Priorities, priorities

mexico_tvs

Mexico’s President has been battling corruption rumors for years.  I guess now instead of trying to actively combat corruption, he is instead spreading it around more!

Santiago Perez of the WSJ reports that the Mexican government “recently carried out one of the region’s biggest government giveaways: a $1.3 billion program to hand out close to 10.5 million flat-screen television sets to the country’s poor.” Looks like they have their priorities straight.

There are at least two major problems with this program:

First, and not surprisingly, “the process was riddled with corruption in its latter stages…Some contracts to purchase hundreds of thousands of TVs were awarded in no-bid procedures, and a high-ranking Mexican official asked for kickbacks during the process.” 

Second, “critics of the program say the government shunned less expensive alternatives, designed by the previous administration of President Felipe Calderón, for switching the country to digital television. Gustavo Rivera, executive director of Opciona, a Mexican anticorruption advocacy group [notes] ‘It was an overly expensive and flawed plan that showed either negligence or corruption.'” Or both!

 

 

 

 

Why don’t we do it in the road?

Of course you know I’m talking about planting banana trees, right?  Kenyan boda boda drivers, tired of empty promises by politicians to repair a road, have come up with an ingenious way of protesting.  They are planting banana plants in the road, arguing that if the government cannot bother to keep it up, they might as well turn it into farmland.

banana_plants

h/t to @kenyapundit, who tweeted the photo with the question: “Why are we struggling with such basics?”

Ken Opalo (@kopalo) wins the internet this morning with a reply that is both correct and poignant:  “Because we are all about shiny things. Leapfrogging our way back to 1600.”

 

 

 

Sheep go to heaven, goats become cabinet ministers

The FT notes that former Brazilian President Lula da Silva reportedly said the following as a revolutionary in the 1980s:

“In Brazil, when a poor man steals he goes to jail — when a rich man steals he becomes a minister.”

His words appear to be both true and prophetic:

lula_wow

h/t Ian Bremmer (@ianbremmer)

Title context below:

How Not to Fight Corruption, Mexico Edition

Ernesto Villanueva has a great post up about the uselessness of Mexico’s new anti-corruption scheme currently being debated in the Mexican Senate.  He also has a hilarious (but sadly, accurate) description of the background to this constitutional amendment:

It was precisely a corruption scandal involving the president, his wife and his treasury secretary, Luis Videgaray, that led high-level figures to prioritize anti-corruption legislation in the first place. President Peña appointed Virgilio Andrade — a close friend of Secretary Videgaray from their university days — to investigate a conflict of interest case involving Peña, his wife and Secretary Videgaray. To be clear: Andrade was asked to investigate a conflict of interest case involving a party with whom he had a conflict of interest. The result was predictable.

And here are some reasons he is skeptical about the new amendment:

a. It would “leave the president untouched and outside the scope of the anti-corruption regime except in two cases: a) treason against the nation and b) serious criminal offenses. Since treason is almost impossible to prove in Mexico, and all serious criminal offenses specified in the bill have disappeared from the Criminal Code.”

b.  “In order to protect legislators´ freedom of speech and avoid persecution due to statements made in Congress, legislators were given “fuero,” or immunity, in 1917. The fuero has been distorted and is now used to guarantee impunity for politicians. Aside from the need to eliminate the immunity provided by the fuero, the anti-corruption reforms do nothing to address its misuse, and it remains intact.”

c.  This one might be my personal favorite: “a mandatory declaration of financial assets is not made public unless the public servant agrees to it.”  And it gets even better:  “Although the declaration is made under oath, the financial information is not checked to confirm its accuracy.”  Because no public servant would ever lie under oath!

d. To wit, the amendment would call for a huge new bureaucracy that has little power (it can only “recommend prosecution but cannot actually prosecute”) but will almost certainly increase corruption by incentivizing “the partisan distribution of government jobs.”

Villanueva sums it up perfectly when he says that the reform gives “an impression of change, but not change that is in any way real.”  That pretty much sums up a lot of reform in Mexico.

Truth is Stranger than Fiction, Mexico Edition

and I’m not actually talking about El Chapo’s (second) escape from a “high-security” prison in Mexico.  No, this time it’s Pemex that is providing the hilarious incompetence via an article called “12 Ridiculous Things We Learned About PEMEX’s Insanely Expensive Safety Videos.”

