Author Archives: Oscar Abello

Millions of alternative endings – the CIPE Youth Essay Contest 2011

Sometimes global development stories just never seem to end. CIPE’s 2011 International Youth Essay Contest is calling for stories that do.

When it comes to corruption, democracy activists often call for wrongdoers to be put behind bars. But putting people behind bars has never been a strong deterrent to future human rights violators. In fact, oftentimes the justification given for imprisoning or harming political enemies are accusations of previous human rights violations. Sometimes there’s a trial put on just for show, even though everyone knows the underlying reasons for imprisoning a political adversary. Sooner or later the imprisoned person gets out, or is let out thanks to international pressure, wins an election and does the same to those who imprisoned him. It just never ends.

CIPE wants to hear about solutions, not the same old story. Holding people responsible for wrongdoing is important, but not a solution. Put one person behind bars, and another steps into his place and faces the same opportunities and incentives. Do youth have a vision to start reducing those opportunities and incentives?

Another same old story is that of development assistance. On one hand the world is mostly off pace to reach the Millennium Development Goals for reducing poverty and improving quality of life in developing countries, giving many development advocates reason to demand more resources be allocated to their causes and more thoughtfulness devoted to the way in which they use resources. On the other hand, development critics insist that development assistance perpetuates donor-driven governments rather than democratic governments that respond directly to the everyday needs of their people and businesses.

While that battle rages on in the elite circles of Washington D.C., New York, London and elsewhere, CIPE wants to hear about what youth can do or are doing in their communities around the world to strengthen local ownership of development initiatives and even support development with local resources instead of resources from abroad. What can youth do to help make development assistance lead to sustainable, long-lasting change?

Another story is just beginning – that of the role of youth in new and emerging democracies. In the past year or so, popular movements for democratic government emerged in the Middle East and North Africa; an anti-corruption movement emerged in India, the world’s largest democracy, fueled in part by technology and punctuated by the high-profile protest fasting of Anna Hazare; and Southern Sudan became the world’s newest country after voting to secede from Sudan proper.

In each of those places and beyond, younger generations have played key roles in sparking change, but what about following through? How can youth organize to increase their presence in policy debates moving forward? Are current political or civil society organizations doing enough to reach out to youth? Is it more important for youth to create their own organizations? How can youth use mobile or online technology to strengthen their political presence?

The answers millions of youth around the world have to those questions, hopefully, can ensure that youth powering movements for democracy followed by youth marginalization does not become another never-ending story.

Eighty-seven days remain to put those answers in writing.

“Resurrecting Eden”

Last Sunday on 60 Minutes, anchor Scott Pelley took viewers back with him to 2009 when he visited the region of Iraq that many biblical scholars say inspired the stories of creation and the Garden of Eden. In Pelley’s words, it was a place Saddam Hussein deployed his greatest weapons of mass destruction – six giant canals that diverted 90 percent of the water from the former lush marshlands. It is a place where people and businesses are returning to restore their lives and livelihoods.

As profiled in the 60 Minutes story, Azzam Alwash and his family were one of the many that returned to the marshes, though in Alwash’s case he returned after 25 years in America where he went to college to become an engineer. His business happens to be to restore the marshes to their former glory. He returned in 2003, after U.S. forces had removed Saddam Hussein from power, and since then his company has helped restore 50 percent of the marshes.

Life in the marshes revolves around the reeds. Families build their homes with them, feed them to their livestock, and even expand their islands with reed mats that catch sediment. Pelley and Alwash come across a reed market on their tour through the marshes, the kind of market that had operated in the area for millennia before Saddam Hussein turned the marshes to dust. As these markets return, how the new Iraqi democracy will interact with them and with all small or unregistered businesses remains a major question mark.

According to CIPE’s recent survey of 900 Iraqi businesses across nine cities, including registered and unregistered businesses, perceptions of Iraqi administrative officials lean toward skeptical or even cynical, though overall business sentiment remains optimistic.

If you’re only looking at headlines or stock footage of foreign troops leaving and Iraqi security forces struggling to take over, that optimism may seem strange.

If you’re down in the would-be Garden of Eden, that optimism seems well-placed.

For full results from the survey, RSVP here to attend this Thursday’s launch event from 2:30-4:00 p.m. on Capitol Hill, or follow along on Twitter as CIPE live tweets the event using hashtag #IraqBizViews.

Eat your chocolate and strengthen democracy too

(Photo: Sarah Gerrity/Sweetsonian.com)

Conflict chocolate is nothing new. West African countries produce seventy percent of raw cocoa worldwide, led by conflict-ridden Cote d’Ivoire and its 1.3 million tons of annual production. But new efforts to curb illicit flows of cash could be the first steps toward limiting the ability to support violent conflict with funds from trading in valuable commodities such as cocoa.

