The Strategy Den Blog Archives: Russia, Kazakhstan, Competitiveness
November 1st, 2009
When the Soviet Union broke up, like a corporation, it liquidated assets. Warsaw Pact countries were sold off at bargain prices. The Baltic States, Central Asian States, Georgia and the rest of the Caucuses. African nations, perhaps the only place with a few countries that have something gain through communism, Cuba, etc.
But Russia is back and it is reasserting its influence in Central Asia and elsewhere. The high price of oil, reform and drastically reduced spending of the former-Soviet state are the reasons. You can watch Russia Today, (Fox-skaya TV) Russia’s English language news channel on free to air satellite to hear about it. This should be expected. The countries of the Former Soviet Union share a common language, trade and transport links oriented towards Russia, and a considerable number of citizens residing in Russia and vice versa. Some countries have considerable political, geographical and social obstacles to their self-sufficiency. They have few choices but to take aid from Russia or others. Russia is availing itself of a number of policy tools: trade agreements, aid, military cooperation, budget support and provision of public services.
Staking the central banks of states crushed by the 2008 economic downturn, increasing the attractiveness of hydrocarbon transport deals and advancing the ruble as a reserve currency, the Russian corporation is taking an equity stake in its neighbors that’s more legitimate, and shares more realistically risks and rewards. Re-integration as some see it or increased economic integration will continue between Russia and its neighbors. In the past, this dynamic was based on imposed socioeconomic policies and military threat to back them up. Now, Russia is behaving more like a multinational. I agree with the opinions of the Eurasian Development Bank in these matters. Russia should continue to seek mutual benefit and true cooperation.
The Market in Dushanbe, Tajikistan
There is more to gain through this approach than dictating terms and demanding obedience from these countries. Furthermore, it is considerably more economical for Russia to influence outcomes in neighboring countries now that those countries are independent as Russia is no longer responsible for running these countries.
October 4th, 2009
A number of factors led to this move. First, the Agency made me an offer I couldn’t refuse. Second, with great skiing and horse meat on the menu, I won’t miss Switzerland much.
I am the Senior Economic Policy Specialist for USAID’s Central Asia Mission based in Almaty. My portfolio consists of projects that improve cross-border trade in Kazakhstan, Kyrgyzstan and Tajikistan. Customs reform, trade negotiations such as those required for WTO accession and compliance with WTO agreements, and implementing better processes for trading goods and services across borders occupy my time.
Damn, now it’s the end of February and that crane is still not moving. The credit crisis is deep in this part of the world. I should do an emerging market crane movement index that would become an indicator for investors. It would be like some kind of discount rate calculation base on construction crane usage. We could have emerging market crane cam, cool.
August 27th, 2009
The business mind never stops working, even considering somewhat mudane areas. I don’t know why I am going out of my way to give some of the best run businesses in the world new ideas, but if Coke or Pepsi put out a product with 50% of the sugar of their regular offerings, it would be massive. I am thinking of a dryer version of Coke, perhaps in small glass bottles like the mysterious espresso sodas or Italian bitter drinks.
I also have a few ideas for cigarette manufacturers, but I don’t like to encourage smoking…
July 5th, 2009
The Health Metrics Network at the World Health Organization and other partnerships have to meet the needs of diverse constituents. If they do not, donors should spend their money elsewhere. The need for accurate and timely health information is undeniable, but who needs a partnership like ours?
We are situated with the WHO’s Information, Evidence and Research cluster, largely concerned with setting a variety of standards and norms. As an apex organization, the Health Metrics Network aspires to intellectual leadership in the subject matter conferred by usage of the tools, standards and recommendations we produce, but also from knowing what is happening in the space, packaging it, communicating it to those that care and getting governments and donors to spend more on health information systems strengthening.
June 10th, 2009
Bill Gates was in the house yesterday. He met with directors and higher ups in one of the auditoriums. To summarize, his comments were critical of the UN bureaucracy and reiterated the Gates Foundation’s commitment to research, technology and finding the next killer app for health. The Foundation attracts some criticism for this strategy. You got a better idea? Didn’t think so. Watching the West Coast try to reconcile itself with international development, NGOs, multilateral and bilateral donors is painful. What justifies the vast sums of money spent on secretariats, meetings, conferences, workshops and costly travel budgets? The flying around, the talking funny, etc. My boss from many years ago at Deloitte was of the same opinion when we spoke last week.
May 28th, 2009
Here is a book that matters, Global Health Watch 2.
I was only going to read the Gates chapter, but I got sucked in. It is a well-written, fast paced, 350+ pager. They keep the pressure on the US, and that section gets a little gratuitous. The facts are thin in places and cherry-picked to back their arguments with some obfuscation. Any Ivy-league debater with a William F. Buckley t-shirt could go the other way just as effectively, but it is well-written. Then there are some generalities that come across as just attention-getting, but it is otherwise hard to get more than seven people outside the authors’ Facebook circles to read this stuff. The bottom line is that this is the ideal level of depth for the big arguments about the subject matter. The authors know that the US taxpayer would be happy to devote more money to international organizations if there was more transparency in their operations, costs and governance structures, and these were communicated effectively…… wait, I am not sure you’d want to do that….
