No remittances without representation!

The June 8 news article "In Guatemala, Harris offers stern words on corruption" reported extensively on Vice President Harris's travel to Guatemala, where the United States, by offering financial cooperation, hopes to reduce the flow of illegal migration from Central America and stimulate better behaviors, e.g., less corruption.

Though those financial contributions are indeed important, they are peanuts when compared with the remittances sent home by the migrant workers. The reality is that what the migrant workers from many Central American nations earn abroad is often much more than the gross domestic product of their home countries. The sad reality is that their remittances help to keep in power those ineffective governments that made them immigrate and that keeps them from going home.

If the United States really wants to help, then look to politically empower as much as possible those migrants in their homelands. For instance, should they not have an important direct representation in their respective congresses? No remittances without representation!

http://theamericanunion.blogspot.com/

A letter published in the Washington Post 

OAS-IACHR, dare opine on a violation of human rights in the economy (and the environment)

The Charter of the Organization of American States establishes among its principles that "the elimination of poverty ... is the common and shared responsibility of the American States (Art: 3f)… And also to “devote their utmost efforts ... to achieve equitable distribution of national income”; (Art. 34.b)

The American Convention on Human Rights (1969) states (Art: 26) that "States parties undertake to ... achieving progressively the full realization of the rights implicit in the economic, social and educational, scientific and cultural standards set forth in the Charter of the OAS ... to the extent of available resources, through legislation or other appropriate means ".

And in the case of "Discharged and Retired Employees of the Comptroller vs. Peru" (2009) case law has been established, when in the judgment we read that the Commission on Human Rights "is competent to decide whether the State has committed a violation or breach ach of any of the rights recognized in the Convention, including with regard to Article 26 of the same ".

OAS has yet to define though what it means with a violation or breach of economic, social and educational, scientific and cultural standards. That is sad. Had it done so, much unnecessary human suffering could have been avoided.

For instance there are some economic policies or economic crimes that causes such harm to so many humans, so as these should classify as punishable violations against human rights.

I can think of corruption; of loony foreign exchange systems; of runaway monetary policies causing hyperinflation… and of course, of Venezuela’s domestic gas prices.

In the international market gas is sold at about $1.60 per gallon, in Norway, another oil country, it is sold domestically at US$ 8.40 per gallon, and in Venezuela, where people are dying because of lack of food and medicines, it is given away, at US$ 1 cent per gallon.

In Venezuela this horror is not discussed. The political price for proposing to correct it is perceived way too high by both those in government as by those in the opposition.

If gas were sold there at the price it could fetch in international markets, the reduction in the demand would allow much more gas to be exported, and much more food and medicines to be imported.

Would the prices be even higher, and all new revenues shared out directly among Venezuelans, then the incentives in the fights against inequality and against climate change would even be aligned.

So, can you imagine how much more sanity could prevail if the Inter American Commission of Human Rights declared gas giveaways to be a violation of human rights; something which could cause anyone directly responsible for such criminal policy to be hauled in front of an International Court of Human Rights… or even just in front of a local judge?

And, can anyone doubt the fact that the regressive fuel subsidies are de facto also a crime against the environment?

I tried to do something about this in 2009. No chance! I denounced this to OAS’ IACHR or OEA’s CIDH in July 2015. I am still waiting for a response.

Can somebody lend me a hand?

PS. December 2017: If gasoline was sold in Venezuela at current world market prices (0% tax) then between eliminating its smuggling and reducing its local demand, one could easily obtain US 10 million a day. At US$2 per day, that would help feed five million people, one sixth of Venezuela’s population.

@PerKurowski

http://petropolitan.blogspot.com

http://theoilcurse.blogspot.com

Some questions on Time Magazine naming Nicolás Maduro as one of the 100 most influential

TIME 100 LEADERS Nicolás Maduro By Nikhil Kumar

"Last year, as Nicolás Maduro ran for the Venezuelan presidency, he received a visitor from the beyond. He was praying in a chapel when a bird flew in, circled him three times and began to whistle. Maduro said he felt the spirit of the late Hugo Chávez, his mentor and former President, who had come to bless his bid for high office.

The Maduro campaign frequently invoked Chávez during the contest, and perhaps it helped. Maduro won — but only just, and not without the opposition alleging electoral irregularities. A year on, lacking Chávez’s firm grip on power, Maduro is struggling as a litany of ills, from soaring inflation to food shortages, fans popular discontent. All this in a country that many in the region trade with or depend on for cheap oil. Whether it collapses now depends on Maduro — and on whether he can step out of the shadow of his pugnacious predecessor and compromise with his opponents."

Some questions:

From the description above should Time not have included the bird that whistled or the spirit of Chávez instead of Maduro?

How can one name as "influential" one who cannot convince his own people to pay more than US$ 1 cent per gallon of gas? Allowing the price of milk, when it is to be found, to be 278 times the price of gas?

Could the being able to convince by sheer use of force a criteria to make into this list of influential?

How come TIME magazine, knowing how split Venezuela is, can take a side like this in favor of the regime? Intellectual or vanilla corruption?

3 weaknesses of the Gini coefficient when measuring inequality

1. It does value a dollar earned the same as a dollar received in transfers, and we know that is just not true.
2. It cannot consider all the unregistered wealth or income that is siphoned away by corruption.
3. It does not make it clear when an increased equality is primarily the result of many turning poorer.

Considering those 3 factors alone would shed the supposed reduction in inequality produced by the Chavez Revolution in Venezuela in a completely different light.

If we are to foster equality, let’s do it right, and concentrate foremost on the equality of opportunities, whatever that might entail.

Hugo Chavez and the poor of Venezuela

Now upon his death, we often hear news-media reporting in reference to Hugo Chavez, that he helped to pull a lot of Venezuelans out of poverty. That is simply not true. 