A 2007 Global Witness Report illuminated the primary structures used to siphon off cocoa trade revenues to fund violent conflict in Cote d’Ivoire. Besides paying for more guns and bullets, the abuse of these funds also means fewer dollars going to cocoa farmers and less trust in public institutions.

According to that report, the national Cocoa and Financial institutions created under former President Laurent Gbagbo to centralize cocoa sales and exports offered $20.3 million in direct support for war efforts on top of export revenues that Gbagbo’s Government tapped for $38.5 million more in arms purchases between 2004 and 2007; meanwhile the opposition Forces Nouvelles movement simply seized control of cocoa export tax revenues over part of the country’s cocoa producing region, bringing them $30 million between 2004 and 2007.

Plenty of those dollars are just a few degrees of separation from the wallets of consumers in the United States and Europe. But there’s a bigger picture here than the consequences of self-indulgence.

While Global Witness and its supporters aimed to convince the global cocoa industry to be more transparent and to avoid funding conflict through its raw cocoa purchasing, the report did not address the issue of how governments and opposition movements manage to store and exchange such large sums of money for purchasing large volumes of small arms on the black (and gray) market.

As financial systems have become increasingly globalized and the technology to manage them has shrunken to the point where you can fit gigabytes upon gigabytes of data onto servers into a closet with an internet connection, it has never been easier to store and exchange money safely and in large volumes.

Such ease has been a powerful force for extending greater global economic opportunity to an unprecedented percentage of world population. Unfortunately, some of that opportunity has been in illicit trading of small arms – along with drugs, endangered animal species, counterfeit goods, and human beings, all vividly documented in Moises Naim’s Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy.

Washington, D.C.-based Global Financial Integrity (GFI) has emerged over the past few years as the leading voice on the topic of illicit financial flows – the use of tax havens, legal loopholes, transfer mis-pricing, secret bank accounts and other tools to store and transfer large volumes of money. The vast majority of illicit financial flows comes from multinational corporations trying to reduce or eliminate tax obligations in developing country jurisdictions with typically low tax collection infrastructure. But governments, opposition movements, criminals and violent outfits of all types use many of the same tools to store stolen or siphoned funds and to pay small arms dealers. It’s much safer than carrying briefcases full of cash around war zones.

GFI is the lead member of the Task Force on Financial Integrity & Economic Development, a global coalition of civil society organizations and over 50 governments working together to reduce illicit financial flows and raise awareness of their effects–perpetuating armed conflict, hobbling economies, and eroding democratic governance in places like Cote d’Ivoire, to list a few. The World Bank and the International Monetary Fund recently announced their own internal efforts targeting illicit financial flows in one form or another. If successful, these efforts alongside countries coordinating on financial transparency across borders would help to curb or even eliminate the ability to store and transfer funds for destructive purposes.

By promoting financial transparency, you can eat your chocolate and help strengthen peace, prosperity, and democracy too.

Research in motion for women’s property rights

Strengthening property rights in rural Uganda is tough enough with the country ranked 150 out of 183 on the World Bank’s Doing Business Indicators for Registering Property. Now try strengthening property rights for women in Uganda, the kind of place where women typically don’t receive child custody in cases of divorce.

That’s just what the International Center for Research on Women (ICRW) did in a pilot project the results of which they presented yesterday at ICRW’s Washington, D.C. headquarters.

ICRW Economists Krista Jacobs and Meredith Saggers began the presentation with an overview of the earlier Gender Land & Asset Survey (GLAS) that provided a foundation for ICRW’s pilot program to advance women’s property rights in Uganda. Covering land, housing, material goods, and livestock, the survey defined asset rights broadly as perceived ownership, documentation, and the extent to which one could influence decision-making regarding the asset.

The survey also covered usage of assets, which turned out some interesting insights. While there was little to no gap in usage of assets, there is a huge gap in favor of men when it comes to perceived ownership and ultimate decision-making.

But perhaps the most interesting insights from the survey came from dis-aggregating the data between male-headed households and female-headed households. For example, in rural Ugandan male-headed households 19 percent of women perceived joint-ownership of the home while only 3 percent of men in the same households perceived joint-ownership. On a more hopeful note, the gender gap in perceived ownership and control closes almost completely in female-headed households–though Jacobs noted later it was possible that the survey only reached the most successful and powerful female-headed households while the vast majority may tell a different story.

The survey also asked about factors affecting the strength of different asset rights for men versus women. While married women perceived weaker asset rights when it came to land and livestock, they did feel more secure in material property rights–items like tools and machinery for farming or cooking, transportation assets, and -of special significance- communications assets like mobile phones.