… and you all know my review is better than the nice, softball from the shill who got hers in the Lancet. I guess the authors will cite her more often in their stuff.
May 19th, 2009
Guess what he said in his address? What do you think he said about maternal and child health, the H1N1 virus, the interconnectedness of nations and humankind? Yup, he said all those things, but every time I hear it, there is the possibility for epiphany, for understanding of one of the “big issues,” maternal mortality for example. Sarah Brown followed BKM. She made maternal mortality sound like a supply chain issue: get enough of a few drugs to where they are needed to avoid avoidable deaths. I am sure this won’t completely solve the problem, but it would get us some movement towards this Millennium Development Goal. I have to dig out my old books from the American Production and Inventory Control Society.
May 10th, 2009
I should call this post “how to run the Health Metrics Network” because that’s what I’m involved in everyday, and I don’t have the time to solve the problems of the Global Fund, Stop TB or any of the other partnerships at the WHO.
I make this post in the spirit of full disclosure. This is what I do every day. I take the number 8 bus to the WHO Secretariat every morning and try to make sure that $55 million in generous donations from the Gates Foundation and a few others for strengthening health information systems for low-resource countries result in something. The first step is convincing donors like USAID, DFID and the governments of rich countries that they might as well be flushing their aid and assistance funds down the toilet if they are funding health programs in poor countries without regard for health information systems. Many countries, poor and not so poor, do not have adequate information on cause of death, how often their people use healthcare facilities, and for what reasons. They also don’t know how much and which pharmaceuticals are being used, how many are available and how long it will take to get more, or even how many doctors and nurses they have. As a result, budgets for health expenditures are poorly planned and wasted. When donors open the wallet, they have difficulty knowing what’s going to have the most impact. After they have, the can’t tell what they’ve really achieved. Information-based policy and decision making are needed. Systems are needed. Anecdotal evidence, doing whatever Bono thinks is cool, or something that came out of what you saw in the film Blood Diamond are no way to base decisions to alleviate poverty. Information is.
April 22nd, 2009
I supervised USAID-funded consulting projects that worked with the West Africa Power and the West Africa Gas Pipeline. The goal was to get the power grid of West Africa interconnected, better performing and see markets for energy evolve.
Power Privatization for Extremely Poor Countries
It’s not the solution in many cases. As resigned as I am to the realities of capitalism, many of the poorest countries are not in a position to privatize their power assets. Frequently, these countries have higher per unit costs for electricity due to scale, landlocked locations or disbursed population centers. A small percentage of elites have access to power for which, through political influence, they obtain subsidized rates. Politicians are loathe to increase tariffs to levels that approach cost recovery. In such a situation, investment requires subsidies so that power networks can develop and fuel economic growth. The private sector will never invest in such a situation. I am bringing this up because there is a tendency for international organizations and G8 governments to act as though privatization can solve all of the governance and management issues around infrastructure in poor countries. This is too simplistic a solution. There are other avenues through which infrastructure in poor economies can be and should be addressed. If local investors can’t figure out how to make money running a utility, can foreign investor be expected to do better?
Ghana, however, is not in this category. When I lived in Accra from 2004-2008, the city went through a period of more than a year without power. Even in Labone where the affluent and powerful lived, drastic power sector problems necessitated power cuts about 50% of the time. This was something to contemplate during the pageantry of the African Union meetings in 2007. The entourages of the African leaders composed of blacked out Mercedes sedans, 4X4s and police motorcycles streamed around the city at all hours, sirens and cherries on with security forces and pith-helmeted police at all major junctions.
Not much you can do when traffic is bad in Accra.
The issues were (and still are) Somalia and Darfur. The well-traversed United States of Africa concept was brought out. This concept is so far away from the reality of relations between African countries and the actions of most leadership, that it should be dismissed for at least another 20 years. Sub-Saharan countries are still in the process of nation building with large segments of the population (more importantly, elites) having little interest in the development of nations as embodied by the current borders, the concept of sharing of power, and the degree of collectivism that is needed to escape poverty. There are a variety of cultural, economic and other explanations. This was also a characteristic of the US and Europe prior to “unification,” but the development of systems that share national capital, make public expenditure (taxes) more transparent and useful, make leadership accountable, and generally allow people to have a say about how they are governed are deficient in almost all countries. When these aspects of Sub-Saharan governments grow stronger, the national governments will become more legitimate, and stronger nations will emerge. At that point, the United States of Africa could be viewed as possible.
An economic union in practice with economic characteristics of the EC would emerge first. Today, moving people, goods and money across borders is difficult, costly and done as infrequently as one must. Particularly in West Africa, economic systems are set up for linkages to sell commodities to international markets and import manufactured products (and services) from outside Africa. Trading between countries is inefficient. Small domestic markets, with the exception of that of Nigeria, are not large enough to encourage the levels of investment needed to build industries and create jobs. An example of this problem is that it is simply not legal to manufacture, grow or trade many kinds of goods in Ghana or Burkina Faso and sell them in Nigeria. Smuggling and corruption in Nigeria still permit outlawed goods to come in, but this is not helpful for Nigeria nor is the policy of forbidding imports from the region. Africans crossing land borders in West Africa are extorted in various kinds of ways despite the existence of treaties and protocols to which their countries are signators. The situation is still farther away from that which existed in Western Europe when preliminary steps were taken to establish the European Union.
