Browsing articles in "Foreign Aid"
Oct 1, 2012
PEstrada

The Caucasian Candidates

Today Georgia holds parliamentary elections. Actually just two political parties are competing for the 150 seats in dispute. The United National Movement (UNM) is the party of the current President, Mikheil Saakachmilli. It controls the Parliament with 130 places in its favor and with David Bakradge, head of the party, as its President. The challenger is the coalition Georgian Dream, commanded by Bidzina Ivanichvili, a multimillionaire and philanthropist. This electoral contest is an example of a more or less recent trend in campaign making, where the strategy to defeat the opponent relies on accusations to demonstrate that he or she is just unsuitable to lead the country rather than the contrast of policy options or proposed government programs.

Indeed, the Georgian election and Ivanichvili’s profile in particular offer fertile ground for “personality attacks”. He has an estimated fortune of 6.4 billion dollars. He and his campaign advisors have tried to make his personal story a good point for him. He was born in the small village of Tchorvika, in an impoverished workers region. However, due to a constant dedication to studies and to the necessary job to pay for them, he obtained a degree in Engineering and Economics at the Tbilisi State University. Afterwards, he moved to Moscow to continue his graduate studies at the Moscow Science and Research Institute of Labor. In the meantime, still in Russia, he began to sell computers and telephones and later opened a bank, the Rossyiski Kredit, which became one of the most successful financial institutions in the country. In 2003, he returned to Georgia and, in the midst of the Revolution of Roses (a large set of protests in the aftermath of the perceived fraudulent parliamentary elections of 2003, ending in the resignation of the President), he boosted his philanthropic activities by building university buildings, theatres, financing artistic and scientific projects, and even, allegedly, some major reforms like those of the Georgian police forces and the Army. So far, a classic tale of the man with humble origins turning into the wealthiest person in his country just by the means of incessant effort.

For the UNM the main problem, if not actually the only one, resides in one element of the story: Russia. In an interview with the French newspaper Le Monde summoned by himself, Bakradge has pointed out Ivanichvili’s links with that country. Just before the whole electoral process began, Ivanichvili sold his entire business properties in Russia, noticeably the Rossyiski Kredit bank (352 million dollars), Unicor estate society (982 million dollars), and the pharmaceutical chain Doktor Stoletov (70 million dollars). Bakradge questions the unusual conditions which allowed for such a rapid and favorable set of transactions. Even more, he argues that Ivanichvili cannot be trusted as a Prime Minister (the position he would have if the Georgian Dream party wins the election) because during his time in Russia his links with public officers allowed him to build his fortune using public resources and later this same networked proved more profitable during the privatization phase of the perestroika. Out of this, Bakradge suggests Ivanichvili’s position on key issues with Russia is at best ambiguous given the potential conflict of interests. A sensitive item in the agenda is what to do (keep pressing or yield) with the Russian occupation of South Ossetia and Abkhazia after the 2008 war. Bakradge comments that having had a large set of his assets there, and that being the birthplace of his fortune, Ivanichvili wants to keep friendly and close ties with Russia, “a country he has never criticized”.

On the contrary, Bakradge shows the good points of continuity with the UNM, especially the adhesion to NATO and the strengthening of relations with the countries of the European Union, which could be fostered by the development Georgia enjoys now. Thus, everything unpleasant with the campaign (mainly the strong polarization noticed in practically all international news agencies), under Bakradge view is Ivanichvili’s fault.

However, there is a large fear of fraud in the elections (an echo of the 2008 contest, where the opposition even boycotted it) and stories of government intimidation of citizens after earlier in September revelations were made about the torture and rape of prison inmates. There are accusations against the government indicating that the money it has received from the United States as development assistance has been selectively used. Certainly Georgia is not on the brink of becoming a failed state anymore, with all kinds of criminals challenging the government’s authority, but the gap between cities, particularly Tbilisi, and the rural areas is widening.

Speaking of the US presidential election, a reporter from the New York Times mentioned that Mitt Romney had a double job: to convince the people of firing Barack Obama and hiring him instead, with the former point making some people think about the sense of their vote but the latter sounding not so attractive. The campaigns in Georgia seem to have focused just on the negative side: do not hire the Georgian Dream or fire the UNM. I am not sure if this kind of campaigning is adequate or useful for the society, where no programs to improve the public sphere are discussed and the debates rely on the candidates’ private biographies. Nonetheless, when being posed a direct question, Bakradge refused to call Ivanichvili the Troy Horse of Russia. And there is a large agreement amongst international observers that notwithstanding the fear of fraud, the elections will be clean. Without a question that can strengthen the democracy of the country. We will have to wait until tomorrow to see if it did.