To put research in motion, the primary cue taken from the GLAS survey was that there was stark lack of awareness of property laws as they existed on the books. Thirty-seven percent of women in the Uganda survey didn’t have any idea which of Uganda’s multiple sanctioned land-tenure systems applied to their family’s land–even though recent laws passed do grant women greater access to and control of assets. The pilot project to strengthen women’s property rights in Uganda thus revolved around partnering with the Uganda Land Alliance (ULA) to train community-based rights workers from the Luwero Land Rights Activists Association in basic gender equity and property rights issues.

Community-based rights workers were community-selected volunteers, men and women, and rather than the impossible task of training them in just a matter of days to become experts in gender and property rights, ICRW and ULA trained them to serve more as resource hubs. Armed with basic knowledge of property rights and responsibilities as prescribed by law, they consulted with trusted experts, local leaders and institutions as well as each other as a network, and in so doing served as alternate dispute mechanisms in lieu of corrupt and dysfunctional courts.

As the ultimate source of solutions came down to enforcing the laws as they exist, in the author’s opinion these community-based rights workers were doing more than defending the rights of women to own and control assets; they were also helping more broadly to strengthen the rule of law.

ICRW foresees the information and networks that come out of the pilot project in Uganda will help advocacy efforts for further reform on property rights and other issues, Jacobs said. In particular she noted that laws and customs around joint-ownership in Uganda require further study, with an eye toward reform down the road to strengthen property rights for women. There are plenty of other laws currently or pending deliberation that could weaken or strengthen women’s asset rights, she added.

Depending on where you are and who is your target audience, property rights can be a source of hope or a source of great consternation. ICRW’s research and work on this issue as presented yesterday shined a light on the economic, social, legal, and political complexity around property rights that is fascinating no matter where you might fall on that spectrum.

Human agency? There’s no app for that

American folk music legend Woodie Guthrie and his famous guitar. (Photo: Flickr user aeryn42)

It was something of a week for information and communications technology (ICT), democracy, and development.

Last Tuesday, the Wall Street Journal‘s Corruption Currents blog featured Bribespot, a new mobile phone app that allows users to check-in anonymously anytime someone forces them to pay a bribe, including information on location, size of the bribe, and description of the event including who was paid and for what purpose.

Bribespot is just the latest in a procession of ICT-based anti-corruption tools. IPaidABribe.com launched last year as a place for citizens in India to anonymously report when, where, and how much they pay for a bribe.

It’s certainly revealing for information about bribes to finally appear on such widely-accessible platforms. In countries like India or regions like sub-Saharan Africa petty corruption is ubiquitous yet victims have typically been isolated by geography or by custom. These new platforms unite what has long been divided. That’s a good start.

But also last Tuesday, an Aid Watchers guest post from George Mason University’s Tate Watkins titled “Poverty: Is there an app for that?” warned that new technology, while it can be very useful for solving problems directly, can also distract from the reality of development that comprises the ‘gradual emergence of problem-solving systems’. Systemic change still depends on people coming together and transforming knowledge into power, and power into change. ICT is a powerful machine, but someone still needs to pick it up and play the music.

In Leadership and the New Science, management consultant and Harvard Ph.D. Margaret Wheatley envisions organizations and systems as bodies formed around knowledge and information. The introduction or production of new knowledge or information–such as information from new ICT avenues–creates the opportunity to form new organizations and systems, but taking advantage of those opportunities is far from a given. There is no app for human agency.

From the archives – The silenced majority

Editors’ note: In anticipation of Democracy that Delivers for Women: An international conference on women’s empowerment taking place June 20-21 this year, the CIPE Development Blog is reaching back into its archives for posts tagged ‘women’.

An estimated 16 million South Africans lack an operating water supply at home, and have to walk an average of one kilometer to the nearest water source. Given the average South African household is five people, that’s 3.2 million households. One household member, almost always a female, typically makes two trips daily – that’s four kilometers walked a day. Give or take a busy day at the water source, it takes about an hour to make the trip. 6.4 million trips equals 12.8 million kilometers walked, and 6.4 million hours of fetching water – which is usually of suspect quality. You’ll find similar situations for women across the developing world.

They’re expected to bear the brunt of household work even in Bangladesh, where the Bangladesh Women’s Chamber of Commerce and Industry (a CIPE Partner) grew from 24 founding members in 2001, to over 1,500 in 2008. As women in Bangladesh and elsewhere gain monetary wealth and economic power, they remain time-poor because of their dual roles in the home; and they remain politically poor because political systems have always and everywhere favored men over women. Women in the U.S. celebrate this week only the 88th anniversary of the 19th Amendment’s Ratification, guaranteeing their right to vote.

In the history of political systems, that’s a blink of an eye.

