Thursday, April 30, 2009


I haven't posted for about a week. I'm wrapping up my work in Ghana - which involves considerable pandering and report writing. Wheels up Friday night to Kyiv. Then perhaps to Bishkek. Definitely to Moscow to see what's up and then perhaps to Vienna. Hope to stop at Askania Nova in Ukraine (good place to go to see the steppe as it existed 3000 years ago). Will get back to acerbic comments next week.

Thought for the week - on US politicos - Michelle Bachmann is a dope...your constituents who voted for you should be embarrassed. Is it possible for GOPers to be embarrassed? Oh, yeah...

Second thought for the week - is Tymoshenko a lock in the next election?

Next stop Kyiv.

Saturday, April 25, 2009

Moldovan moves

President Veronin of Moldova has done something I would not have expected - requested a much faster EU accession process. This will not sit well with Russia, I assume. The EU response will be interesting.

SME Development in Ghana

The Daily Graphic (no link available) in Accra reported that the University of Ghana Business School had launched a unit for an Enterprise Development Service to help SME owners and operators to improve managerial skills and "become more business oriented". It is intended to link the public and private sectors to find solutions to the problems faced by SME's.

For Ghana, this is an important development. In Accra, merchants set up kiosks everywhere selling fruit, carvings, plastic furniture and anything else that can be sold. The news does not report whether there will be any follow-on support. I hope the IFC, which funded the start-up of the program, has a plan for sustainability and support to new entrepreneurs. The news article does not say, but a program to monitor and provide follow-on assistance would be an important aspect of any SME program.

Another question is whether this program can or will be coordinated with an overall economic development program. A serious problem in Ghana is the fragility of the land tenure. Indeed, the growth of slums is alarming as the urbanization of the country accelerates. One "city" of approximately 300,000 was not even recognized on a map until recently. Land tenure is very weak, to say the least. Consequently, potential entrepreneurs cannot use their assets to obtain any credit to start, much less grow, a business.

The linkage of the type of training now offered by the business school of the University of Ghana with other needs is critical to its success. It would be a pity if the training resulted in a brain-drain or inability to put those skills to use.

Friday, April 24, 2009


Armenia and Turkey have announced a protocol to normalize relations. So far, so good. However, the protocol has simply been initialed and both parties need their respective parliaments to approve. That may be difficult in Armenia, and not so hard in Turkey. Another 'however' is the participation of Baku and its fears that Turkey is about to hang it out to dry over the NK region. Turkey will need to do something to calm them down. Their threats to cut of the gas and oil pipelines to Turkey and route them through Russia is probably not serious - they simply don't like the Russians. Nevertheless, the concerns over concessions on the NK - particularly if they involve giving up any claims - are real and need to be addressed.

As pointed out in this blog and elsewhere, an open border arrangement with Turkey is a big win for Armenia. It would open up trade routes and give Armenia access to ports other than those in Georgia. Increased economic activity would also, finally, provide support to all the economic and social development assistance programs that have been operating in Armenia since independence.

Yerevan will, of course, need to shrug off all the California Armenian patriots who comfortably oppose from their air-conditioned homes any dealings with Americas largest ally in the middle east - and a democratic one at that - unless Turkey agrees to refer to the death and destruction of Armenians and their villages during the waning days of the Ottomon Empire as a genocide. This will never happen and the Turkish proposal to set up a commission to study the period is the next best step.

Let's understand a couple of things. Ottomon policy was to punish independence minded Armenians for joining with the Russian Empire during World War I. This was official policy carried out to the extreme by units in the field resulting in the death of perhaps over 1.5 million ethnic Armenians. For Armenia itself, it is clearly important for Turkey to recognize the atrocities committed by Ottomon officers and soldiers on orders from Constantinople. If Turkey can find a way to do so, and if Armenia ultimately understands that their isolation and geographic position will keep the country poverty-stricken, at war with its neighbors and dependent on Russia, then a compromise will be reached.

In the meantime, the diaspora in their comfortable homes and relatively easy lives should keep to themselves and let those on the front lines resolve their differences.

Wednesday, April 22, 2009

Syria off Line

Our man in Damascus has been cut off along with others. Open society...