Other
Sep 28, 2012
Center for Democracy and Civil Society

Venezuela goes to the polls

  I had coffee the other day with a former top White House adviser to talk about, among other things, upcoming elections in Venezuela (scheduled for October 7th) and how the US views them. I was not surprised to see him answer in generic terms (you can take the man out of the White House…), but it was interesting to see that he chose to mention two things: first, that it would have been better to have election monitors there sooner; and second, that it will be an interesting test to see how the region responds to the results.

In terms of election observation, basically there isn’t any. Well, not really. There will be some groups “accompanying” the procedures, the main one being Unasur. Groups that insisted on observation ended up not being invited or declining the invitation due to the limitations imposed by the electoral authorities. One of those groups is the Carter Center.

In a press release, they said  that “the concept of accompaniment differs from observation in that the purpose of accompaniment is to invite foreign individuals to witness the day of the election with a largely symbolic political presence, while the purpose of observation is to invite international organizations to comprehensively assess an electoral process to enhance the integrity of the voting process, contribute to voter confidence, and inform the international community and domestic stakeholders.”

My impression is that the problem here is not with blatant electoral fraud. Carter himself has said that the system is very safe. They use electronic voting machines, like in Brazil –I know that Americans tend to be weary of those, but they are actually secure.  There is a better chance of a more administrative type of malfeasance. It is the difference, for example, between stuffing polls with fraudulent ballots and institutionalizing certain rules for candidate registration that benefits the party in power. But even that is considered a marginal problem by experts I spoke with. The real problem is the unbalance in the campaign. Chavez has spent 97 hours since January in national broadcasts. He uses the entire state to campaign. The opposition can’t compete with that machine. That is the kind of thing that can only be properly analyzed by a good and long observation.

In terms of how the region will react to the results, it is indeed interesting to see what people are talking about right now. In Brazil, for example, a high government official told a colleague of mine that, at first, they were worried that Chavez would win again. Now, however, they are desperately hoping that he wins, and wins big. Not because they think it will be the best thing for Venezuela (although that official in particular believes he is), but because of the potential destabilizing effects of an eventual defeat. Chavez has been in power for 14 years; there are many groups interested in continuity, including the military. If the results are too close, Chavez or another interested party could contest the elections and not leave power, giving Brazilians a big headache.

There are also international issues to consider. Cuba, for example, will quickly go (even more) bankrupt in the absence of Venezuelan help. They count on subsidized oil (100,000 barrils/day) and US$ 6 billion a year in exchange for Cuban military and health services in Venezuela.

Colombia has a complicated relationship with the neighbor, but Chavez is a mediator in the negotiations with the Farc. That role would not be occupied by his challenger, Henrique Capriles.

The Obama administration reduced friction with Venezuela, but it still has no ambassador in the country, and a Capriles government would most likely improve the business environment for American companies.  But it also might share Brazilians concerns for the rebalancing of regional forces.

Israel is one country who would unmistakably love to see the end of the Chavez era. Chavez forged a conspicuous alliance with Mahmoud Ahmadinejad, and  Venezuela is Iran’s biggest supporter in the Western Hemisphere today. Oh, and Capriles has jewish heritage.

In case there are tensions post-elections, an additional problem will be that the Inter-American System  is falling apart. But that is a topic for the  next post.

Sep 20, 2012
Center for Democracy and Civil Society

Russia Says Goodbye to a Slice of the American Pie

If you're sure...

In Vladimir Putin’s most recent show of strength (the previous being his flight with endangered Siberian cranes), he has unceremoniously kicked USAID out of Russia. On Tuesday, the US State Department announced the notification from the Kremlin that USAID operations were to be concluded by October 1. While the USAID Russia program page has not been updated to reflect this imminent status change, officials within the organization and outside have interpreted the relatively short time frame as a slap in the face. Since 1992, USAID projects have covered health, human rights, civil society, and environmental issues in Russia and the quick withdrawal of almost $50 million in funding will have serious repercussions for a number of Russian NGOs that have come to rely heavily on the US to operate.