When democracies only have to account for less than half the population (in most countries women outnumber men), they only need to appeal to less than a quarter of voters. That doesn’t sound very democratic, but for most of democracy’s history around the world, that was reality; and today the world still suffers the consequences of such an illiberal practice – the lawfully silenced majority of people around the world, women.

The recent history of universal suffrage has produced more than enough evidence that as women go, prosperity goes. As this article from this week’s Christian Science Monitor notes, the more knowledge, power, and freedom women have, the better off everyone in any economy becomes.

Universal suffrage has made great strides, but democratic institutions around the world still retain old biases; especially when it comes to education, healthcare, and property rights. In the words of one woman, Fannie Lou Hamer, we’re not where we ought to be; we’re not where we’re going; but I’m sure glad we’re not where we were.

Original post.

Can microfinance ignite a good governance epidemic?

Afghan people walk past a Kabul Bank branch in Kabul, September 14, 2010. (Photo: Reuters/Andrew Biraj)

In The Tipping Point, Malcolm Gladwell called them ‘connectors’. The growth of social media has popularized the established marketing term for them: influencers. They’re the highly connected hubs in any network that play a key role in spreading information, ideas, practices, and even diseases. Banks, for example, are economic hubs. If only they took that role more seriously.

This week the Afghan government announced it is dissolving Kabul Bank, the country’s largest and the government’s sole financial services provider, because Kabul Bank executives and board members were using savings deposits as a personal slush fund rather than extending loans and credit on a commercial basis. Kabul Bank officials disbursed $850 million in fraudulent loans to major shareholders and political allies, representing 94 percent of all Kabul Bank lending, The Wall Street Journal reported.

If you think that sounds terrible consider China’s estimated $1.2 trillion loaned to local state-owned enterprises for mostly political rather than commercial purposes. Seeking ways to save, lend and seek investors more efficiently, China’s burgeoning middle class is creating a massive shadow financial sector, according to a recent Financial Times report.

In the United States, the subprime mortgage crisis continues with no end in sight, as banks recently began to unravel the mortgage bundles underlying the asset-backed securities at the heart of the crisis. In order to satisfy court procedures for repossession, banks have been submitting forged materials from factory-style document farms, as reported recently on 60 Minutes.

With such economic hubs at their core, whether in Afghanistan or China or elsewhere, it’s no wonder that corruption – by anyone’s definition – seems so intractable. But the story of banks as economic hubs doesn’t always have to be a tragedy. In the aftermath of the East Asian Financial Crisis in 1997, one financial sub-sector realized the importance of taking their hub status seriously: development finance institutions.

Created after World War II, development finance institutions in East Asia started out as channels for administering reconstruction loans and overseeing project management. Though they’ve since evolved in different ways to fund nascent and growing economic sectors ahead of other investors, development finance institutions remain heavily involved in improving client management and governance.

After the 1997 East Asian Financial Crisis, development finance institutions in East Asia knew that they needed to restore investor confidence and get economies back on the market-oriented growth path that has reduced more poverty than in any other region in the world. Led by the Association of Development Finance Institutions in Asia and the Pacific (ADFIAP), their collective response was to strengthen corporate governance in the region, starting with themselves.

With a collectively-built corporate governance rating system, region-specific training materials and the ADFIAP-housed Institute for Development Financing to support and conduct regular risk management and governance seminars for staff and board members (more info on www.governance-asia.com), development finance institutions got themselves on track to strengthen corporate governance in the region by serving as the standard to which they held their client networks accountable.

After the Andhra Pradesh crisis, its largest to date, can microfinance follow in the footsteps of development finance institutions? Though not inclusive of all microfinance providers, there are about $26.9 billion in deposits and $65 billion in loans on the balance sheets of the 1,933 microfinance institutions reporting to the Microfinance Information Exchange as of writing this post – and those numbers have been growing about 20 percent a year. Microfinance providers are thus emerging as new economic hubs.

By serving as examples of effective corporate governance, microfinance providers could succeed where so many financial institutions have repeatedly failed, and in so doing could ‘infect’ their client and community networks with the ‘disease’ of strong corporate governance. With almost three billion unbanked people still to reach, those are huge potential networks to infect.

Such an epidemic would be good for reducing poverty, as it would serve to attract investment into new and growing businesses. It would be good for financial sectors around the world trying to end the succession of financial scandals and crises. It also would be good for new or struggling democratic states, once more transparent financial sectors within countries take over development financing from international institutions.

If they got their corporate governance act together, microfinance providers could ignite a good governance epidemic. But that’s a big if.

For a deeper look at corporate governance and microfinance, check out “Corporate Governance, Scale, and Financial Inclusion,” by Oscar Abello for CIPE’s Economic Reform Feature Service.