Governance, Corruption and Aid

As my time in Ghana is winding down to the last 12 days, I've had some time to think about the effectiveness of aid programs. During the past three months, the usual talk in the aid agencies has been one of "buy in" and "ownership" with very - if any - discussion on governance and corruption.

Governance was the word of the day in the 90s but is strangely absent from the dialogue between donors and central governments these days - much less at the level of local governments. The simple fact is that aid funds are largely wasted with poor local governance and corruption down through every level of government. This fact has been well know and documented for over a decade.

Does Africa need aid? Most certainly, but past successes have been spotty and with the global financial crises it is more important than ever to refocus on governance and anticorruption. Aid should be strongly tied to improvements in these areas - and not just for supeficial improvements akin to smoke and mirrors.

Real connections must also be made at the local level where economic and social improvements can be readily seen which is often not the case when aid agencies routinely only work at the ministerial level.

Finally, some aid programs and projects have clearly been designed by people who have spent very little time in the field. A couple of weeks to get the lay of the land is not enough time to draft an effective program. All projects should have substantial input from those who have been recently in the target country for at least three months. They know it, academics and bureaucrats in Brussels and Washington do not.

Russian War on Georgia

According to the AP Russia armour is now only 25 miles from Tbilisi. Last week 22 ships of the Black Sea Fleet steamed out of Sevastopol with a vanguard of troop landing ships. The stationing of troops outside of their zone as agreed upon with the EU is a dangerous situation and Russia clearly intends to eliminate the indepence of Georgia through military threats, if not an outright invasion.

The EU will protest and do nothing - just as it always has done. The US does not have the flexibility to intervene in any military way, nor should it. However, Russia desperately wants a new relationship with Washington and it should be made clear to Moscow that the "reset" button will indeed be reset if they invade.

Saakashvili must begin to negotiate a way out with the opposition which will likely mean his resignation. This might preclude a Russian invasion. He is ineffective as President of Georgia and provides Russia an excuse for invading. If he refuses to negotiate and expects help from either the EU or the US once Russian tanks start heading for Tbilisi, his sand castle will collapse and not only will Georgia cease to exist except as a province of Moscow, Russia will have full control of the oil pipeline in Georgia so as to maintain and increase its energy stranglehold on Europe.

Once Georgia is removed as an irritant, Russia will turn its attention to Ukraine which has elections coming in October. They have already illegally provided Russian passports to Ukrainian citizens in Crimea and have used that as a pretext before for military action.

It's reality check time. Russia is not an ally but an enemy of democracy and is reverting to its imperial ways.

Tuesday, April 21, 2009

Thought of the morning...

Why is it that people working within development agencies, as opposed to those who actually do the work in the field, want their results and recommendations before they are contractual due?

Saturday, April 18, 2009

Too much going Moldova, Georgia, Armenia and Ukraine

I've been swamped with work in Ghana and events in Europe and Asia are cascading in ever increasing speed. However, I intend to get to it this weekend and we should be posting from Damascus and Baku shortly (reading this guys?).

First, there is Moldova where the recount confirmed the recent vote and victory for the Communist (sic) party by a hair and protests are likely to continue despite the outrage expressed by President Medvedev who really, really hates color revolutions. I find the offer of passports by Romania to 1 million Moldovans an interesting move - one that Russia uses to then follow up with an invasion to protect its "citizens". How far will Russia go with Moldova? Better - how far will Bucharest go?

Second, there is Georgia where protests are also likely to continue but may be bolstered by actual political alternatives to Saakashvili. Who will it be? What will he or she propose vis a vis Russia and NATO? Russia's dispatch of its entire Black Sea fleet this past week - with landing ships preceding the blue water craft and the rapid buildup in Abkhazia is meant as a threat. But to do what? The NATO exercise scheduled for early May has led to some hysterical statements coming out of Moscow. Perhaps the window of opportunity for Russia is closing a bit. Perhaps not. Saakashvili still needs to go but the opposition needs to have a leader and a plan of which there is absolutely no evidence so far.

Turkey and Armenia are shaking hands and Baku is stamping its foot like a spoiled child. Will the end of April see open borders? How will Russia react? How will Turkey handle the upcoming meetings with the EU regarding gas and oil supplies through Turkey? Is that why Putin and Gazprom are off to Bulgaria? Will Turkey risk Russian retaliation if it makes a deal with Armenia and pushes the Russians out?