While the time frame for USAID’s Russian office dismantling is short and, to some, this announcement seemed abrupt, it is not too surprising that this would be one of Putin’s next steps in limiting foreign, specifically US supported, programs and perceived influence in the country. In March 2012, the New York Times ran an article describing the work of the Obama administration to get $50 million (money accrued from a foreign aid program that reinvested tax dollars in post-Soviet states and actually made a profit, designated in part to the promotion of democracy and civil society in Russia) in stalled aid moving again. These efforts, thwarted for years, continued as such with Putin declaring resistance to US aid as a tool to meddle in Russian domestic affairs. In July, Putin signed a law that mandates all foreign-funded non-government groups involved in political activity to register as “foreign agents,” with a difficult registration process and all the negative connotations of such “agents” implied. Most recently, the protests revolving around the arrests and sentencing of three members of Pussy Riot, the Russian punk rock band who performed protest songs on the altar of the central Orthodox cathedral in Moscow, have unsurprisingly fueled the President’s desire to squelch the unrest in Moscow’s streets and undermine any foreign influences believed to be stoking the fires.

This most recent act of Russian self-affirmation, coming on the heels of its accession to the World Trade Organization in August, can and should be seen as just that. The country hopes to become a giver of aid, not a receiver. This attempted shift can also be seen in its announcement to forgive a significant portion of North Korea’s accumulated debt, with other motivations obviously also at play.

But what does this mean for the Russian people who were working for NGOs funded, at least in part, by USAID and for those who benefited from these programs? Funding cuts will certainly terminate many programs, or stall operations until other methods of funding are discovered. Organizations like Golos, Russia’s only independent election monitoring organization that was key in exposing voter fraud in December’s election, will suffer significant setbacks. Though the Obama administration has stated that it will continue to support democracy and human rights programs in the country, it will be doing so via an endowment to a vaguely mentioned private fund established under Russian law. No telling how long something like that will take to actually materialize. Also important to note, however, is not just the loss in funding to these organizations, but also one of the important messages being sent to the world. As Yelena Panfilova, the head of the Moscow branch of Transparency International explained, Russia is now in the ranks with the other countries who have taken similar actions in the past including Venezuela, Somalia, and Belarus (running with the wrong crowd, as any good mother would say).

It is difficult to predict just how long these steps towards complete insulation from foreign actors deemed meddlers will continue, but it seems that Putin might have made a bit of a mistake here. Cutting off US funding to Russia’s domestic NGOs and making it more difficult for foreign countries to establish or maintain NGOs there, means a tightening in the number and the scope of NGO actors, clearly a current goal of the Kremlin. These restrictions, however, limit the more formal, structured, and arguably more peaceful means for Russian citizens to exercise their feelings of opposition. As the protests in Moscow continue, and in fact grow, it seems that the lack of these structures could prove more problematic for Putin and his attempts at a consolidation of power, not less.

Sep 9, 2012
Center for Democracy and Civil Society

The UN in Mozambique – time for change

This blog got its hand on a working paper that is being widely circulated in UN circles in New York about the need for a repositioning of the organization in Mozambique after a loss of influence since the early 2000’s. It suggests that the new Mozambican socioeconomic reality opens for the UN an opportunity (not to mention a necessity) to take on a fresh normative leadership role. It is implicit here what we may call an inability of the UN to keep up with changes and evolve from a role of great importance and impact in Mozambique after the civil war to a relevant one in the current context of fast growth, new mineral wealth and great inequality, combined with rapidly changing patterns of foreign direct investment (FDI) and aid.

Not only does the paper offer a great discussion of the adequacy of the UN’s present impact in Mozambique, but it also has an extra advantage: it aggregates important data on all of the variables mentioned above, from historical charts on FDI to the percentage of investment that is tied to the booming extractive industries (an incredible 84%). I met the author, Alejandra Bujones, in Maputo, and I witnessed her efforts to obtain accurate information that was generally not readily available. For that alone her paper is extremely valuable for those interested in Mozambique.

Extractive industries receive 84% of FDI in Mozambique

The paper, which was commissioned by experts Bruce Jenks and Bruce Jones as part of their major study called “UN Development at a Crossroad”, hasn’t been published yet, so it cannot be made available at this point, but I can’t help presenting a tidbit of the information she gathered:

-“Prospects of foreign investment in Mozambique during the 10 years from 2010-2020 are valued at close to US$90bn (…), equivalent to seven times the country’s current total GDP of US$12.4bn.” 84% goes to extractive industries, 6% to manufacturing and only 4% to communications and transport (which, as I witnessed during my road trips there, are in great need of refurbishing).