The current situation requires a degree of political will to solve that is not yet present. In addition, to a more participatory approach to doing things. Absent this political will, the long-term viability of many African nations is in question, much less the establishment of a United States of Africa.
An American who lived in Niger for years opined as follows. “The idea of a United States of Africa is thought-provoking. As technology and markets emerge, “government” and “nations” may find themselves becoming increasingly irrelevant outside of a protocol/military role. In Niger, and I would guess much of the Sahel, you basically have a 21st Century Feudal system with some hybrid Franco Colonial political system. But once you get a few kilometers outside the capital, you better start learning the language of the local authorities.
I keep thinking of a story I heard once where Somalia had the fastest growing and one of the most efficient cell phone networks worldwide due to the lack of government regulation due to a lack of government. I am not advocating for libertarian anarchy, but the construction of government structures/institutions needs to be re-thought. Instead of organigrams and bureaucratic systems layered on top of each other operating in a mostly irrelevant/fictional reality, a decentralize system of nodes/networked model might be better suited for delivering goods and services to constituents.”
April 19th, 2009
I better blog all this stuff so I don’t forget what I’ve worked on.
Here is VOA’s whole story below, but the photo above is mine of an Ivoirian driver having a little talk with some uniformed guys in Northern Ghana.
“The Economic Community of West African States is trying to change a long history of corruption in the region’s transportation industry. ECOWAS says due to corruption it costs more to transport goods in West Africa than anywhere else in the world. Phuong Tran reports for VOA from Dakar ECOWAS says it is working for a change.
Commercial truck drivers have long accepted that on West African roads, they have to pay bribes to the police, military and border officials.
Jacques Ylboudo has driven for the Burkinabe Merchandise Transport Company for the past 10 years.
Ylboudo says he only loses time if he tries to argue or negotiate the bribe. He says even his passengers must pay at least two dollars each. He says long delays and bribes are a part of doing business in this part of the world.
The Economic Community of West African States says it has been collecting information along the region’s most heavily traveled roads for the past year. Truck drivers volunteer to answer surveys about the number of control posts they pass, how much they pay, to whom, and how long they wait.
Researchers from the U.S.-funded West Africa Trade Hub, based in Ghana, collect forms at three main roads in Burkina Faso, Mali, Togo, and Ghana.
Investment advisor Jeremy Strauss, of the U.S. Agency for International Development, says reducing corruption will increase trade flow and foreign investment. But Strauss says it is hard to measure corruption.
“It is a moving target because there are changes in the landscape of the corridor and people’s experiences differ from year to year and from trip to trip,” said Jeremy Strauss.
Investigators from West Africa Trade Hub recently drove through the region and found check points in Senegal were among the worst. The investigation found that for every 100 kilometers traveled, drivers paid on average $19 in bribes to get past more than seven checkpoints.
Questionnaires from last November showed the 900-kilometer drive from Ouagadougou, Burkina Faso to Bamako, Mali ,was the most expensive. Drivers reported paying on average $128 in bribes at 25 checkpoints.
Driver Jacques Ylboudo says since he first started filling out surveys for the Trade Hub in late 2006, things are a little better, but he says there are still hours of delays.
He says in Ghana, police set up unofficial checkpoints on the road at night, and will disappear by the morning, along with the payments they received.
But the head of the transportation unit for Ghana’s national police department, Daniel Avorca, says the problem is not only corrupt policemen, but also drivers who willingly offer bribes to stay on the road illegally.
He says many drivers want to avoid arrest and fines for not having licenses to drive commercial trucks, or registering those trucks.
“The person who offers the money so that he or she will not be prosecuted sees it as advantage over the time he may waste to go to court,” said Daniel Avorca. “This phenomenon is an on-going problem that we are trying to solve. We are fighting day and night.”
The West Africa Trade Hub says drivers who fill out its surveys have their proper licenses and car registrations.
Police chief Avorca says he has increased television and radio ads to ask people to report if they have been asked for bribes or offered bribes illegally, but he says most people are too scared to report because they are partly to blame.
Even so, the average number of bribes paid by drivers in Ghana went down from about $4 per 100 kilometers to about $3, according to the West Africa Trade Hub.
An official with Ghana’s Ministry of Transportation, Peter Ofori-Asumadi, is a member of the country’s special transportation committee. In 2005, ECOWAS set up several such committees in countries with a lot of business traffic.
He says corruption in West African road transport is hard to solve because of how many people are involved: customs, military, police, port and transportation authorities.
“As huge as it may seem, I think that if these issues are publicized, and you are not the only one who is aware, and you think you are working in secret, and now it is exposed, it may go down, if not eliminated completely,” said Peter Ofori-Asumadi.
Ofori-Asumadi says that’s a goal worth pursuing.”