Hugo Chavez did indeed help many poor to live better in poverty, good for him, but that is far different than pulling poor out of poverty. To do so exceeded by far Hugo Chavez’s capabilities, and that of his collaborators. 

Those Venezuelans who did manage to pull themselves out of poverty, did that entirely on their own, or with the help of oil revenues and corruption and very little else.

Do we then need two World Banks?

Krishna Guha and Eoin Callan in the Financial Times of September 13 and in reference to a report on the role played by the World Banks internal anti-corruption unit the Department of Institutional Integrity (INT) were told by Paul Volcker, the main responsible for that report, that “his inquiry had ‘reconfirmed’ there was ‘ambivalence’ in the bank as to whether they really want an effective anti-corruption program or not”. 

Wrong! Having been an Executive Director at the bank (2002-2004) I sincerely believe that an overwhelming majority of the bank staff clearly comes out in favor of more and better anti-corruption efforts but that these do not come into fruition only because part of the management, rightly or not, believe that these could hinder the bank from operating efficiently… at least as they wish for it to operate for whatever reason efficiently. 

If we discuss “ambivalence” then perhaps we should also discuss what Volcker’s report does not touch upon and that is perhaps the single most outstandingly ugly blemish on the World Bank’s reputation. To see what I refer to please search out INT on the external website of the World Bank and then click on the list of Debarred Firms and Individuals. On that list you will find, duly named and shamed, the names of many individuals that one way or another after a due process have been considered involved in corruption, but that list does not include one single name of those officers of the World Bank that presumably must also have been involved in these acts of corruption one way or another. Susanne Folsom the Director of INT, on a Q&A session on that same site mentions, “We’re often asked why we don’t publicly name Bank staff who are terminated for fraud and corruption as well. The Bank’s rules don’t allow such disclosures….” 

What credibility can you get naming others while not being willing to name your own? It might very well be that the “ambivalence” on anti-corruption in the World Bank is insurmountable but if so perhaps what we need is to have two world banks since the world definitely needs one that comes out completely and unabridged against corruption. And mind you I am far from being a zealot on this issue, since life has taught me well that zealousness frequently carries within its own even more dangerous breed of corruption.

Odious debt should not be granted relief while odious conditions remain.

I am a citizen from a country that I consider corrupt and that needs to change a lot before any new debt could do it any good.

In this respect I urge you not to give debt relief to corrupt governments as that will only allow those addicted to debt to be able to hit the bars again, in the same shameful ways as before.

If the concept of odious debt is applicable in the sense that some debts should not have to be repaid if contracted in an illegitimate way, castigating the creditor, then the same concept should clearly also apply to the granting of any debt relief, punishing the debtor.

Growing difficulties to enjoy the booty

During the recent meetings of the World Bank, as a result of the current mess surrounding its president Mr. Wolfowitz, some issues were unfortunately relegated to the background.

One of them refers to the announcement of the Initiative for the Recovery of Stolen Assets, which, together with other agreements such as OECD’s against corruption, shows how the world progresses, very slowly but safely, on the path of better global governance.

The ease by which until now thieves managed to hide their loot is shameful; sometimes even under the noses of their victims. There is of course still a long way for an initiative like this to become an effective instrument ... but perhaps in less time than what the outlaws in the world suspect.

Parallel to official initiatives, the technological advances that allow access, archive and send information is converting civil society, citizens, whether we like it or not, into real-time investigators. It’s not they are searching, but when they do see a knowingly corrupt, and have their cell phone with camera in hand, they will take a photo of him in his moments of enjoyment, which will swell the truth-files until these explode.

In the same way, all those concealment of ill-gotten goods services, to which some corrupt countries have been dedicated are becoming more expensive; as that international community of civil societies develops and understands they have all better row in the same direction, if they are to have a chance for survival on an ever shrinking planet.

Finally and observing how in Canada an ordinary court recently began a trial on violations of human rights (the genocide in Rwanda), the day should not be far away when one of those millions of emigrants in the world who have been much forced to emigrate as a consequence of corrupt acts by their rulers, could successfully sue one he finds enjoying ill-gotten money in their new alternative country. The tests you would need to enter your claims, would all be sent to you on the web.

Does the above threaten the sovereignty of nations? Sadly yes! So therefore it is always much better for nations to free themselves, sovereignly, from their own corrupt.

One of the 4,292,466 shadow citizens of a shadow nation. (Insolently there are still records to be scrutinized)

Translated from El Universal

The World Bank, though in a hole, needs to dig deeper.

As a former Executive Director of the World Bank it is with much sadness that I have followed the Wolfowitz affair. It is clear that he should not have played a role in deciding the terms on which his girlfriend was seconded to the US state department and that he should now leave the Bank.

Having said that, I also find it important to question the appropriateness of the primary idea, put forward it seems by the Ethics Committee, since it does not seem to be correct either that the World Bank should be seconding anyone anywhere, even on reasonable and non interfered terms, as a tool to solve this type of conflict of interests, so as to allow someone to have his cake and eat it too.

In contrast while an Executive Director, we had to spend millions of dollars of the Board’s time just in order to debate a “measly” forty thousand dollar a year increase for the then World Bank president James Wolfensohn, just so that he would be able to earn as much as his counterpart in the IMF.

Now, after so much procrastination, by all parties, the only real solution for the World Bank, with or without Wolfowitz, lies in appointing a committee of true outsiders to dig deep and review all the World Bank’s current work related policies. The World Bank, when compared to other similar institutions, is very clean but of course, after 64 years of accumulating problem solving compromises, it should be time for a good scrubbing.

The world needs the World Bank to come out of all this smelling like roses, and the staff also deserve it.