-The top FDI investors in Mozambique in 2011 were: Brazil (US$ 908 million, nearly double the amount of the second largest investor), Mauritius, Ireland, South Africa, Switzerland, Portugal, UAE, UK, USA, Vietnam. So where is China? Their investments actually come in the form of credit, and it doesn’t show in FDI data. Beijing lent in 2011 US$ 82.2 million, according to data obtained from Bank of Mozambique Balance of Payment 2011 report.

Aid flows have been “decreasing continually from 56% of the country’s budget in 2008 to 44% in 2010 to 39.6% in 2012. The majority of ODA received by Mozambique is either delivered through project or direct budgetary support. (…) The UN’s share of total ODA makes up only a small fraction of this”.

- “NGOs receive only 4% of UN’s programmatic funds in Mozambique (the bulk goes to the government)”.

It is easy to see that results from aid in regards to growth and social indicators have been mixed, as the stagnate progress of human development shows. In what pertains to the UN, Bujones points out an important challenge to the ability of the organization to provide aid: in the past decade donors preferred to channel resources through direct government budget support instead of through the organization’s system. The UN had then fewer and fewer resources at its disposal and, to make matters worse, it tended to spread them around “a number of remotely connected initiatives.” Thus, it lost influence both with donors and with the Government of Mozambique, and the general perception was that the UN lacked a clear and coherent strategy for the country.

In a well-intentioned attempt to act in a united effort, the UN in Mozambique tested the “Delivering as One” initiative. It was, according to Bujones, an important first step with good impacts on efficiency and economic gains. However, it meant that the country offices had to focus on internal procedures for a while, leading stakeholders to believe: “that the UN has spent too much time focusing inwards, rather than looking outwards; that projects and programs are not sufficiently cross-linked to explicitly draw upon each other and add value; that programs continue to be too disparate, lacking strategic focus; that, with the exception of some UN agencies that have a clear and visible mandate, nobody really knows what the UN is doing where; and together these factors hamper the ability of the UN to provide leadership and substantive policy input in Mozambique.”

Another problem was that the UN in Mozambique was perceived as unable to mediate effectively between government, civil society and private sector. Even the national government, although it has been the greatest recipient of UN funds and efforts,  “feels that “the UN’s project spread—especially its involvement in small-scale project implementation—is a distraction that takes it away from focusing on large-scale project management and strategic support at a higher policy and coordination level.”

To summarize it: no one is happy with the status quo.

Bujones lays out in the paper several suggestions for the UN to regain the important role it played in Mozambique in the aftermath of its 16 year civil war. First, she says the agencies have to move away from the inward approach. Second, they need to gravitate from “downstream direct service delivery programs” towards serving as “a catalyst to provide technical input and upstream advice to develop policy”. And, in general, the UN in Mozambique must “use its normative agenda to serve the whole of the Mozambican State (government, civil society, private sector, media) in areas where the interests of the State clash with the interests of the Government”, such as on how to best manage its new extractives revenues.

There is certainly great demand for the changes she proposes. As says Bujones in her final remarks: Both civil society and small private sector companies (…) are keen for the UN to intervene, either directly or by empowering Civil Society Organizations and Private Sector to participate in such discussions, in order to exert influence on the government and the multinationals to promote good governance, transparency and accountability.

I couldn’t have said it better.

Jul 30, 2012
Center for Democracy and Civil Society

Turning the Page on Piracy in Eyl

The Eyl town of Daawad

Tucked within a rocky valley on the eastern shore of Somalia, approximately 220 kilometers from Puntland’s capitol, Garowe, the sister towns of Bedey and Daawad — together part of Eyl District — are two of the more underdeveloped areas in Puntland State. The coastal community of roughly 200 households has experienced little economic growth over the past two decades, having endured the consequences of remote and rugged geography, poor infrastructure, limited access to education, and instability caused by the local piracy movement that not only drained the town of a large number of young men, but scuttled its reputation among the international community.