Ukraine is, well, Ukraine. Will the IMF advance it the funds it needs to stabilize or continue to require unreasonable actions to reduce the budget deficit? They left Kyiv without saying. Will all the old guard need to die off before Ukrainian politicians serve their country more than themselves? Perhaps.

So...plenty to post about and as soon as I am out of the jungle in the Volta region of Ghana, I will.

Tuesday, April 14, 2009

Failed State No. 1

The rescue of Captain Phillips of the Maersk Alabama was both wonderful and an amazing display of marksmanship. Now, however, very good questions are being raised here. They deserve to be addressed, since as is correctly pointed out, the level of violence is likely to escalate.

Beyond these questions, lie even more difficult ones that include policy decisions on how to handle, if at all, the failed state of Somalia. Clearly, foreign assistance to arrest the decline of Somalia is impossible. It is not safe for anyone to be based there for any period of time. But sooner or later, something will need to be done.

Piracy, although a headline grabber, is not the key problem. Although I am sure there are pirates who simply don't care and enjoy their life, how many have been driven to it by the collapse of Somalia as a state. This raises the larger question of true terrorists making Somalia a base of operations because of so many, particularly among the youth, who will be attracted by fundamentalist activities and promises.

So. What must be done?

Failed State yet?

Today, Pakistan's President Zardari signed the Nizam-i-Adl, or System of Justice, Regulation into law following the approval of Parliament. Rarely does a democratically elected chamber approve of such a vile, anti-democratic regulation. But then, Pakistan is a failed state - or about to become one. One with nuclear weapon capability.

This obnoxious religious regulation arose from the cave-in by the provincial government of the North-West Frontier Province and the jihadist movement in the Swat region that calls for a shariah-based legal system to be implemented in the area in exchange for an end to the insurgency. That included laying down arms. Is it surprise that the arms were not surrendered?

So, what are the development agencies going to do now in Pakistan?

Russian Flexibility in Defense of Empire

Russia, through its foreign policy wing, Gazprom, has changed its position on penalties imposed against Ukraine for not purchasing the contractual amount of gas. Now it will impose the penalties according to Kommersant Ukraina (sorry, no link). There is nothing wrong with this based on contractual law - except for the glaring fact Gazprom and Russian Prime Minister Vladimir Putin had said in March that Russia would not demand penalties connected to Ukraine’s import shortages.

The fact that Putin and Russian government are untrustworthy and, basically, liars, is secondary to the use of the oil/gas weapon to recreate the Soviet Union. But Russian proclivity for outright lies should be noted.

Delusional Saakashvili

Saakashvili is now reaping the civil society whirlwind. Perhaps he now regrets all those civil society NGOs set up by USAID. Nevertheless, he must go and the organizers of the protests should understand this is not the Rose, Orange, Chestnut or whatever color one chooses, revolution. They too, had better have a plan beyond the resignation of Saakashvili - unless they actually are intent on the disintigration of Georgia.

Saakashvili, for his part, should begin by being less delusional. His interview with Newsweek, is short of understanding, long on self-pity and is not helpful. On the delusional front, there is this:

Who are your supporters in the U.S. today?
I have quite a few good contacts. Of course, my best friend was John McCain. You can say he is Georgian already. We expect McCain to come and visit us in a week or so. I have good relationships with Hillary Clinton, Joseph Biden and especially Richard Holbrooke—he is my teacher. I learned a lot of great things from him.

and this...

Do you feel that the West is disappointed with you? Have you been in touch with President Obama yet?
Oh, yes, I have talked to him on the phone. The problem is not about us—the problem is about their own internal politics. We have integrated into U.S. internal politics. So during the change of power, there was some sort of vacuum in America. Nobody knew what to do with us. Everybody, including France, was waiting for Obama's guideline on what to do about Georgia. I admire American ideas. I used to idealize America under Bush, when ideas were above pragmatic politics. Now it is a new time, when pragmatic politics are in charge of ideas. That might spoil the America I know.