What an opportunity we seem to have missed!

Daniel Smith in “Politicians cannot control Nigeria’s corruption crusade”, FT April 12, writes about Nigeria saying “its politics remains a stark scramble for power in which elites compete for domination of the state apparatus to reap the benefits of control over enormous oil revenues”, and so in fact little does the crusade againts corruption matter anyhow, especially while oil prices remain high. As is, the Nigerians now elect a government to whom hand over the oil revenues that in reality belongs to themselves, only to have to spend the next couple of years licking boots in order to get some of that same oil money back, while the elected government officials, arrogantly, not in need of other tax income, couldn’t care less about them.

It is only when you get to understand this that you really get a feeling for what a wonderful opportunity the world seems to have lost in Iraq. Can you imagine what having helped to channel the oil revenues directly to the Iraqi citizens in a transparent way could have done? That could really have been called democracy building, and the setting of a great example for the citizens of Nigeria, Venezuela and all the other oil cursed nations to follow.

Today, let us talk about the bribers

On the 26th of October, Transparency International, TI, published its annual index ranking the Perception of Corruption that exists of various nations. As usual, Venezuela was somewhere down at the bottom of the list. However, for the first time, TI also published an index related to the Payers of Bribes (BPI).

This index ranks the 19 countries with most exports and is based on the perception of how corporations from those countries use bribes to generate business. 

A professional firm interviewed 770 high level executives in 14 emerging markets with geographically diversified imports. Venezuela was not included among the interviewed parties, since most of its imports come from the United States.

The executives interviewed belonged to large firms, banks, chambers of commerce, auditing firms and law firms. A result of 10 points means no bribes are used while 0 means, naturally, that bribing is used as a norm. The countries with the highest ranking were Sweden (8.3), Australia and Canada (8.1) and those at the bottom of the ranking were China (3.1), South Korea (3.4) and Taiwan (3.5). 

The ranking of some of our main trading partners were England (7.2), Germany and the United States tied at (6.2), Spain (5.3), France (5.2) and Italy (3.7). 

Just like the Corruption Index, the Briber’s Index will create much argument and rebuttal, especially from those that were not favored by their ranking within the index. 

Among the traditional arguments, we are sure to find that many will maintain that the index is not really objective, but is really all about perception and that therefore, before being an ethical problem, it is really just a problem of the image. 

We will perhaps also hear technologically inspired arguments, such as accusing the better-positioned countries of using advanced versions of corruption, something like anti-radar, "stealth" technology.

I have often seen how citizens of many developed countries shed their shackles and truly enjoy the tourist (and humanistic) experience of trying to avoid a traffic ticket by negotiating avidly with the particular public servant that has accosted them. 

Also in other cases many people are better behaved when they are away that home. We see it over and over again when Venezuelans, who are notorious tax evaders, travel overseas and become exemplary citizens in every sense. 

Based on the above, one of the things that interests me is to analyze if, when the two indexes are compared side by side, there is a significant differences between the outcome.

With the exception of 5 countries, all those that have been ranked in both indexes, are basically in the same relative position. As it were, Sweden is first in both indexes while China is last.

The two main exceptions to this rule are Singapore which, in this group of 19, appears as 3rd in terms of the least corrupt nations but as number 11 in the Bribers Index and Belgium which, contrary to Singapore, ranks as number 15 of the least corrupt nations, but comes out a lot better among the Bribers, having been ranked as number 8.

In lesser degrees, Taiwan is in a situation similar to Singapore, while Austria and Australia accompany Belgium.

The simple translation would tell us that Singapore and Taiwan behave relatively well at home, but goes haywire and are a menace when abroad. 

I am no expert in these matters and therefore allow myself to suppose that this is due to a combination of a commercially aggressive style and oriental discipline. I can very well imagine that they respect everything at home and compete with anything overseas.

Without a doubt, both countries are formidable competitors in foreign trade, and one would entreat the OECD to insure they are also enrolled among those countries that have recently signed the Anti-Corruption agreement.

But how about those Belgians, Austrians and Australians? Although developed, they seem to be less behaved  Surprisingly they seen to be more behaved inside than out. I am truly surprised.

Could this be the above mentioned "stealth" technology at work? Could it be that they on purpose wish to be perceived as corrupt at home, in order to enhance their human nature? Could it be that they simply have decided to invest in a change of their image abroad, and that this was ultimately successful?

We shall see what gives next year. Investigative technology requires that you explain the unexplainable.

Corrupter and corruptee

Once again, next week, Transparency International (TI) will publish its annual index on how the world perceives corruption in the various countries included in the ranking. It is not necessary to mention that our country has never been able to occupy a reasonable placing within this ranking, although there are some expectations that we could achieve advances after putting into law a new Constitution, in year 2000 or 2001. 

But it takes two to tango! This year, by public acclaim, they will also publish an index that represents the other side of the coin. This index will rank the corrupters and will be denominated the Bribe Payer’s Index. I believe this will raise blood pressure levels in many countries that normally celebrate their high ranking in the Corruption Index.

Evidently, no one believes that the world will ever manage to totally eradicate corruption. In a sense, I hope it doesn’t, since this could mean the elimination of something that is an integral part of humanity, something like reducing human bio-diversity. However, I do believe that there are many means out there with which we can minimize the pernicious consequences of corruption and in this respect, no one needs it more than the developing nations.

Among the instruments at hand we must not underestimate the impact of these rankings. The modern world sees in them a comfortable, although probably somewhat simplistic, way of synthesizing today’s overabundance of information.

