper infrastructure and materials has resulted in literacy rates amongh 15-24 year olds dropping from 79 in 1990 to 70 in 2004.  Other statistics paint a rosier picture but must be contrasted with the falling literacy rate.  Net erollment fell from 80 percent in 1990 to 76 percent in 2003 but then shot up to 97 percent just three years later.  Percent of students reaching the seventh grade rose from 64 percent. in 1990 to 83 percent in 2006, with 79 percent of girls reaching that level and 91 percent of boys. 

Health statistics, while some are improving, are still at abysmally poor levels.  Infant mortality dropped from 107 per 1000 live births in 1992 to 70 in 2007.  Under 5 mortality dropped from 191 deaths per 1000 to 119 over the same period.   Maternal Mortality rose from 649 per 100,000 in 1996 to 729 in 2002 but then dropped to 449 in 2007.  However, life expectancy overall fell from 50.18 in 1970 to 46.47 in 2008.

Public policy has failed in certain respects.  The Millennium Development Progress Report blames the high levels of inequality (GINI rose from 48 in 1958 to 50.8 in 2004) on lacking or failed labor and wage policies.  Neither nutrition policy nor economic safety nets are in place to fight the universal problems of malnutrition and poverty in general.  Furthermore, any effective policies are mostly limited to urban areas, leaving rural areas without access to adequate schools, medical facilities, or skilled professionals of any kind, due to significant “brain drain.”  Skilled physicians often resist rural work and not infrequently leave the country for more lucrative opportunities elsewhere.  The percent of births attended by a skilled professional dropped from 51 in 1996 to 46 in 2007.

So to all of this, we now add corruption.  We knew that it was rampant here already, but it is depressing to see it directly impeding aid to the country's struggling health care system.

Funny Cartoon

Nothing to do with anything, but I love this cartoon from Frank Rich's most recent column.

Cute Animal Blog!

I saw this a long time ago and just stumbled upon it again.  I couldn't blame any of you for never reading my blog again in favor of it!

Unfortunately, it is no longer being updated.  Enjoy the back posts!

Karzai...can you at least pretend to be honest?

I have no words.

Kenya--Constitutions and Snubs

Kenya's new constitution, summarized well in this BBC article, represents some of the largest strides toward a stable democracy capable of combating corruption effectively.

The world is trying to rejoice in Kenya's step back into grace.  So why would they go ahead and do THIS?!?  People can have different friends, and two friendly countries will often have conflicting relationships with a third.  But if a sitting president has been indicted for war crimes and crimes against humanity by the ICC and has an international warrant out for his arrest, it's probably a political faux-pas to invite him over for tea.

So long, India!

I'm getting on a 15 hour plane back home in a couple of hours.  I had a successful trip.  It's going to take a while to digest everything that I've experienced here.  I'll add some pics of my trips--specifically awesome photos of some monkeys--when I return to NYC and settle.

On the plane, I'll begin Gandhi's autobiography.  I spent today at Rajghat (where his ashes were taken), his memorial museum, and the Baha'i Lotus Temple.  Completely filled with beauty but overwhelming at the same time. 

For now, hurray (I hope)!

Jakarta and the Media's Role

The Jakarta Globe reported on the media's role in fighting corruption and how they are failing the people.

The Press Council chairman complained that "News reports on corruption were still mainly focused on law-enforcement aspects, such as the prosecution of perpetrators, rather than on the preventive aspects of the campaign, and thus failed to provide much of a deterrent for would-be offenders."

This is a difficult issue.  There is no question that the media is a key tool in fighting corruption.  Yet we must understand that most outlets are driven by sales.  We cannot ask them to focus on something other than maximum consumption, specifically because the media is only effective if people consume it. 

So what sells?  I'm not sure, but I'd love to hear a bunch of news editors debate this.

Corruption Makes Me Sick...Literally!

The roads here in Gurgaon have gotten steadily worse since my arrival last week.  The persistent rain has seeped through the top tar and softened the mud below, leading the soil to depress and the pavement to crack.  This last trip back from Delhi was the bumpiest yet--and it's just going to keep getting worse.

The roads in Gurgaon have not been built well.  Instead of creating a concrete base on which the tar is then layered, the builders lay the tar directly on the earth.  This would've been almost acceptable if they had first smoothed the earth and then put down gravel to create a base.  Alas, that was too expensive.  Instead of stripping the crumbling road, they fill in the holes with fresh tar and wait for the next week of rain to do its damage.  Why?

Simply:  corruption.

Government officials make lots of money off of the road racket.  They put out a bid for contractors to build roads.  The best bidders--and by that I mean those offering the biggest kickback--then subcontract the work out to the builders using the cheapest materials so as to retain the most cash.  This is how they make their profits after bribing the local government.  DLF, the company that owns most of Gurgaon, has pleaded with the government to be able to build their own roads properly, but the government makes too much money through this corrupt process to allow them to do this.

And what's the result?  I have a stomach ache.

Amazing Bird!

I went to the Taj Mahal today, so in the spirit of being totally blown away, WATCH THIS!

It's a good day.  I'll keep it that way.

Bribery or Theft?

It takes two to tango--and to bribe.  One person must offer a bribe and another must accept one.  Philosophers and the less lofty have argued that all have an obligation not to offer bribes just as none should accept bribes.  But what if the offer isn't really an offer?