He cannot really believe that 1) McCain has any power or credibility or leverage or 2) that Georgia has integrated into U.S. internal politics or 3) there was "some sort of vacuum in America" during the transition. France was certainly not waiting for Obama's guidleline on what to do about Georgia. He idealized America under Bush? Is this a joke? Where pragmatic politics are in charge of ideas now? Is that bad - especially in this case?

This man needs to go for the sake of Georgian independence. Now. It is time for the US to engage with the oposition.

Friday, April 10, 2009

Georgia, Moldova, Turkmenistan and Armenia

Except for Turkmenistan, the donor community has poured tens of millions of dollars into Georgia, Moldova and Armenia. For all the money, Moldova remains an economic basket case and Georgia is in entropy mode. Armenia may move away from the downward spiral it has been experiencing since the end of the 1993 war with Azerbaijan - but it won't have anything to do with the development aid it has received over those years. It will be because of changes in the geo-political make-up of the region, the rise of Turkey and a resurgent Russia intent on re-creating the Soviet Union.

Moldova is an interesting case because I recall a heavy emphasis - at the expense of economic and business support - on civil society programs. This was particularly the case with USAID whose local mission was in thrall to civil society. The problem with that is a poor household does not really care about civil society if it has little or no income or food. What is also surprising is for all intents and purposes, the current government won the election by a few points. They call themselves "communist" but in reality they are not. They simply have an un-reformed soviet style system - despite all that foreign aid - which lives up to its previous inefficiency. Moldova's biggest and unrecoverable mistake was seperating from Romania. The second problem is the Transdneister, that sliver of illegal, trafficking, blackmarket and gun-running dirt with its own unrecognized passport and thousands of Russian troops to protect it from Moldova, of which it is a part. The Transdneister problem is what keeps Moldova tied to Russia. No development aid that does not take that into consideration will succeed. Nor will it succeed without strong political will within the Moldovan government to change. That may require a change in the system.

Georgia - well, that's a different case. It is very clear that Saakashvili must go. It may be that his attempt to assert central government control over the break-away regions of Abkhazia and South Ossetia was partly due to his promise to the more nationalistic parties in Georgia to do so and thereby win the last election, but now comes the blow-back. It was never really important for Georgia to regain control of those two regions over which it has had no effective control for a decade. Even if Russia has overreached and concentrated the attention of Turkey and Azerbaijan on its newly imperial ambitions, Georgia is now in danger of disintegration as long as Saakashvili remains. If Georgia loses Batumi, then it loses its oil transit revenues. A graceful way out is needed and the opposition must come up with a plan for moving forward economically, socially and politically and not just have the removal of Saakashvili as its goal.

Turkmenistan has now accused Russia, through Gazprom, of blowing up its gas pipeline on the Uzbek border this week. That may well be true. It will be interesting to see how the gas war develops because Russia is determined to gain almost total control of gas resources either through production or lines. This is the real great game developing in the western areas of Central Asia.


Had a huge problem with my service provider in Ghana which basically resulted in limited or no connectivity for the better part of this week. Things seem to be back on line - sort of - so I can get back to posting.

Monday, April 6, 2009

Time to re-think development aid

One of the purposes of this blog is to try and propose alternatives to the accepted wisdom of development aid implementation. A key problem with development aid is that little of the aid is spent on the target country contractors and suppliers and even if they are not available – always a suspect report from an “implementing partner” – there is little effort to actual developing local entrepreneurial firms. This has been particularly true in Afghanistan, of course, and has been well documented. In that regard, I hope that the Obama administration will alter the way USAID and associated US aid donors (including the Defense Department) design their terms of reference.

Since I believe in finding root causes – not just proximate causes, it may be that the principal mistake may be the manner in which development aid programs are designed and implemented. The assumptions made at the very initial stage of design then embed themselves in the terms of reference and contract. Any modifications are made at the edges.

A root problem is that both the EU and the US award development aid contracts to national firms in the vast majority of cases. Since that is unlikely to change, some effort must be made to encourage the use of local contractors, suppliers and experts. Encouragement does not mean to simply “try your best, fellas”. Contracts should affirmatively provide for levels of funding specifically for local firms. It should not be left to the US or EU contractor to inform the prime donor that such local talent is not there simply because that fact should have been discovered during the planning stage of the project. In that case, provision should be made to develop local human and business resources so that at least some sustainable development would be built into the project.