I believe the new TI index is appropriate and will be useful among other aspects in minimizing the effects caused by looking at only one side of the problem. For instance, until just recently, in one of those countries that normally come out smelling like roses from the corruption ranking, it was standard and legal practice to deduct for income tax purposes bribes and “payments” if and when the same are a “normal customary practice” in the country in which they were actually made. In this respect there was the very disturbing possibility that The Corruption Index itself could possibly promote corruption by evidencing a “normal customary practice” of bribing. Hopefully tax deductibility of bribes should perhaps be more difficult to justify if we have an index that ranks corrupters as well.

About a year ago and as I surfed through TI’s web site, I ran into a commentary made by a reader which literally said something like: ‘As a President of an international company, I find your corruption index of various countries to be a very helpful tool in my everyday business dealings”. In the face of such cynicism I researched a bit more who this person and company were and, lo and behold, they did not really have a relevant position in the global market after all.

By the way and on a quite separate issue, it is incredibly how frequent it is to find web sites put up by some small-time entrepreneur and who, even though his dealings are strictly local (like the proverbial corner barbershop), evidently believes that with it, he has acquired global presence. The same could probably happens to writers of articles, like myself, and in this respect The Web must surely be the napoleonic complex’s best ally.

But coming back to the matter at hand. It is evident that anyone that dares to say that the Corruption Index is a ‘helpful tool in my everyday business dealings’ should be negatively ranked in the Bribe Payer’s Index. Actually, when we analyze civilization, or at least its various religions, we find that in general terms they consider that he who tempts (a role usually assigned to the Devil) is considered to sin more severely than he who succumbs to temptation does. It is surprising that these contradictions have not come to light earlier. We welcome them.

And while we are at it. I would much appreciate it if TI, or any other organization with similar status and credibility, could develop an index that encompasses the matter of compliance with commercial treaties. 

For example, I am sure that if we were to generate an index that reflects compliance with agreements signed on agricultural policy issues, Venezuela would come out towards the top while those countries that today chastise us would be among the least compliant. Indexes like these would be very useful to small countries like Venezuela. They would show them how to navigate in a reasonable way in the very complex world of international commercial treaties.

The index of perceived Corruption

Transparency International (TI) has developed an index by means of which it ranks countries around the world according to their perceived levels of internal corruption. I have a Danish friend who recently came to me for the umpteenth time with this list clutched firmly in his fist, proudly crowing over the fact that Denmark once again tops the list as the least corrupt country while Venezuela once again comes in toward the bottom, beaten out for the basement spot by only seven countries among which we find Colombia and Nigeria.

As a Venezuelan, I immediately went into a defensive mode. I argued that since the index is based on the perception of corruption, it could be that the results merely indicate a serious problem of exactly that, the perception, not the reality. Additionally, should this actually be true (evidently not the case), I told him that although I did lament the fact that Venezuela was not mentioned in the top half of the list, I was at least satisfied that we were definitely not occupying any “not too human” first place.

My good friend, observing my discomfort, realizing that I have some Swedish blood in my veins, and in a sincere effort to console me, blurted out that in reality he also did not understand why Denmark had been ranked first while Sweden was ranked third. My immediate reply was “Chico, Denmark must simply have paid more for it.” 

Jest aside, the index is the result of a serious effort on the part of professionals of diverse backgrounds who, using the few tools available, have managed to develop a system of evaluation which is useful and of great support for every citizen wishing to combat this age-old plague. 

Its importance is of even greater significance when we hear that Transparency International suggests that we don’t attribute more accuracy than necessary to its index. Venezuela’s ranking on this list of 85 countries is such that it is evident, to say the least, that the country’s level of corruption is far greater than average. This is bad enough!

Any debate over whether Venezuela should be ranked higher could be perceived simply as a strategy aimed at discrediting the index. Only the beneficiaries of corruption could possibly have an interest in doing this. A true patriot would not waste one single second of his or her valuable time in debating why people speak poorly of our country. On the contrary, he would dedicate all his time and energy to correct the reality instead of objecting to the perception.

This debate on corruption is truly difficult and complicated. Even though we should be pleased that such an index exists, I am worried that the mere fact that we are trying to reduce corruption to terms of a measurable dimension may lead us to oversimplify the problem dangerously.

The index, in principle, only measures the perception of corruption in general terms. This is defined in ample terms as “the abuse of public office for private gain.” In this sense, and because of the nature of the problem, I am sure that when using the term “gain” we are referring mostly to a monetary benefit. This avoids measuring other aspects of corruption that could be just as important or more.

For instance, I believe that the appointment of someone to public office for reasons other than his or her capacity or professional integrity is a corruption that is even more pernicious and costly to the country than the sum of all monetary corruption put together.

An example of this is our recent banking-sector crisis. The costs caused by the poor administration of this crisis are far and above the costs attributable directly to the bankers involved. It’s not that the bankers are free of guilt. They did undoubtedly start the fire. But whose fault is it that the financial firemen were caught napping and did not hear the alarms, and that once they finally got to the scene of the disaster they tried to douse the flames with gasoline instead of water? 

I make these comments to remind all that the monster of corruption has a thousand heads. I would be sad if all the result of the efforts to slay this monster would simply be the elimination of the traditional offers of discounts for prompt payment, right then and there, and that we frequently receive when fined for a traffic violation.

Let me make one last comment on this quite tortuous subject. In Venezuela, perhaps more than in any other countries, there is more than sufficient evidence of the total administrative ineptitude of the state, and all of our governments have absolutely no results to show, considering all of their income. Nonetheless multilateral agencies, such as the International Monetary Fund, frequently come to the country and recommend an action (sales taxes) that could only mean allowing the state to squander even more resources. For whom then is the IMF working? For the politicians? Could we then be staring at another unknown dimension of this monster called Corruption?