Let’s start with the fact that Pemex has a terrible safety record.  According to the article (and the Reuters investigation upon which it is based), “Mexico has the worst injury rate of all major oil-producing countries.”

Instead of fixing the situation through better worker training, management instead decided to “spend over $40 million to make cheesy safety videos filled with bikini-clad telenovela stars and low-budget special effects.”  Wow, what a great idea for a company that supposedly is trying to get its act together.  Management decided this was a better use of money than actually providing more safety training and apparently a lot more fun for the workers (according to one safety official, “If a woman comes out in a bikini, it is like salt and pepper for the oil workers.”)  Alrightly then.

And how do you manage to spend $40 million on safety videos.  Excellent question.  The article notes that:

“At least part of the budget went toward hiring nine pre-production staffers, 10 stunt doubles, four drivers, two areal cameramen, 37 miscellaneous crew members, actors and extras and mediocre green screen technology. It is not entirely clear where the rest of the money went.”

That last line is classic Mexico.

Cada oveja con su pareja, or the least “green” Green party in the world

Jo Tuckman, author of the excellent book Mexico: Democracy Interrupted, wrote an article for the Guardian yesterday called “Mexico’s Greens: pro-death penalty, allegedly corrupt – and not very green.”

She starts the piece by noting that

(1) Greens traditionally have had to fight the stereotype that they are tree-hugging idealists that will never make much a mark in the rough and tumble political world.

and

(2) This is not a problem for the Mexican Greens, a.k.a The “False Greens”

Here are some reasons why:

a. “The party have regularly been accused of corruption, selling political favours – and of showing no interest in environmental issues. In 2009, the party ran an election campaign calling for the return of the death penalty. Of the infamous 2009 campaign slogan calling for “Death to Kidnappers”, he said: “It is true that the European Greens would never support the death penalty, but they don’t live in Mexico.”

b. “They [the Green party] have taken a family business to an extreme that borders on organized crime. Their sale of favours has bubbled up like foam.”

c. “Their electoral strategy relies heavily on remarkably slick and well-targeted political advertising that offers apparently easy solutions to major problems, and rarely has much to do with environmental issues. Defending the strategy, Escobar said: “We are the second biggest Green party in the world, after the Germans, so we have to defend the whole range of issues affecting the population.”

d. “The Greens concentrate the bad elements of Mexican politics and take them to an extreme,” said political analyst Jesús Silva Herzog. “There are sinister figures in all the big parties, but there are some respectable ones too. I cannot think of a single respectable figure in the Green Party.”

Like the old cliche that birds of a feather flock together [cada oveja con su pareja!], the Green Party is allied with the PRI.

Burn baby, burn

When Robin and I lived in Mexico, Semana Santa (Easter week) was one of our favorite times of the year. So much less traffic! Easy to get into fantastic restaurants! Burning of giant paper mache Judas figures.

judas

This is a long-time tradition, but Mexico being Mexico, the images can get really creative. For example, when we were there, there were a lot of Carlos Salinas Judases getting incinerated.

Here’s a great and topical pic from this year’s Semana Santa celebrations showing EPN and Mrs. EPN in their multi-million dollar, government contractor provided “Casa Blanca” (photo from @TalamantesCNN) about to get all burnt up.

CBxMFeMUEAALAXP

You can also see a more traditional “devil Judas” in the background waiting his turn.

Ghost on the highway: on the salary-corruption nexus in Ghana

I just came across an interesting paper that provides evidence against my prior belief that increasing civil service salaries would lower corruption.

It’s called, DO HIGHER SALARIES LOWER PETTY CORRUPTION? A POLICY EXPERIMENT ON WEST AFRICA’S HIGHWAYS

by Foltz and Opoku-Agyemang (heres a link).

Here’s the abstract:

In one of the most ambitious public sector reform experiments in Africa, the Ghana government doubled its police officer salaries in 2010 in part to mitigate petty corruption on its roads. Neighboring countries in the West African region left their police salaries unchanged. Using unique data on bribes paid from over 2,100 truck trips in West Africa and representing over 45,000 bribe opportunities, we evaluate the reform impacts on petty corruption using a difference-in-difference method that exploits the exogenous policy experiment. By following bribes paid by the same trucks in different countries as well as to different civil servants in Ghanaian bribe taking we can identify whether salaries affect both the number of bribes and the amount given by truckers. Rather than decrease petty corruption, the salary policy significantly increased the value of bribes and the amounts given by truck drivers to policemen in total. Robustness checks show the higher bribe amount is robust to alternative specifications. Moreover, we do not find that Ghana policemen collected significantly fewer bribes than other officials in the same country.

