Author Archives: John Morrell

The Path Towards Democracy in Burma

President of Burma U Thein Sein at the US-ASEAN Forum (Photo: The Nation)

In his speech at the July US-ASEAN Business Forum in Siem Reap, Cambodia, U Thein Sein explained that Burma “has embarked on a democratic path” and is “moving toward a new democratic era.” He went on to outline the reform efforts his country is presently undertaking, efforts that give reason for optimism following April’s dramatic electoral victories for Aung San Suu Kyi and the National League for Democracy.

In addition to promises of regular and free elections, increased media freedom, and constructive engagement with leaders of ethnic minorities, President Thein Sein announced plans “to transform [Burma’s] centralized economy into a market-oriented economy.” At this same event, US Secretary of State Hillary Clinton said that President Thein Sein is a leader “who has moved his country such a long distance in such a short period of time.”

Moving forward, a successful and sustainable transition in Burma requires that economic growth be widespread and that economic opportunities arise for more than the well-connected few. However, numerous key institutions that are necessary for the realization of this goal are either weak or completely missing in Burma today.

Paramount among these institutions are private property rights and the rule of law. If these institutions, which are fundamental for the development of a market economy, are not substantively reformed and strengthened in Burma, its economic and democratic transition will prove unsustainable.

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Kaya Natin ‘To—Yes We Can (And Yes We Did!)

On Friday March 30, more than 200 local and central government officials, NGOs, academics and donor representatives met in Manila for the Public Governance Forum of the Institute for Solidarity in Asia (ISA). This CIPE-sponsored event highlighted the remarkable accomplishments in public governance made by cities and central government agencies that are working with ISA.

There are now more than 40 cities across the Philippines, along with several provinces and thirteen central government agencies, that have adopted ISA’s Performance Governance System (PGS). CIPE has worked with ISA since 2004 to develop and promote the PGS as a public governance reform tool in the Philippines.

When a city adopts the PGS – an adaptation of a management evaluation tool developed at Harvard Business School – city officials work with a broad-based community consultative group to design specific public policy goals, an action plan to accomplish them, and performance metrics by which to measure progress. And the results are remarkable.

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Thai Banks Join Anti-Corruption Effort

IOD and Thai Banks Join Hands in the Fight Against Corruption (Photo: The Post Today).

On March 27, nine commercial banks jointly signed the Anti-Corruption Declaration of the Thai Institute of Directors (IOD). This Declaration lays out tangible and specific steps that a company must take to combat corruption on the part of its employees, managers and vendors, and is the unifying document of IOD’s Collective Action Against Corruption campaign.

With CIPE support and technical assistance, IOD has built a private sector coalition of Thailand’s largest businesses and most influential business associations united in their commitment to tackle the supply side of corruption. These nine banks are the latest to join this coalition, and they now take rank with Thai and multinational firms such as PTT, Thai Airways, Siam Cement, the Shin Corporation, Toshiba Thailand, Pfizer Thailand, and Siemens Thailand.

One of the business associations in IOD’s anti-corruption coalition is the Thai Bankers’ Association (TBA), and all nine of the banks that joined on Tuesday are TBA members. There are now 15 Thai banks in IOD’s coalition, representing the full membership of the TBA.

Speaking of the significance of this event, IOD President and CEO Bandid Nijathaworn said “this is a major step [in the fight against corruption] in that this is the first time that all of an association’s member companies are part of the coalition.” The Chairwoman of IOD, Khunying Jada Wattanasiritham, echoed these sentiments by explaining that this campaign is the paramount collective action initiative in Thailand today.

This event attracted considerable media attention, with the Nation – one of the country’s biggest English-language dailies – penning an article lauding the banks for their effort “to prevent and suppress graft.” But this was not a mere photo-op. To join IOD’s anti-corruption coalition, companies must make concrete promises, and concrete steps must be taken to fulfill these promises.

When a company or business association signs IOD’s Anti-Corruption Declaration, they pledge to implement strong anti-bribery policies and anti-corruption controls in their organization. They also pledge to send senior executives and compliance staff to IOD-led anti-corruption training programs. Perhaps most significantly, coalition members must submit to an external verification to certify whether or not they’re actually doing what they promise to do. If they aren’t, they will be removed from the coalition.

This private sector coalition, the members of which all voluntarily stepped forward to take part, is having a tremendous impact onThailand’s fight against corruption. Because corruption distorts markets, denies citizens and businesses the benefits of free competition, and retards economic development, reducing corruption is among Thailand’s paramount development goals.

Moreover, in a country in which rampant corruption has directly and repeatedly contributed to the destabilization of the political process, this anti-corruption initiative of the Thai Institute of Directors is making invaluable contributions to Thailand’s democratic development as well.

Business takes center stage in Thailand’s fight against corruption

Twenty-seven Thai CEOs at the November 2010 signing of the Collective Action Coalition pledge to fight corruption in Thailand, on the eve of the 14th International Anti-Corruption Conference. (Photo: CIPE)

When the military overthrew a democratically elected Thai government in 2006 and when the Supreme Court disbanded a democratically elected government in 2008 – corruption was the principal justification. Corruption has become a part of daily life here – allegations of corruption contribute to the competing claims of Thailand’s color-coded protest groups that successive governments have lacked legitimacy. Uncertainty in the political environment is beginning to affect business; and uncertainty within the business community affects everyone. Businesses have started to come together to fight back.

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Urbanization and Decentralization

During the Cold War, countries throughout the developing world, especially in newly-independent South Asia and Sub-Saharan Africa, implemented socialist and statist economic models. However, as the public institutions in these fledgling nations were ill-equipped to administer state-centric economic structures, the adoption of such governance systems had, in the overwhelming majority of cases, devastating results.

In addition to setting back national economies by several decades, the rapid expansion of central government  power and responsibility brought about the public sector pathologies still felt today, such as corruption, mismanagement and inadequate services. In recent decades, the vast majority of these countries have attempted to reform their economies to rely more on private sector enterprise and capital.

More recently, in an attempt to improve efficiency and service quality, many of these governments initiated decentralization programs wherein the burden of service delivery is shifted to sub-national levels of government. To be effective, decentralization requires increased capability and administrative capacity on the part of local governments. Within the international development community, therefore, there is a growing emphasis on public sector reform and capacity-building, especially at sub-sovereign levels of government.

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Unlocking Economic Potential Through Urbanization

At the start of the 20th century, 1 out of 8 people in the world lived in urban areas, and by the 1950s, it was nearly 1 in 3. Now, it is 1 in 2. In the coming decades, virtually all population growth will be in urban areas. In East Asia, the urban population is expected to increase by about 450 million people over the next two decades, meaning that a city the size of Paris will be added every month.

In South and Central Asia, the increase is expected to be nearly 350 million, and in Sub-Saharan Africa almost 250 million. Yet unlike the industrialized world where urbanization unfolded over many decades (thereby allowing public and private sector institutions to mature gradually), the process in developing nations is far faster and is unfolding against a backdrop of rapid population growth, lower incomes, and fewer opportunities for international migration.

While urbanization is a long-studied concept, it remains poorly understood. For increases in population density give rise to social, environmental and administrative challenges that are easily recognizable, such as public sanitation problems, inadequate supplies of formal housing, traffic congestion and crime. In other words, the “costs of grime, time and crime”.

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