As edited for Voice and Noise, 2006

Originally published The Daily Journal, Caracas, November 4 1998

PS. “Our recent banking sector crisis” I here refer to in 1998, was a Venezuelan one that happened in 1994. Reflect on how much of that comment also applies to the bank crisis suffered by developed nations in 2008. 

PS. The world needs more than a theme park of anti-corruption efforts

Traducción:

El Indice de Percepción de la Corrupción 

Hay un índice, desarrollado por Transparencia Internacional (TI), relativo a la percepción que existe sobre la corrupción en distintos países. Tengo un amigo danés que por enésima vez este año me ha suministrado la copia del ranking, donde Dinamarca aparece como el país menos corrupto y Venezuela, en corrupción, solo es superada por siete países entre los cuales esta Colombia y Nigeria.

Como venezolano, en obligada defensa, le expuse que por cuanto el índice lo que mide es la percepción que se tiene sobre la corrupción, puede que los resultados solo indiquen serias dificultades de apreciación. Además y para el caso (negado) de que fuese cierto, le comente que si bien lamentaba que Venezuela no estuviese en la parte superior de la tabla, por lo menos me satisfacía el que no ocupasen un "inhumano" primer lugar.

Mi amigo, a sabiendas que también soy de procedencia sueca y en un esfuerzo por consolarme, expreso, de forma generosa, de que en verdad no entendía sobre que bases se había determinado que Dinamarca ocupase el primer lugar y Suecia el tercero. Mi replica fue inmediata; "Chico, Dinamarca debe haber pagado mas!"

Apartemos la broma. El índice es el resultado del esfuerzo por parte de un grupo de profesionales diversos que, con base a las muy pocas herramientas disponibles, han logrado desarrollar un sistema de evaluación útil y de mucho apoyo para todo ciudadano deseoso de combatir esta plaga de vieja data.

Su importancia se hace aun más significativa cuando, siguiendo las propias sugerencias de TI, no le atribuimos mas exactitud que la necesaria. La posición de Venezuela en esta lista de 85 países es tal que sin lugar a duda podemos decir que en nuestro país tiene una corrupción mayor que el promedio. Lo anterior resulta suficientemente malo.

El debatir sobre si Venezuela debe estar en un puesto mejor, simplemente seria una estrategia para tratar de desacreditar el índice y en esto solo podrían tener interés los beneficiarios de la corrupción. El patriota no dedicaría ni un segundo al debatir el porqué se habla mal del país sino daría todo su empeño en corregir la situación.

Qué difícil resulta todo el debate relativo a la corrupción. Aun cuando reconozco que, en el papel de motivador, debemos agradecer la existencia del índice, me preocupa de que el solo hecho de tratar de medir la corrupción, al tener que reducirlo a una dimensión que permita su medición, puede conducirnos a una peligrosa simplificación del problema.

El índice, en principio, solo mide la percepción que se tiene como una corrupción general, definida esta de forma amplia como "el abuso de cargo publico en beneficio propio". En tal sentido y por la sola naturaleza del problema, estoy seguro que el termino de "beneficio propio" implica principalmente un beneficio monetario, obviando medir aspectos de corrupción que pudiesen ser tanto o mas importantes.

Creo que la corrupción presente cuando se nombra a quien habrá de ejercer un cargo público, por razones distintas a su capacidad e integridad profesional, es más perniciosa y costosa para el país que la suma de todas las corrupciones monetarias.

Como ejemplo de lo anterior, los costos derivados de la mala administración de la crisis bancaria supera, por largo rato, los costos que de forma directa son atribuibles a los banqueros. No es que los banqueros sean inocentes, sin duda prendieron el fuego, pero; ¿quién es el responsable de que el cuerpo de bomberos financieros, estuviesen dormidos sin oír la alarma y luego utilizaran gasolina para apagar las llamas?

Hago esta observaciones para recordar que el monstruo de la corrupción tiene mil caras. Seria lastimoso que el resultado de los esfuerzos que se haga para combatirla, solo culmine en que cuando se imponga una multa por violación de transito, no se ofrezca la tradicional alternativa, del descuento por pronto pago.

Por ultimo un comentario sobre este escabroso tema. En Venezuela mas que en cualquier otro país ha quedado evidenciado la total ineptitud administrativa del Estado. Todos los ingresos del mundo y nada de resultados. Cuando entonces un organismo, como el Fondo Monetario Internacional viene acá y nos receta, como única vía para salir de nuestros problemas, el que proveamos al Estado con mas ingresos aún, pagando mas impuestos, para el beneficio no individual sino colectivo de la secta política; ¿estaremos enfrentando una faceta desconocida de la corrupción?

Corruption: The fight against it seems to be going on!

Corruption: The fight against it seems to be going on!

On November 21, 1997, the OECD, an economic organization that covers developed countries, approved the "Convention to Combat Bribery of Public Officials in International Business." By the end of 1998, it is expected that the majority of subscribing countries will have ratified its validity and that it will enter into force in early 1999.

The normal reaction to this type of decree is usually to question its sincerity or its applicability. That is, consider it as "another hypocritical manipulation aimed at calming the conscience of the developed world" or, simply, "another useless legaloid effort to alter the realities of the world."

When we read, in the comments that have been made on the aforementioned Convention, that the prohibited bribes do not include "small "facilitating" payments..., which in some countries are made to induce public officials to fulfill their functions", and it is argues that these "small payments" must be fought by each individual Nation, since criminalization by other countries does not seem like an effective action; It is logical that we feel a certain hopelessness.

However, as citizens interested in fighting corruption, I believe that we should not ignore this Convention. In fact, if we read it carefully, we can observe the existence of some elements that, well handled, could be very relevant. These are: accounting for bribery expenditure and its deductibility for tax purposes.