So I guess when your pay is higher, the same old bribe you used to be happy with now seems like a miserable pittance and you adjust your “requests” appropriately upward.

“Not everything is perfect, perfect, perfect.”

A couple of years ago I created a series of videos for Marginal Revolution University on Mexican Economic Development.  I learned a lot about the unbelievable problems of the national oil industry in Mexico (Pemex) while doing so and created three videos on the topic (The Problems of PemexAn Overview of Pemex, and Pemex’s Poor Performance).  But even I was surprised to read about the scope of corruption and fraud in Pemex in a recent article by Reuters called “Mexico looks the other way as contractors fleece oil giant Pemex.”

The article is amazing and I recommend you read the whole thing to really get an idea of what has been going on.  Here are some of the gems though:

1. “Pemex paid $9 million in 2011 to have an oil rig towed halfway round the world, from the United Arab Emirates to the Gulf of Mexico. The rig had the wrong equipment for the assignment, according to a report by Mexican congressional auditors. And the tow job itself was a fiction: The rig didn’t need to be moved. It was already in the Gulf of Mexico.”  I love how the audit buries the lede by talking about the wrong equipment first, and then getting to the fact that there was no actual towing.

2. “Reuters identified more than 100 Pemex contracts signed between 2003 and 2012, worth $11.7 billion, that were cited as having serious problems by the Federal Audit Office of the lower house of the Mexican Congress. The allegations ranged from overcharging for shoddy work to outright fraud. Pemex almost always disregards these warnings. From 2008 to 2012, the most recent year of available data, the congressional auditors issued 274 recommendations that Pemex take serious action over contract irregularities – either press criminal charges, discipline employees or claw back money. The company issued responses to 268 of the cases. In only three of them was action taken. The result: A handful of employees received suspensions. Pemex’s internal control office dismissed 157 of the cases. As of last month, 108 were unresolved.”

3. “The SFP investigators at Pemex, meanwhile, are reluctant to pursue cases against the officials they are supposed to regulate. These internal investigators technically are independent of Pemex, as employees of a separate federal agency. But the federal agents – mainly lawyers and accountants – are effectively part of the oil giant. They are paid by Pemex and work in Pemex offices.”  How to fail at Anti-Corruption 101.

The title of this blog post comes from one Manuel Sanchez, a Pemex official who approved selling a Brazilian company Unigel a chemical at a very discounted rate for many years, so discounted that it is estimated that Pemex lost “$24.2 million from 2009 to 2011.”  And what does Mr. Sanchez, who is now the chief of Pemex Petrochemicals, have to say for himself: “Not everything is perfect, perfect, perfect. We realized that there are things to improve.”  So true but so unlikely to happen, especially with Sanchez at the helm.

There’s an app for that!

Newsweek just published an article called “Fighting Corruption One App at a Time in Latin America” and it was one of the most heartening I’ve read in a while.  Corruption thrives when there is no transparency, when the people are uninformed of what is going on and must rely on rumors instead of facts.  These new cool apps hope to bring some of these practices into the light.  Here are a few of my favorites:

1. “Balentin Cacha Espiritu is a convicted terrorist. Herline Pitman Quispe Ramos was found guilty of manslaughter. Florentino Lope Ruiz was sentenced to 10 years in prison for rape. Those seemingly random acts of violence are interesting this month for one reason: All three men are running for public office in Peru, and their criminal histories would have been kept essentially in the dark were it not for a mobile app recently launched by Peru’s High Level Anti-Corruption Commission.”

2. “In Bolivia, a civil organization launched an app called Fictitious Budget, where volunteers who attend campaign events can upload estimates on how much they cost. They input the number of people attending (the app recommends dividing the space into quadrants, then estimating the number of attendees in each), the names of any musical groups performing, the type of propaganda and souvenirs handed out, and whether food was provided.”

3. “What about holding officials accountable after elections? A group of students from MIT has been working on an app to do just that in Brazil. Called Promise Tracker, it collects data of projects which candidates made during election. The group first had to define what counted as a promise, what counted as progress and who should be held accountable — difficult questions to answer even when there is full transparency in government.”