I am reading Jared Cohen's Children of Jihad, a fascinating and entertaining book about his time getting to know the youth of the Muslim world.  When he is attempting to leave the airport in Tehran, a member of the Islamic Revolutionary Guard Corps detains him and won't let him leave the country without a $1000 bribe.  This would strike me far more as theft than as bribery.  The guard is saying, "Pay me or else... ."  In a mugging, the thief says, "Pay me or else I'll stab you."  That being said, in an earlier post I mentioned the Indian example of bribing to expedite a passport process (a process that might not be possible at all without some grease on the wheel).  But most would consider this a bribe rather than a theft.  Would the same be true in Jared's example?  Because I feel like he was literally robbed.  And frankly, I would be comfortable saying that one trying to get a passport is robbed as well.

A bribe is when something of value is OFFERED not EXTORTED.  A gray area might be getting out of a troublesome ticket.  Or even grayer might be a situation where a company is told that they will have no chance at winning a certain contract without a transfer of cash under the table.

Thoughts?

Enough of this gray area.  Here is some more from Malaysia!

Victor Bout

I "love" this guy.  And by that, of course, I mean I am fascinated by the fascillitator of countless wars and atrocities throughout the world.  It helps me gain a better idea of just how hard these fights against corruption can be to read articles like this.  Lord of War is based on him.  Fun Film!

Malaysia is trying

This post from Bernama, Malaysia's National News Agency, highlights a common effort that is often insufficient.

Dr. Koh Tsu Koon said, "Action against one 'big fish' is probably better than action against 1,000 'small fish'."  This fits nicely with the aphorism, "The fish rots from the head down."  Do what you wish against petty crime and corruption, but if the ones calling the shots are corrupt themselves, no real reform will ever happen.

But, as many argue, both steps are necessary.  Officials at all levels need to know that their actions have consequences.  Paul Collier explains in his 2000 paper, "How to Reduce Corruption," corrupt societies need a "Big Push" effort.  This requires a full force fight against the big fish and the minnows who have swum astray.

Kitten Fashion Show!!!

Alright, after two heavy entries, I think it's time for our first break.  Enjoy this kitten fashion show provided to me by inimitable Annina DeLeo, of course.  How does she find these things?

Make sure not to miss sleeping Napoleon.  Too good.

Rent and underpayment--two sides of the same corrupt coin

My last post focused on the issue of underpayment of officials and how it can lead to corruption.  Linked here is yet another example (hundreds more to come, for sure) of underpayment leading to corruption.  While I would never say that corruption is justified--or I'd at least leave that to a separate debate--this linkage is a clear problem.  But there is a related concept:  that of economic rent. 

Economic rent exists when the value of something, a diamond, for example, is much higher than the labor required to acquire it.  Similar rent exists in petroleum, as well as for many other natural resources.  An oil company has a clear incentive to pay a bribe to a government official for rights to an oil field.  What will often be the case is that the revenue from acquiring an oil field will be X, the labor required to acquire the oil will be one fifth of X, .2X, and the resulting profit--RENT--will be .8X.  When X is hundreds of millions or even billions of dollars, it costs next to nothing for a company to throw several millions of dollars at a government official if that will secure these rents.

This is relevant and related in that the difference between the value of the commodity and the cost of the commodity is too great.  Similarly, the value or power of an official's job compared to his/her actual compensation, if too great, will often lead to corruption, as described in the previous blog and much more to come.  In both cases, the closer the value can get to the price, the less corruption there will be.  In the myriad cases where this is impossible, adequate regulation combined with vigilant public scrutiny will be necessary. 

Yesterday's CorruptionDaily pick of the day highlighted Ethiopia's new tactic for fighting corruption. This system of registering all official income could do wonders for fighting both sides of the corruption coin.

From India

I just didn't know how lucky I was, growing up in a country that really isn't that corrupt.  You can say what you will about Chicago politics and the like, but you haven't seen anything until you go to a place where corruption is almost synonymous with official interaction.  It's not even that cops and other officials are necessarily bad people.  Often, it's too much of a hassle for them to fill out the paperwork for a Rs1000 traffic ticket.  Instead they'd much rather collect a Rs500 bribe and call it a day.  My friend Kethaki's mom was initially refused a ticket and pleaded with for a simple bribe instead.  After staunchly refusing to pay the bribe, her license was confiscated, and she was forced to go home, get someone to drive her to the police station, fill out forms, and then pay the ticket just to get her license back.  To quote her brother, "Anything can be obtained with a bribe.  Test scores, college admission, a passport."  What's worse is that many things, specifically involving official documents and bureaucrats, cannot be achieved without a bribe.

The general consensus of those with whom I talked is that these officials, policemen most importantly, are simply not paid enough.  A private security guard at a gate is paid around $120 a month.  A police officer is likely paid less than twice that.  A single bribe a day can more than double an officer's salary.  Knowing this, it can't be too surprising that people fear the police intervening even when they are struck from behind in a car.  One friend told me that when this happened, the guilty party took the present police officer aside, and after an exchange (of more than just words), the victim of the crash became the culprits.

Police are meant to protect a society.  We give them the power and authority to do that.  And they are going to get paid...one way or another.


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