Regarding accounting, the Convention establishes that "extra-book accounting, ... the recording of non-existent expenses, the recording of liabilities without correct identification of their object, and the use of false documentation, ... for the purpose of of bribing foreign public officials or concealing such bribes.” The signatory countries, for their part, undertake to effectively establish civil, administrative and criminal penalties that, in a rational and proportional manner, help deter such activities.

From the above, we could deduce that, in a certain way, accountants and auditors are being constituted as guarantors of the fight against corruption. If this is so, and if the belief is true that public accountants, in general, are not distinguished by being risk-friendly, then and since, by failing to comply with the rules, they could be considered as accomplices to bribery, it is expect that this measure, well implemented, will have a significant effect.

The other aspect refers to the deductibility of the bribery expense. It is surprising that it is necessary to regulate the matter, but it turns out that in many countries, even among those that beat their chests and are considered examples of neatness, bribes paid to foreign public officials are deductible expenses from Income Tax. The OECD reports that in a European country, between 1988 and 1992, the Treasury received 109 applications requesting the deductibility of bribes.

It is also indicated that, sometimes, deductibility is subject to the payment of the bribe being recognized, as a common practice in the country of payment, that is, as a normal and necessary expense. Transparency International is the name of a foundation dedicated to the development of elements that can be useful to combat corruption and one of its products is the well-known Corruption Perception Index. The above makes us think about the horrible possibility that someone is using the aforementioned Index to justify the "normality" of their spending and thus achieve tax deductibility of the bribe.

The OECD convention includes an agreement to prohibit the tax deductibility of bribery. By implementing this, not only will the cost of bribery increase, but it will also establish a direct relationship between Tax Legislation and the payment of bribes. Both facts will discourage both the commission of the crime and its concealment.

In conclusion, I believe that, by declaring bribery of a public official as a crime and expanding the necessary network of accomplices, by including accountants and auditors and, in addition, implying that the factual assumption that constitutes a bribe could also have consequences. legal provisions of a fiscal nature, gives us hope that a certain possibility of dealing a strong blow to corruption is emerging. We hope it is.

Maybe I'm delusional. The truth is that before, many businessmen could come to a country and bribe its officials and if they were discovered, nothing would happen to the businessman in his country. Tomorrow, in 1999, he can go to jail. As a citizen I must, at the very least, thank the OECD for this gesture of respect.

Venezuela must provide all its support to this Agreement and I would say, to the point of considering it mandatory for those countries that wish to do business with the Venezuelan State. At a minimum, we should also sign the Convention, as Argentina, Brazil and Chile have already done, despite not being members of the OECD.

https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0293

Recadi rises from the dead

In a country in which the Government proudly announces in 1997 the completion of a highway on which work was initiated back in 1973, the belated results of administrative and legal initiatives should not be surprising. Nevertheless, we have indeed been surprised once again upon hearing rumors about the summons being issued, applications for reimbursement being submitted, fines being imposed, appeals being declared null and void and other such fine aromatic herbs. The clincher is that all of these are related to Recadi. Yes, ladies and gentlemen, Recadi - not OTAC - Recadi!

I remind my younger readers, who could be under the false impression that the follies of exchange control systems originated exclusively during this Government’s tenure, that in the early eighties a system of controls was implemented as an answer to new exchange rate realities during which the devaluation of the Bolívar was discovered. This system was known by the initials Recadi.

The Recadi system sent the wrong economic signals, stimulated unnecessary imports and allowed for blatant corruption though the misuse of the exchange benefits it offered. It was the most costly economic experiment in Venezuelan history. All of the accumulated losses racked up during the recent financial crisis don’t even come close to the cost incurred during the Recadi years. Only the fact that the Recadi debacle was spread out over several years diluted its effect and made it less visible as a disaster than the bank crisis.

Even though there was some opposition, the Recadi system so totally enveloped the national economy that it resulted in the creation of a kind of society of accomplices or accessories which then made it extremely difficult to correct as well as to punish the abuses that were committed under the system’s umbrella. We can still remember the comments relative to the infamous Chinaman of Recadi, the only person who, as an exception that validates the law, underwent judicial punishment.

Recadi, as does all official bureaucratic process, implied the elaboration and use of an incredible amount of documentation. This put to task the internal administrative capabilities of industry and commerce in Venezuela not used to working with government entities at certain levels. Local banks were brought into the game by the government, and against their best judgment were forced to dedicate several years and immense resources to documentation and issuing of bonds to cover incomprehensible obligations.

When Recadi finally disappeared, there was general relief all around. As a natural reaction, all parties actually involved in this involuntary process immediately began filing, stashing, hiding and losing all types of documents which could possibly remind them of their participation in this horrid chapter in economic history. New actors also surfaced to help purge filing cabinets of this damning material. New upcoming generations which never had to live through Recadi (50% of the country’s population), foreign investors and bankers. All, however, have something in common. When they see a file labeled “Recadi”, they rifle through it, define it as the product of a historic comedy and then send it to the trash bin with the efficiency, energy and arrogance of a newcomer.

Once this happened, however, official entities of all types and colors began spewing forth their edicts; the Central Bank of Venezuela, the Ministry of Finance, the banks and the different Administrative Courts.

“The Court XXX, in relation to the recourse ........... declares null and void the administrative appeal submitted by YYY against the decision issued by the External Private Debt Registration Commission in its resolution of February 1985”

“We are pleased to notify you that the Central Bank of Venezuela has requested the reimbursement of US$ XXX in advance payments for the following imports due to the fact that the corresponding documentation required to justify said advance payments was apparently not submitted on time.”

The questions that still remain to be answered are several. What strange power can manage to reactivate, almost fantasmagorically, files that up to now have been classified as “dead”? Is this the new Venezuela in which justice arrives late but does finally arrive? Could this merely be an example of “I’ll get you sooner or later”? Or could this simply be the result of the privatization of official business?