In my experience, where funding has been structured to actually promote development, it has thankfully only peripherally involved the active involvement of the recipient government whose otherwise primary goal is to make sure its fingerprints are all over the project. Allowing fund disbursement to be controlled by the recipient governments involved is, I believe, a mistake unless there is a clear commitment to actually accomplishing the goals of whatever program is involved tied to iron clad conditionalities.

Another issue that deserves another look is the way of determining indicators for success or progress. In the US, Congress is impressed with statistics – how much was spent, what units (of whatever) were built, created, reduced, changed etc. In one example I experienced, the indicator for a successful land tenure program was an increase in transactions – a largely meaningless number unless taken in context of the economic environment. It is hardly a success in such a case if the only result is a massive sell-off at fire sale prices leading to a sinking economy. Much better to have fewer transactions that result in positive economic activity – including increased values and investments. Overall, it is necessary to take a much broader, long term view and develop indicators of sustainability that do not result in dependence on donors.

Three year or five year contracts to accomplish a wish list of deliverables may not deliver much in reality. Depending on the type of initiative longer contract terms should be considered to allow for change. Some consideration needs to be given to changing economic, social and political environments even before contracts are awarded, making the terms of reference obsolete. To help avoid this prospect, the process for determining feasibility, developing a plan of intervention and deciding on targeted outcomes needs to be significantly accelerated from, in the case of USAID, the usual 145 days.

Contracts should also avoid a “buy” American or EU requirement. Too frequently, this results in more money being spent than would otherwise be the case and, not surprisingly, does nothing to assist the local economy.

In construction and supply contracts every effort should be made to contract locally. If long term construction is required, then components should be added to develop, for example, TVET schools of a permanent nature with a guarantee that whatever construction is being planned, the graduates would have a job.

One final note about NGO support. In many political environments certain NGOs are not welcome and not sustainable. That does not mean they should not receive donor support. Just don't expect any sustainability once the donor goes away. In many situations, civil society NGOs are simply not effective. If the economy is or has been cratering, those trying to raise awareness for civil society initiatives are preaching to the families desperate to put food on the table. They don't care which particular oligarch of the moment runs the local paper.

Finally, the structuring of aid programs should include an investigation of the possibility of calving off a portion of program funding to act as a form of venture capital, providing either outright grants to support existing or develop new businesses within the framework of the program – something that worked in Armenia – or recoverable grants.

Many suggestions have been made in numerous published articles regarding improving the impact of foreign development aid. Hopefully, changes are coming as a result of political pressure and less ideological proclivities of those in charge of targeting that aid.

Friday, April 3, 2009

Nation Building

The US is indulging in nation building in Afghanistan, which never was and never will be a nation. Spending funds to provide schools, roads and livelihoods is fine, and if military protection is needed to support this effort and help make it sustainable, then so be it.

But, the world now has two more governments, Iraq and Afghanistan, whose social and political foundation is based on the denial of human rights to large segments of their populations. The denial of rights, often brutal and deadly, is based on a twisted version of basic human rights that asserts the priority of traditional ways and which cannot be criticized, particularly if those actions are based on religion. Taken to the extreme (or not in the case of Afghanistan)religious beliefs can allow anything, including murder and torture, so long as they are grounded in past practices sanctioned by those in power. To point out that this might somehow be wrong is to be branded as prejudiced.

Sorry. I do not believe that we should respect, tolerate, much less fund, any belief that advocates denial of basic human rights whether in the name of religion, tradition or anything else that smacks of "this is our way". It is merely an excuse for brutal discrimination to maintain or re-establish the status-quo ante.

The US and other nations have been spending billions of development aid in Afghanistan, yet the government has recently enacted a law that forbids women to leave the home without obtaining the permission of their husband. Iraq now has a full fledged fundamentalist regime that has dismembered the rights of women and other religious groups. Is this why the US and the rest of the world are pouring money into these newly minted 12th century regimes? Whatever happened to conditionalities?

I apologize for the rant which was caused by reading this today. The tacit approval implied by failure to tie funds to behavior through conditional funding that subsequently results in the re-deployment of abusive beliefs and actions, is outrageous. In fact, all - all of Central Asia was socially better off under the Soviets because at least they enforced equal treatment of women and men and held these perverted religious ideas in check. Let the Russians take back Central Asia for the sake of civilization.