The Eyl District Council, which governs Bedey and Daawad as well as the surrounding district of 100,000 people, has taken steps to address some of these challenges in recent years. Council members have solicited international support to modernize the unpaved road leading from Eyl to other population centers to the west and north. Construction will begin in the next few months. The current single-lane road — a mix of dirt, sand, and rock — compounds Eyl’s relative isolation by dramatically increasing travel time and limiting opportunities for trade and commerce. The fishing industry, Eyl’s largest source of livelihood, is particularly dependent upon reliable and expedient access to outside markets, without which opportunities for sector growth are slim. International trade to Gulf countries via the Indian Ocean is often the most viable alternative market for Eyl fishermen, although rough water conditions and the threat of off-shore piracy have made this route hazardous as well — not only due to armed criminals, but also anti-piracy vessels that may mistake innocent fishermen for Somalis with more nefarious intentions.

Yet the impact of the piracy movement extends well beyond the fishing sector. Starting over a decade ago, outside actors offering financial reward for criminal behavior — in the form of seizing boats and taking hostages — attracted many young Eyl men away from productive trades and toward dangerous and unstable lifestyles. Some were subsequently killed, leaving behind families with few means of financial support. Others were imprisoned. Many incurred large debts with local businesses around town, using piracy as both leverage and collateral, then often defaulting due to imprisonment, death, or simple bad luck on the open seas. These businesses suffered financial hardship as a result.

Piracy has a complicated history in Somalia. What began as a homegrown movement to protect off-shore resources (particularly fish populations within Somalia’s territorial waters) from excessive exploitation by other countries and international corporations, metastasized into a lucrative criminal enterprise that shirked its founding purpose for expedient economic gain. Pirates quickly discovered that they could collect large sums of money for their trade. The movement thus became less about economic justice and more about simple financial benefit, with many young Somalis preferring the high-risk, high-reward lifestyle to the stagnant grind of daily life in Eyl.

In recent years, however, piracy has waned in both influence and its level of community support. The Puntland government, with international backing, successfully engaged the Eyl community in an anti-piracy campaign designed to wield the influence of religious leaders, elders, businesses, and families to provide a united front against the piracy movement. Traditional and religious leaders used their moral authority to convince businesses to reject money of pirate origin, whether from the individual pirate himself or his family. And these families, under the strain of financial blacklists and weary of the violence and instability wrought by piracy, began to withdraw their support for the movement as well. Slowly, as the town became increasingly inhospitable to this form of criminal enterprise, pirates and their leaders began moving their operations elsewhere.

Small fishing boats along the beach in Bedey

Today, despite these mild successes, Eyl continues to stand in a vulnerable position. Although piracy has decreased through the community’s coordinated campaign, the region has not yet seen a corresponding rise in economic growth or opportunity. Fishermen lack the resources to construct durable boats to withstand the rough seas, and the community does not have sufficient refrigeration capacity to preserve the fish for shipment along the long route inland toward Garowe and other population centers. The town continues to need modernized infrastructure, primarily in the form of a permanent and paved road to facilitate a more cost-effective commute to and from the town. Farmers require metal wire to fence in land for a more productive use of livestock. Female small-shop owners, eager to expand their enterprises but lacking the wherewithal to do so, are in need of additional capital and business training. And youth, often with limited education and few employment opportunities, require enterprise skill training to improve their economic prospects and stimulate a broader entrepreneurial spirit. With few resources and little support from either the Puntland government or the Transitional Federal Government in Mogadishu, the district government does not have the capacity to address these issues on its own.

All of these factors, when considered together, demand an increased level of engagement by development organizations to avoid a situation where piracy and organized criminal groups once again take root, exploiting and preying upon an economically vulnerable and geographically isolated community. Road construction is a good start, but needs to be accompanied by investment in the fishing sector to improve capacity for trade and build economic relationships with towns inland from the coast. Without creating expanded markets for Eyl products, it is difficult to envision sustainable growth. These goods, for example, could be connected to new commercial markets that are being developed in Garowe and neighboring towns, which would create new opportunities for profit within the supply chain to go along with added consumer demand.

Although Puntland is undergoing a democratic transition, sometimes the biggest challenges remain the most basic: creating sustainable livelihoods, and buffering insecure communities against organized crime and those who prey upon societies with weak governance. Long-term, Eyl’s economic prospects might rely somewhat upon the Puntland government’s ability to develop better policies for resource-sharing and inclusive political representation. But one hopes that Eyl might be able to find some solutions in the short-term as well, for a higher order of living and a further reduction in a pirate movement that continues to harm both Somalis and the international community.

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Founded in 2004, Democracy and Society is a biannual print journal published by the Center for Democracy and Civil Society at Georgetown University. The D&S Blog provides web-only content, including special reports and investigative series, on issues relating to democracy and development.

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