At least some conclusions seem clear: Save even your toll receipt! Watch out, OTAC is coming, maybe not this century, but certainly the next!

Daily Journal, Caracas, November, 1998

Sh! Why must we be so loud about corruption?

In the past, statistics have indicated an extremely high suicide rate in Sweden, while comparable figures show a very low suicided rate in Mexico implied a very low rate. I heard that this was due to the fact that in Sweden suicide was more socially acceptable, and when people kill themselves, authorities register the deaths as suicide.

But in Mexico, the theory went, suicides were registered as “death by other causes” because suicides had social stigmas attached to them.

I don’t really know if this explanation was correct or not, but it comes to mind every time I see rankings comparing corrupt countries to squeaky clean ones.

Obviously there is corruption in Venezuela - and with a vengeance. There is material corruption, which involves payment of all types of commissions, And there is less tangible corruption, the kind that inspires government officials to appoint inept people to important public posts. 

(By the way, the latter is usually much worse in the long-run than the former. When a motorist pays a “tangible” commission to an officer in order to shorten a discussion about traffic violations, it costs about $4. may cost somewhere around four dollars. I don’t even want to begin calculate the cost of the intangible corruption!)

It is difficult for me to understand how Venezuela always manages to occupy such prominent positions among the most corrupt nations. We are not angels, but I don’t think we can look at this situation in terms of night-and-day, black-and-white situation that places corrupt nations in one corner and non-corrupt countries in another.

In my office hangs a framed copy of a fax sent in 1990 to a Venezuelan exporter informing him that some samples sent by him to a European city renowned for its law and order on a European airline had arrived and had been stored in another European airline’s warehouses. Unfortunately they had then been stolen. Our exporter was asked to send more samples, this time unmarked and in plain brown wrapping, since it was otherwise difficult to guarantee the shipment’s safety

This is, by the way, no joke.

It is also difficult for me to understand the fervor with which most of my compatriots assure us of the omnipresent existence of corruption. Of course it exists, but how bad is it really? And if it is so bad, should Venezuelans be so loud about it? When a maiden loses her virginity, should she run around and tell everyone about her condition? Probably not – such admission would probably attract the attention of other not-so-well-intentioned suitors. 

I recall having a conversation with a European exporter who (in a fit of laudable sincerity) explained that in his town’s train station, thieves absconded with one-sixth of his merchandise and at his country’s seaport, another sixth disappeared. Naturally, upon arrival at La Guaira, a further sixth was “found missing. He then came to the conclusion that the difference between a developed country, such as his, and an underdeveloped country, such as mine, was that mine (i.e. La Guaira) was blamed for the loss of each one-sixth-portion. 

During all of this soul-searching about corruption in Venezuela, I have managed to develop several hypotheses. The first is the one I call the “Geraldo and Cristina Hypothesis”. If you ever seen these talk-shows you see that each guest is afflicted with some type of grossly exaggerated malady. Under this theory, I liken some Venezuelans to these talk-show guests because they see determined to call attention to their maladies.

Who knows why. Maybe they want to enhance their market value on the talk-show circuit.

The second theory says that, by yelling “corruption has invaded everything”, Venezuelans are actually saying, it cannot be eradicated by normal means. It’s similar to an advanced stage of cancer. There comes a point when the cancer is so bad, not even chemotherapy can help. At this point, radical surgery is the only answer.

Perhaps I am offering these thoughts to ventilate my personal anguish about corruption, and the fact that it is affecting the future prosperity of our country.

In the meantime, before I can find evidence of a true reform efforts, I will continue to maintain, before my children (in order to safeguard the illusion each youngster should have of his country) that the commissioner for anti-corruption has not been able to do anything because there is an absence of corruption.

A million-dollar cédula

I realize that the dance of billions of Bolívares (millardos in Venezuela-speak) can often make it difficult to determine if we are talking of important amounts of money or not. When we speak in terms of dollars, it is usually clearer. During the past few weeks, we have been subjected to the debate swirling around the government’s decision to acquire a new national identification system valued at US$ 500 million.

US$ 500 million is a truly large sum of money! It is equivalent, for example, to the cost of 600,000 good computers or 35,000 middle range automobiles. It is superior by a long shot to estimates of the investment required to renew the entire metropolitan aqueduct of Caracas. Measured in day-to-day matters, this sum amounts to approximately 2.1 billion subway tickets. The financial cost of this investment, at a modest 10% interest rate, would be US$ 50 million per annum, which allocated to an estimated 2 million cédulas issued per year would result in a unit cost (interest only) of US$ 25 per document produced.

What is truly surprising, is that the debate this decision has raised is centered on whether or not formal steps corresponding to the award process, either by formal bid or through direct negotiation, have been complied with. There has been little mention of analysis, nor have many questions been raised, as to how the use of the nation’s resources is being prioritized. Suppose, strictly for argument’s sake, that a 10% commission will go towards fattening a corrupt official’s bank account. Suppose, as well, that the investment per se is really not necessary and that the objectives established could be reasonably covered with an investment of, say, US$ 100 million. The cost to the nation of the crime represented by the commission paid would be US$ 50 million. The cost of a flawed decision, even if taken by Mother Teresa herself, would be US$ 400 million.

A country often must undertake considerable institutional investments even when basic primary needs have not been met, but in this case, the cost-benefit ratio used by the National Government to support this huge outlay is difficult to fathom. Although it would obviously be nice to have a cutting-edge national identification system, the country has many profound needs that are far too important to allow us the luxury of trying to resolve a basic organizational problem by simply throwing money at it.