Thursday, April 2, 2009

Armenia - Turkey Accord

Armenia and Turkey have been talking. There appears to be a chance that Turkey will open its borders. Let's make no mistake - this would open up huge market possibilities to the impoverished, Russian ally in the south Caucuses. Such a move would also play well for Turkey with the EU.

Open borders for Armenia could allow a larger portion of the earmarked US development aid funds to be utilized in implementing a variety of interventions aimed to develop Armenian trade and business ventures.

The benefits of trade across the border with Turkey, avoidance of Georgian customs corruption and the effective targeting of development aid to support private sector growth could bring about significant change in Armenia. The end to isolation would likely have an immediate positive impact on the rampant corruption in the government and public services that exists at every level.

Much depends on the extent of any agreement with Turkey and the resistance to such a move by Azerbaijan.

Hurriyet News reported today that Azeri Foreign Minister Elmar Mamedyarov warned that "If the border is opened before the withdrawal of Armenian troops from the occupied territories of Azerbaijan, it would run counter to Azerbaijan's national interests".

This message was likely meant as much of a warning to Armenia as to Ankara. However, it also may represent an opening if it is not meant to only refer to Ngorno-Kharabakh. An offer by Armenia to withdraw from the other occupied territories could move the peace process forward. This may be the best time to start serious talks.

The other issue is Azerbaijan's position as independent of Russia, which might change if it felt that Turkey was about to abandon Baku. They have already signed a memorandum of understanding with Gazprom (Moscow's real foreign affairs arm) on natural gas transport through Russian pipes at market prices. Finalizing such an agreement would kill the Nabucco project which is intended to avoid Russia and bring natural gas to Europe via Turkey. So much for energy independence.

Finally, sorry Representative Kirk (R.CA). The Armenian Genocide bill will likely not pass now - Turkey, geo-politics, energy and peace are more important - and, what is the color of the sky on your planet? The failure of this bill will not cost the Democrats the House in 2010.

Wednesday, April 1, 2009

Ghana's land reform struggle - losing the battle?

In 1997 I first came to Ghana on a short mission for the World Bank together with two experts in urban planning and title registration respectively, to try and find out where the land reform program had jumped the track. Ghana had been the shining star of West Africa for the Bank, but the failure to rapidly provide secure tenure to ordinary Ghanaians, and especially the poor, via a much vaunted new title registration system was disturbing, to say the least. There are few things more important to economic growth and reduction of poverty than land reform.

We interviewed all the usual suspects: government representatives, bank official (accesss to credit which land ownership provides), urban planners and lawyers. We wrote a report. Apparently, no one listened because when I arrived here at the end of January this year I was presented with virtually the exact set of problems we had identified more than a decade earlier. Incidentally, the land market reform program intitiated by the Bank was known as Urban I. Urban V - or VI (I need to check on this) is the latest iteration.

Ghana has received more than $750 million in aid from the Bank alone in the past 20 years. A significant portion of that was sunk into resolving land tenure issues. The poor have no cash. But they have assets. It's the frozen capital described by Hernando de Soto in "The Mystery of Capital". Give the poor tenure and unfreeze the capital so that the poor can escape the informal sector. That's the theory and I happen to agree. So what has gone wrong in the past twelve years that has in many ways witnessed rather large sums of money have rather minimal effect? Why are slums growing on average of 3.5% a year in Africa? This is an accelerating train wreck and the solutions will only be more painful as time passes without a better approach. To be continued...

US Politics - Only once - I promise

I'm sorry. This is not what this blog is about, but I can't resist. From Talking Points Memo - two items...Rep. Bachmann and her newest campaign to glorify stupid with a constitutional amendment to protect the US Dollar from a non-existent threat and Sen Inhofe who believes because the Great State of Oklahoma bore the brunt of a heavy snowfall recently, global warming is false. To the people who voted for these moth-brains - are you embarrassed yet? What about the 30 co-sponsors to Bachmann's proposed constitutional amendment? On the other hand, it is April 1 - one can hope it's a joke. That's it. Just go read it.