When we contemplate the dilapidated state of our health and education systems, it is difficult to understand the decision to dedicate such an important amount of resources towards resolving a problem which seems to be secondary in nature. Even developed countries such as the United States and the UK don’t even have identification systems.

In Venezuela today, we have severe problems related to the lack of basic equipment, material and even passports. These problems undoubtedly are caused by an absence of administrative capacity and this could mean that even if we invest in a new national identification system, we would very quickly be suffering the impact of this very same indolence.

It has been suggested that, should we not accept the proposed system, the one that contains a 4K memory chip, our only other alternative would be a student ID card. I don’t quite understand what is so wrong with our traditional laminated cedulas; if only they were ordered and issued on time.

If the political will to avoid fraud and to severely punish officials perpetrating the same does not exist, the system, no matter how much we invest in it, will not work. The only probable result would be that the tariff charged for corresponding illegal transactions would simply be increased.

As a pacifier, we are told that there is no reason to worry since this will essentially be a government to government transaction. Maybe we should be asking for a citizen-to-citizen conversation instead. I’m almost certain that the German citizens, should they be shown photographs of the operating rooms in the Hospital Pérez Carreño, would not see the ethical value of sending us a US$ 500 million personal identification system.

Finally, as an intellectual exercise, I asked several of my friends to come up with some of the bad things one can do with a false cedula. None of the suggestions they came up with come even close to the horrifying things someone can perpetrate with, for example, a false driver’s license. Except, perhaps, the role false cedulas may have had in electing our governments. For this to be avoided, 4K of memory might not be enough.

PS. In Argentina they were seemingly not as lucky

Traducción:

Reconozco que en el baile de los millardos de bolivares puede a veces resultar dificil determinar si se esta hablando de un monto importante o no. Cuando se expresa en dólares no. Durante las últimas semanas se le ha indicado al pais la voluntad del gobierno de adquirir un nuevo sistema de cedulación en 500 Millones de dólares.

500 Millones de dólares es un monto realmente grande. Equivale por ejemplo al costo de 600.000 buenas computadoras o a 35.000 carros tipo mediano. Es bastante superior a las estimaciones de costo requeridas para renovar todo el sistema del acueducto metropolitano. En elementos del dia a dia significa 2.130.000.000 de tikets de metro A una modesta tasa del 10% representa unos intereses anuales de 50 Millones de dólares y los cuales repartidos sobre un nivel de 2 millones de cédulas al año resultaría en un costo, solo por intereses de 25 dólares por cédula.

El tema ha generado un debate en el pais. Lo sorprendente de éste es que se ha centrado en determinar si se han cumplido o no con los pasos formales referentes a un proceso de adjudicación, sea por via de licitación o negociación directa, y menos en analizar o cuestionar los procesos de como se esta prioritizando el uso de los recursos del pais. Supongamos exclusivamente para fines de una discusión de que existiese una comisión del 10% y que fuera a engrosar la cuenta de algún funcionario corrupto. Supongamos además que la inversión en sí no fuese necesaria y que los objetivos previstos pudiesen razonablemente cumplirse con una inversión de 100 millones de dólares. El costo para el pais del crimen de la comisión es de 50 Millones. El costo para el pais de haber tomado la decisión equivocada y aún cuando así lo hubiese hecho la propia Madre Teresa, sería de 400 Millones de dólares.

A veces un pais puede tener la necesidad de efectuar inversiones institucionales aún cuando existan necesidades primarias insatisfechas pero en este caso resulta dificil entender la relación costo beneficio que pueda haberle sugerido al Gobierno Nacional este cuantioso gasto. Por supuesto que sería agradable poseer un sistema de identificación de vanguardia pero el país tiene necesidades mucho más importantes como para permitirse el lujo de tratar de resolver a realazos un problema básicamente de orígen organizativo.

Es dificil en Venezuela cuando contemplamos el lastimoso estado de la salud y de la educación entender que alguien sugiera dedicar tan importantes recursos a resolver un problema que pareceria hasta ser secundario por cuanto paises desarrollados como Estados Unidos e Inglaterra ni siquiera poseen sistemas de identificación.

Si en Venezuela tenemos un problema actual debido a la falta de equipos básicos, láminas y hasta de pasaporte es indiscutible que dicho problema se origina ante nada en una falta de capacidad administrativa y lo cual podría significar que aún cuando se efectúe la inversión en poco tiempo nuevamente suframos los impactos de la desidia.

Se nos ha dicho que de no aceptar la propuesta desarrollada, la del chip de los 4k, nuestra única alternativa sería la de un carnet estudiantil. No entiendo que de malo tiene nuestra actual cédula de identidad laminada, si la pidiesen y emitiesen a tiempo.

Si no existe la voluntad política de evitar los fraudes y de castigar severamente a los funcionarios incursos en los fraudes de identificación, el sistema y por mucho que se invierta, no funcionará. Probablemente el único resultado sería el de elevar la tarifa que se cobra por la ilegalidad.

Como un pacificador se le indica a la nación venezolana que no hay de que temer por cuanto esta operación se efectuara de gobierno a gobierno. Quizas debamos recurrir a una conversación de pueblo a pueblo. Estoy seguro de que el pueblo alemán, de mostrarles una fotos de la sala quirurgica del Hospital Pérez, estarían poco de acuerdo con el valor ético de vendernos un sistema de identificación en 500 Millones de dólares.

Finalmente y como un ejercicio intelectual le pregunté a varios de mis amigos sobre que cosas malas se puede hacer con una cédula falsa. Ninguna de las sugerencias llegaba ni cerca de los horrores que puedan producirse con por ejemplo una falsa licencia de conducir. Excepto quizás la de poder elegir nuestros gobiernos y para evitar tales desgracias quizas 4 k no sean suficientes.